Broke
Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth
Hoyt Bleakley & Joseph Ferrie
NBER Working Paper, June 2013
Abstract:
The state of Georgia allocated most of its land to the public through a system of lotteries. These episodes provide unusual opportunities to assess the long-term impact of large shocks to wealth, as winning was uncorrelated with individual characteristics and participation was nearly universal among the eligible population of adult white male Georgians. We use this episode to examine the idea that the lower tail of the wealth distribution reflects in part a wealth-based poverty trap because of limited access to capital. Using wealth measured in the 1850 Census manuscripts, we follow up on a sample of men eligible to win in the 1832 Cherokee Land Lottery. We assess the impact of lottery winning on the distribution of wealth 18 years after the fact. Winners are on average richer (by an amount close to the median of 1850 wealth), but mainly due to a (net) shifting of mass from the middle to the upper tail of the wealth distribution. The lower tail is largely unaffected.
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Gene Brody et al.
Psychological Science, forthcoming
Abstract:
Many African American youth may develop high levels of allostatic load, a measure of physiological wear and tear on the body, by developing psychosocial competence under conditions of high risk related to socioeconomic status (SES). The current study was designed to test this hypothesis, which is based on John Henryism theory. In a representative sample of 489 African American youth living in the rural South, cumulative SES-related risks and teacher-reported competence were assessed at ages 11 to 13; depressive symptoms, externalizing behavior, and allostatic load were assessed at age 19. The data revealed that rural African American preadolescents who evinced high psychosocial competence under conditions of high cumulative SES-related risk displayed low levels of adjustment problems along with high allostatic load at age 19. These results suggest that, for many rural African Americans, resilience may indeed be only "skin deep."
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Christian Albrekt Larsen & Thomas Engel Dejgaard
Journal of European Social Policy, July 2013, Pages 287-299
Abstract:
The article investigates how the poor and welfare recipients are depicted in British, Danish and Swedish newspapers. The study was inspired by American media studies that have documented a negative stereotypic way of portraying the poor and welfare recipients, especially when they are African Americans. The article argues that there is an institutional welfare regime logic behind the way the poor and welfare recipients are depicted in the mass media. It is not only a matter of race. This argument is substantiated by showing that the poor and welfare recipients are (1) also depicted negatively in a liberal welfare regime, the UK, where most of the poor and welfare recipients are perceived to be white, and (2) depicted positively in two social-democratic welfare regimes, Sweden and Denmark, where the poor and welfare recipients have increasingly come to be perceived as non-white, especially in Denmark. The empirical analyses are based on a sample of 1750 British, 1750 Danish and 1750 Swedish newspapers covering the period from 2004 to 2009.
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Gregory Price
Review of Black Political Economy, June 2013, Pages 121-143
Abstract:
Hurricane Katrina induced hundreds of thousands of New Orleans citizens to evacuate and relocate to different neighborhoods. Some of these evacuees moved to neighborhoods with poverty rates lower than the one they left in New Orleans. With survey data on a small sample of black Katrina evacuees who registered for absentee voter ballots, this paper explores whether or not there were improvements in the welfare of black evacuees - neighborhood effects - as a result of moving to neighborhoods with a lower poverty rate. With data from a small sample of relocated Katrina evacuees, we provide matching estimates of the short-run treatment effect of different types of changes in neighborhood poverty on five different measures of individual welfare. Treatment parameter estimates reveal - conditional upon the change in origin to destination neighborhood poverty rate - positive neighborhood effects mostly for black evacuees who did not move from high poverty to low poverty neighborhoods, but could have. Our results suggest that at least in the short-run, antipoverty policies based on housing mobility and changing the poverty characteristics of neighborhoods are not necessarily effective in improving the welfare of poor black households.
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Achieving Escape Velocity: Neighborhood and School Interventions to Reduce Persistent Inequality
Roland Fryer & Lawrence Katz
American Economic Review, May 2013, Pages 232-237
Abstract:
This paper reviews the evidence on the efficacy of neighborhood and school interventions in improving the long-run outcomes of children growing up in poor families. We focus on studies exploiting exogenous sources of variation in neighborhoods and schools and which examine at least medium-term outcomes. Higher-quality neighborhoods improve family safety, adult subjective well-being and health, and girls' mental health. But they have no detectable impact on youth human capital, labor market outcomes, or risky behaviors. In contrast, higher-quality schools can improve children's academic achievement and can have longer-term positive impacts of increasing educational attainment and earnings and reducing incarceration and teen pregnancy.
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Liliana Lengua et al.
Infant and Child Development, forthcoming
Abstract:
The effects of low income on children's adjustment might be accounted for by disruptions to hypothalamic-pituitary-adrenal (HPA)-axis activity and to the development of effortful control. Using longitudinal data and a community sample of preschool-age children (N = 306, 36-39 months) and their mothers, recruited to over-represent low-income families, we explored the associations among diurnal cortisol levels and effortful control, and we tested a model in which diurnal cortisol and effortful control account for the effects of family income on child adjustment. Continuous indicators of morning cortisol level and diurnal slope, as well as dichotomous indicators reflecting low morning levels and flat diurnal slope, were examined as predictors of rank-order changes in two dimensions of effortful control, executive control and delay ability. Low income was related to a flat diurnal cortisol slope, and above the effects of family income, a flat diurnal cortisol slope predicted lower social competence. Low morning cortisol level predicted smaller gains in executive control and higher total adjustment problems. Further, delay ability predicted lower adjustment problems above the effects of income and diurnal cortisol levels. The results suggest that HPA-axis dysregulation and effortful control contribute additively to children's adjustment.
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A Dynamic Model of Welfare Reform
Marc Chan
Econometrica, May 2013, Pages 941-1001
Abstract:
A dynamic structural model of labor supply, welfare participation, and food stamp participation is estimated using the 1992, 1993, and 1996 panels of the Survey of Income and Program Participation. Details of various policies including welfare time limits, work requirements, and Earned Income Tax Credit (EITC) are incorporated formally in the budget constraint. Policy simulations reveal that the economy accounts for half of the increase in the labor supply of female heads of family between 1992 and 1999. A time limit results in a larger efficiency gain than a work requirement or a direct reduction in welfare benefits. A reform package can lead to both a reduction in the government expenditure and an improvement in utility. The EITC expansion results in a substantial efficiency gain among individuals with the lowest expected wage. These individuals are almost unaffected by the economic expansion, but their income and utility increase significantly under the reform package.
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Matthew Desmond et al.
Social Forces, forthcoming
Abstract:
This study identifies children as a risk factor for eviction. An analysis of aggregate data shows that neighborhoods with a high percentage of children experience increased evictions. An analysis of individual data based on an original survey shows that among tenants who appear in eviction court, those with children are significantly more likely to receive an eviction judgment. These findings indicate that policymakers interested in monitoring and reducing discrimination should focus not only on the front end of the housing process - the freedom to obtain housing anywhere - but also on the back end: the freedom to maintain housing anywhere.
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Welfare Programs That Target Workforce Participation May Negatively Affect Mortality
Peter Muennig, Zohn Rosen & Elizabeth Ty Wilde
Health Affairs, June 2013, Pages 1072-1077
Abstract:
During the 1990s reforms to the US welfare system introduced new time limits on people's eligibility to receive public assistance. These limits were developed to encourage welfare recipients to seek employment. Little is known about how such social policy programs may have affected participants' health. We explored whether the Florida Family Transition Program randomized trial, a welfare reform experiment, led to long-term changes in mortality among participants. The Florida program included a 24-36-month time limit for welfare participation, intensive job training, and placement assistance. We linked 3,224 participants from the experiment to 17-18 years of prospective mortality follow-up data and found that participants in the program experienced a 16 percent higher mortality rate than recipients of traditional welfare. If our results are generalizable to national welfare reform efforts, they raise questions about whether the cost savings associated with welfare reform justify the additional loss of life.
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Celene Domitrovich et al.
Early Childhood Research Quarterly, forthcoming
Abstract:
Research on the effects of preschool dosage on children's early academic functioning has been limited despite the substantial policy implications of such work. The present study adds to a growing literature on this topic by examining how the number of years enrolled in an enhanced preschool program impacts the school readiness of primarily low-income children at kindergarten. Multi-level modeling was used to account for nesting of children within classrooms. To control for potential selection bias since children were not randomly assigned to receive one or two years of preschool, propensity score one-to-one matching was used to create the two participant groups. Receiving a second year of preschool led to significant improvements in children's early literacy and numeracy skills. Implications of these results for preschool interventions are discussed.
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Stefanie DeLuca, Philip Garboden & Peter Rosenblatt
ANNALS of the American Academy of Political and Social Science, May 2013, Pages 268-299
Abstract:
Individuals participating in the HUD Housing Choice Voucher program, formerly Section 8, can rent units in the private market and are not tied to public housing projects in a specific neighborhood. We would expect vouchers to help poor families leave the ghetto and move to more diverse communities with higher socioeconomic opportunity, but many voucher holders remain concentrated in poor, segregated communities. We use longitudinal qualitative data from one hundred low-income African American families in Mobile, Alabama, to explore this phenomenon, finding that tenants' limited housing search resources, involuntary mobility, landlord practices, and several aspects of the voucher program itself limit families' ability to escape disadvantaged areas. We also find that the voucher program's regulations and funding structures do not incentivize housing authorities to promote neighborhood mobility and residential choice. This combination of forces often keeps voucher recipients in neighborhoods with high concentrations of poor and minority residents.
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Tania Barham, Karen Macours & John Maluccio
American Economic Review, May 2013, Pages 467-471
Abstract:
It is often assumed that early life circumstances, in particular before age two, are important for later human capital development. Using experimental variation in the timing of benefits from a conditional cash transfer program, we test the hypothesis that intervention starting in utero and continuing in the first two years is critical. At age ten, boys exposed to the program during this period had better cognitive, but not anthropometric, outcomes than those exposed in their second year of life or later. The lack of a differential effect on anthropometrics was due catch-up growth.
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Washing Away the Sins of Debt: The Nineteenth-Century Eradication of the Debtors' Prison
Gustav Peebles
Comparative Studies in Society and History, July 2013, Pages 701-724
Abstract:
This article seeks to come to terms with the extraordinarily swift demise of the debtors' prison in multiple countries during the nineteenth century. While focusing primarily on the reform debate in England, I argue that the debtors' prison quickly came to be seen as a barbaric aberration within the expanding commercial life of the nineteenth century. By turning to a copious pamphletic literature from the era of its demise, I show how pamphleteers and eye-witnesses described the debtors' prison in the idiom of ritual; it was seen as a dangerous sanctuary that radically inverted all capitalistic economic practices and moral values of the world outside its walls. Reformers claimed that, inside these shrines of debt, citizens were ritually guided and transformed from active members of society into "knaves" or "idlers," or both. As such, the debtors' prison needed to be eradicated. To do so, reformers mobilized at least three critical discourses, all of which sought to mark the debtors' prison as a zone of barbarism that threatened the civility of the state and its citizenry. By focusing on the debtors' prison as a powerful and transformative ritual zone, the article provides a counterintuitive history of this institution that was so crucial to the regulation of credit and debt relations for centuries. In so doing, the article contributes to a broader literature on the spatiality of debt.
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The poverty-assistance paradox
Béla Janky & Dániel Varga
Economics Letters, September 2013, Pages 447-449
Abstract:
We present a model of preferences on welfare transfers, which incorporates the recipient's wealth as a signal of needs and deservingness. We show that a paradox may arise: the poorer the recipient is, the less transfer he will get. Implications might include the negative impact of targeting assistance to the poorest on public support for welfare.
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The Importance of Race and Religion in Social Service Providers
Becky Hsu, Conrad Hackett & Leslie Hinkson
Social Science Quarterly, forthcoming
Objectives: The objectives of this study are to investigate the traits that clients find important in professional social service providers, comparing confidence in client management skills (friendliness, experience, and knowledge) to desire for demographic characteristics (being of the same race and religion).
Methods: To accomplish this task, we use multiple regression to analyze results of the Lehigh Valley Trust Survey of low-income recipients of social services.
Results: While most respondents find the professional traits important, there is significant variation in whether respondents consider demographic characteristics to be important. We find that having a provider of the same race is very important for African Americans and Hispanics, while having a provider with similar religious beliefs is extremely important for evangelical Protestants. Other predictive variables for homophilous preferences in race and religion are age, mobility, and education.
Conclusions: Professional skills corresponding to organizational position are important to most people, but specific demographic groups prioritize racial, ethnic, and religious homophily. While we suggest some possible explanations (perceived or actual discrimination and cultural concordance), further research is needed to determine the causes.
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Lorien Rice & Cynthia Bansak
Contemporary Economic Policy, forthcoming
Abstract:
This paper investigates how asset tests for welfare eligibility affect auto ownership, employment, and welfare participation for single mothers without a college degree. We combine longitudinal data from the 1996 Survey of Income and Program Participation with data on state-level welfare program rules from the Urban Institute and data on state-level controls to test whether these single mothers were more likely to (1) own a car, (2) be employed, and (3) be off of welfare, depending on the welfare asset rules instituted in their state. We find evidence that, taken as a group, the asset rules have a statistically significant effect on the probability of car ownership. Ordinary least squares results and cross-sectional two-stage least squares (2SLS) results using the asset rules to instrument for car ownership show a large, positive, statistically significant effect of car ownership on employment. However, in 2SLS models controlling for prior car ownership and prior employment, the asset instruments are weaker and we do not find an effect of car ownership on employment. Of significance for policy makers, we find that the asset rules do not have a statistically significant joint effect on welfare participation, even after addressing possible endogeneity.
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Do Lottery Payments Induce Savings Behavior: Evidence from the Lab
Emel Filiz-Ozbay et al.
NBER Working Paper, June 2013
Abstract:
This paper presents the results of a laboratory experiment designed to investigate whether the option of a Prize Linked Savings (PLS) product alters the likelihood that subjects choose to delay payment. By comparing PLS and standard savings products in a controlled way, we find strong evidence that a PLS payment option leads to greater rates of payment deferral than does a straightforward interest payment option of the same expected value. The appeal of the PLS option is strongest among men, self-reported lottery players, and subjects with low bank account balances. We use the results of our experiment to structurally estimate the parameters of the decision problem governing time preference, risk aversion, and probability weighting. We employ the parameter estimates in a series of policy simulations that compare the relative effectiveness of PLS products as compared to standard savings products.
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Racial and Ethnic Trends in the Suburbanization of Poverty in U.S. Metropolitan Areas, 1980-2010
Aaron Howell & Jeffrey Timberlake
Journal of Urban Affairs, forthcoming
Abstract:
This research examines recent trends in the suburbanization of poor non-Latino Whites, Blacks, and Asians, and Latinos of all races in the United States. The authors find strong associations between a temporally lagged measure of suburban housing supply and poverty suburbanization during the period 2006-2010 for all groups, but these associations are largely attenuated by similarly lagged controls for suburban affordable housing and employment, as well as for other characteristics of metropolitan areas. Findings indicate that poor non-Latino Whites and Asians have higher suburbanization rates in metropolitan areas with higher levels of suburban employment, while the suburbanization of the Black and Latino poor is more strongly related to the availability of affordable suburban housing. Increases in housing supply are associated with change in poverty suburbanization over time for Whites, Blacks, and Latinos. In addition, increases in affordable rental housing are associated with increases in the suburbanization of the Latino poor.
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Effects of impoverished environmental conditions on working memory performance
Pascale Engel de Abreu et al.
Memory, forthcoming
Abstract:
This cross-cultural study investigates the impact of background experience on four verbal and visuo-spatial working memory (WM) tasks. A total of 84 children from low-income families were recruited from the following groups: (1) Portuguese immigrant children from Luxembourg impoverished in terms of language experience; (2) Brazilian children deprived in terms of scholastic background; (3) Portuguese children from Portugal with no disadvantage in either scholastic or language background. Children were matched on age, gender, fluid intelligence, and socioeconomic status and completed four simple and complex span tasks of WM and a vocabulary measure. Results indicate that, despite large differences in their backgrounds and language abilities, the groups exhibited comparable performance on the visuo-spatial tasks dot matrix and odd-one-out and on the verbal simple span task digit recall. Group differences emerged on the verbal complex span task counting recall with children from Luxembourg and Portugal outperforming children from disadvantaged schools in Brazil. The study suggests that whereas contributions of prior knowledge to digit span, dot matrix, and odd-one-out are likely to be minimal, background experience can affect performance on counting recall. Implications for testing WM capacity in children growing up in poverty are discussed.