In the poorhouse
Fredrik Andersson et al.
NBER Working Paper, October 2016
Abstract:
To date, research on the long-term effects of childhood participation in voucher-assisted and public housing has been limited by the lack of data and suitable identification strategies. We create a national-level longitudinal data set that enables us to analyze how children's housing experiences affect adult earnings and incarceration rates. While naive estimates suggest there are substantial negative consequences to childhood participation in voucher-assisted and public housing, this result appears to be driven largely by selection of households into housing assistance programs. To mitigate this source of bias, we employ household fixed-effects specifications that use only within-household (across-sibling) variation for identification. Compared to naive specifications, household fixed-effects estimates for earnings are universally more positive, and they suggest that there are positive and statistically significant benefits from childhood residence in assisted housing on young adult earnings for nearly all demographic groups. Childhood participation in assisted housing also reduces the likelihood of incarceration across all household race/ethnicity groups. Time spent in voucher-assisted or public housing is especially beneficial for females from non-Hispanic Black households, who experience substantial increases in expected earnings and lower incarceration rates.
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The Long-Term Effects of Cash Assistance
David Price & Jae Song
Stanford Working Paper, October 2016
Abstract:
We investigate the long-term effect of cash assistance for beneficiaries and their children by following up, after four decades, with participants in the Seattle-Denver Income Maintenance Experiment. Treated families in this randomized experiment received thousands of dollars per year in extra government benefits for three or five years in the 1970s. Using administrative data from the Social Security Administration and the Washington State Department of Health, we find that treatment caused adults to earn an average of $1,800 less per year after the experiment ended. Most of this effect on earned income is concentrated between ages 50 and 60, suggesting that it is related to retirement. Treated adults were also 6.3 percentage points more likely to apply for disability benefits, but were not significantly more likely to receive them, or to have died. These effects on parents, however, do not appear to be passed down to their children: children in treated families experienced no significant effects in any of the main variables studied. These results for children are estimated precisely enough to rule out effects found in other contexts and inform the literature on intergenerational mobility. Taken as a whole, these results suggest that policymakers should consider the long-term effects of cash assistance as they formulate policies to combat poverty.
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The Good Intention Gap: Poverty, Anxiety, and Implications for Political Action
Elaine Denny
University of California Working Paper, September 2016
Abstract:
At least 2 in 5 U.S. citizens live in high financial insecurity, leaving them vulnerable to economic shocks and stress. This paper identifies a mechanism linking poverty to turnout, showing that financial stress influences political behavior by influencing cognition and decision-making. I provide foundational evidence for a Good Intention Gap in political participation: Poor people want to take political action, but, consistent with the broader psychological effects of stress, financial anxiety taxes the brain's cognitive resources. Taxed mental bandwidth and short-sighted decision-making reduce one's capacity to follow through on intentions to participate. I show that experimentally-induced financial anxiety decreases long-term strategic thinking in ways that are increasingly at odds with policy preferences. When political action is easy and immediate, financial anxiety increases participation due to increased issue salience; however, when action is delayed, financial anxiety mediates decreased turnout, especially among the poor. Nationally representative data show that financial stress correlates with the Good Intention Gap via a mechanism of forgetting, while competing explanations for lower participation among the poor find little support.
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Explaining Public Support for Counterproductive Homelessness Policy: The Role of Disgust
Scott Clifford & Spencer Piston
Political Behavior, forthcoming
Abstract:
Federal, state, and city governments spend substantial funds on programs intended to aid homeless people, and such programs attract widespread public support. In recent years, however, state and local governments have increasingly enacted policies, such as bans on panhandling and sleeping in public, that are counterproductive to alleviating homelessness. Yet these policies also garner substantial support from the public. Given that programs aiding the homeless are so popular, why are these counterproductive policies also popular? We argue that disgust plays a key role in the resolution of this puzzle. While disgust does not decrease support for aid policies or even generate negative affect towards homeless people, it motivates the desire for physical distance, leading to support for policies that exclude homeless people from public life. We test this argument using survey data, including a national sample with an embedded experiment. Consistent with these expectations, our findings indicate that those respondents who are dispositionally sensitive to disgust are more likely to support exclusionary policies, such as banning panhandling, but no less likely to support policies intended to aid homeless people. Furthermore, media depictions of the homeless that include disease cues activate disgust, increasing its impact on support for banning panhandling. These results help explain the popularity of exclusionary homelessness policies and challenge common perspectives on the role of group attitudes in public life.
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Trends in Cumulative Marginal Tax Rates Facing Low-Income Families, 1997-2007
Gizem Kosar & Robert Moffitt
NBER Working Paper, October 2016
Abstract:
We present new calculations of cumulative marginal tax rates (MTRs) facing low income families participating in multiple welfare programs over the period 1997-2007, the period after 1996 welfare reform but before the program expansions of the Great Recession. Our calculations are for nondisabled, nonelderly families who pay federal and state income taxes and the payroll tax but receive benefits from up to four different transfer programs - Medicaid, Food Stamps, subsidized housing, and Temporary Assistance for Needy Families. The results show enormous variation in MTRs across families who participate in different combinations of welfare programs, who have different family structures, and who have earnings in different ranges. For families who participate in either no or fewer than two welfare programs, which constitutes the large majority of low income families, MTRs are either negative or positive but modest in magnitude. But families participating in two or more programs, while still facing negative or modest positive rates at low earnings, usually face considerably higher MTRs at higher earnings ranges, often up to 80 percent and even occasionally over 100 percent. While the fraction of families in this category is not large, they constitute about one-fifth of single parent families.
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The Timing of Welfare Payments and Intimate Partner Violence
Lin-Chi Hsu
Economic Inquiry, forthcoming
Abstract:
I examine transfer schedules for the Temporary Assistance for Needy Families (TANF) program and find a causal relationship between the time directly after welfare payments and intimate partner violence against women. This study supports the hypothesis that the husband uses threats of violence as an instrument to gain control over the allocation of household resources, and suggests that the increased incidence in physical violence after welfare payments is associated with alcohol use. Additionally, I find that states that pay TANF recipients twice a month do not have this effect on threats of violence. This suggests that smaller, more frequent payments may reduce the husband's incentive to use verbal violence as a bargaining tool.
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Gentrification and Residential Mobility in Philadelphia
Lei Ding, Jackelyn Hwang & Eileen Divringi
Regional Science and Urban Economics, November 2016, Pages 38-51
Abstract:
Gentrification has provoked considerable controversy surrounding its effects on residential displacement. Using a unique individual-level, longitudinal data set, this study examines mobility rates and residential destinations of residents in gentrifying neighborhoods during the recent housing boom and bust in Philadelphia for various strata of residents and different types of gentrification. We find that vulnerable residents, those with low credit scores and without mortgages, are generally no more likely to move from gentrifying neighborhoods compared with their counterparts in nongentrifying neighborhoods. When they do move, however, they are more likely to move to lower-income neighborhoods. Residents in gentrifying neighborhoods at the aggregate level have slightly higher mobility rates, but these rates are largely driven by more advantaged residents. These findings shed new light on the heterogeneity in mobility patterns across residents in gentrifying neighborhoods and suggest that researchers should focus more attention on the quality of residential moves and nonmoves for less advantaged residents, rather than mobility rates alone.
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Does Homeownership Prolong the Duration of Unemployment?
Ahmet Ali Taşkın & Fırat Yaman
Real Estate Economics, forthcoming
Abstract:
We examine the effects of homeownership on individuals' unemployment durations. An unemployment spell can terminate with a job or with nonparticipation. The endogeneity of homeownership is addressed by estimating a full maximum likelihood function jointly modeling the competing hazards and the probability of being a homeowner. Unobserved factors contributing to the probability of being a homeowner are allowed to be correlated with unobservable heterogeneity in the hazard rates. Not controlling for ownership selection, there is neither a significant difference in the job-finding hazard nor in the nonparticipation hazard of unemployed owners and renters. If we jointly model the ownership selection, we find that unemployed homeowners are more likely to find a job than renters.
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Jeehoon Han
Southern Economic Journal, October 2016, Pages 464-486
Abstract:
This article examines whether expanding Supplemental Nutrition Assistance Program (SNAP) eligibility reduces material hardships of low-income households. During the Great Recession, many states expanded the income threshold of eligibility for SNAP. I show that expansions in eligibility increased the SNAP participation rate by 3-5 percentage points. I also find that the expansion leads to a modest decrease in nonfood hardships, such as rent and utility delinquencies. However, the increase in SNAP enrollment does not lead to greater food spending or a reduction in food insecurity except for households with children.
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Linda Witek Janusek et al.
Brain, Behavior, and Immunity, forthcoming
Abstract:
African American men (AAM) who are exposed to trauma and adversity during their early life are at greater risk for poor health over their lifespan. Exposure to adversity during critical developmental windows may embed an epigenetic signature that alters expression of genes that regulate stress response systems, including those genes that regulate the inflammatory response to stress. Such an epigenetic signature may increase risk for diseases exacerbated by inflammation, and may contribute to health disparity. The purpose of this study was to evaluate the extent to which exposure to early life adversity influences the psychological, cortisol, and proinflammatory response to acute stress (Trier Social Stress Test - TSST) in emerging adult AAM, ages 18-25 years (N= 34). Hierarchical linear modeling was used to examine the cortisol and IL-6 pattern of response to the TSST with respect to childhood adversity factors and DNA methylation of the IL-6 promoter. Findings revealed that in response to the TSST, greater levels of childhood trauma and indirect exposure to neighborhood violence were associated with a greater TSST-induced IL-6 response, and a blunted cortisol response. Reduced methylation of the IL6 promoter was related to increased exposure to childhood trauma and greater TSST-induced IL-6 levels. These results support the concept that exposure to childhood adversity amplifies the adult proinflammatory response to stress, which is related to epigenetic signature.
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William Johnston
Social Science Research, forthcoming
Abstract:
An emerging approach to studying associations between neighborhood contexts and educational outcomes is to estimate the outcomes of adolescents growing up in neighborhoods that are experiencing economic growth in comparison to peers that reside in economically stable or declining communities. Using data from the National Longitudinal Study of Adolescent Health (Add Health), I examine the association between education attainment and changes in socioeconomic advantage in urban neighborhoods between 1990 and 2000. I find that residing in a neighborhood that experiences economic improvements has a positive association with educational attainment for urban adolescents. Furthermore, race-based analyses suggest consistently positive associations for all race subgroups, lending support to protective models of neighborhood effects that argue high neighborhood SES supports positive outcomes for adolescents residing in these contexts.
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Elena Castellari et al.
Health Economics, forthcoming
Abstract:
In this paper, we examine the relationship between the timing of food stamp receipt and purchasing patterns. We combine data on state distribution dates of food stamps with scanner data on a panel of households purchases tracked between 2004 and 2011. We find that purchases of a variety of goods are meaningfully higher on receipt days, consistent with previous work that suggests that recipients are very impatient. Additionally, and importantly, estimates indicate that when food stamp receipt days fall on weekends, total monthly purchases within the same households are affected. In particular, monthly purchases of beer are higher when food stamps are distributed on a weekend rather than in months where benefits are distributed on weekdays. For these households, total beer purchases are between 4 and 5% higher in those months. Among households ineligible for food stamps, no effect is identified. These results demonstrate that the 'day-of-the-week' of SNAP treatment may have important impacts on household purchase habits.