Down and out
Minimum wages, poverty, and material hardship: New evidence from the SIPP
Joseph Sabia & Robert Nielsen
Review of Economics of the Household, March 2015, Pages 95-134
Abstract:
While a number of policymakers have argued that raising the minimum wage will reduce material hardship, empirical evidence to support or refute this claim is scant. Using data drawn from the Survey of Income and Program Participation, we examine the effect of minimum wage increases on poverty, material hardship, and government program participation. Difference-in-difference estimates provide little evidence that state and federal minimum wage increases between 1996 and 2007 reduced poverty, material hardship, or receipt of public program benefits among all individuals, workers, younger individuals without high school degrees, or younger black individuals. Our findings are robust across several measures of hardship, including poverty, financial hardship, housing stress, food insecurity, durable goods deprivation, and health insecurity. We find some evidence of modest redistribution effects of the minimum wage among low-skilled individuals.
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Nina Boberg-Fazlic & Paul Sharp
Economic Journal, forthcoming
Abstract:
This paper examines the relationship between government spending and charitable activity. We present a novel way of testing the ‘crowding out hypothesis’, making use of the fact that welfare provision under the Old Poor Laws was decided on the parish level, thus giving heterogeneity within a single country. Using data on poor relief spending combined with data on charitable incomes by county before and after 1800, we find a positive relationship: areas with more public provision also enjoyed higher levels of charitable income. These results are confirmed when instrumenting for Poor Law spending, and when looking at first differences.
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Patrick Kline & Melissa Tartari
NBER Working Paper, January 2015
Abstract:
We study the short-term impact of Connecticut's Jobs First welfare reform experiment on women’s labor supply and program participation decisions. A non-parametric optimizing model is shown to restrict the set of counterfactual choices compatible with each woman's actual choice. These revealed preference restrictions yield informative bounds on the frequency of several intensive and extensive margin responses to the experiment. We find that welfare reform induced many women to work but led some others to reduce their earnings in order to receive assistance. The bounds on this latter “opt-in” effect imply that intensive margin labor supply responses are non-trivial.
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Housing Instability and Birth Weight among Young Urban Mothers
Bianca Carrion et al.
Journal of Urban Health, February 2015, Pages 1-9
Abstract:
Housing instability is an understudied social condition that may be a severe stressor during pregnancy. Aims of this study are to identify correlates of housing instability and to explore the association between housing instability and birth weight among pregnant teens and young mothers. Participants included pregnant women ages 14–21 from seven community hospitals and health centers in New York City (N = 623). Data were collected via structured surveys during the second trimester of pregnancy (14 to 24 weeks gestation, M = 19.35, SD = 3.20). Birth weight was obtained through labor and delivery logs. Housing instability was operationalized as two or more moves within the past year. More than one in four (28.5 %) pregnant teens and young women in this sample reported housing instability. Women who reported housing instability were less likely to be enrolled in school, have parents as main source of financial support, live in a single-family home or apartment, or be food secure; they were more likely to smoke (all p < 0.05). After adjusting for important clinical, behavioral, and demographic factors typically associated with lower birth weight, housing instability remained a significant predictor of lower birth weight (B (SE) = −83.96(35.47), p = 0.018). Results highlight the importance of housing stability during pregnancy for infant health. Future interventions and policies should ensure that women are housing stable before, during, and after pregnancy.
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Health Effects of Unemployment Benefit Program Generosity
Jonathan Cylus, Maria Glymour & Mauricio Avendano
American Journal of Public Health, February 2015, Pages 317-323
Objectives: We assessed the impact of unemployment benefit programs on the health of the unemployed.
Methods: We linked US state law data on maximum allowable unemployment benefit levels between 1985 and 2008 to individual self-rated health for heads of households in the Panel Study of Income Dynamics and implemented state and year fixed-effect models.
Results: Unemployment was associated with increased risk of reporting poor health among men in both linear probability (b = 0.0794; 95% confidence interval [CI] = 0.0623, 0.0965) and logistic models (odds ratio = 2.777; 95% CI = 2.294, 3.362), but this effect is lower when the generosity of state unemployment benefits is high (b for interaction between unemployment and benefits = −0.124; 95% CI = −0.197, −0.0523). A 63% increase in benefits completely offsets the impact of unemployment on self-reported health.
Conclusions: Results suggest that unemployment benefits may significantly alleviate the adverse health effects of unemployment among men.
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More Money, Fewer Lives: The Cost Effectiveness of Welfare Reform in the United States
Peter Muennig et al.
American Journal of Public Health, February 2015, Pages 324-328
Objectives: We evaluated the economic benefits of Temporary Assistance to Needy Families (TANF) relative to the previous program, Aid to Families with Dependent Children (AFDC).
Methods: We used pooled mortality hazard ratios from 2 randomized controlled trials — Connecticut Jobs First and the Florida Transition Program, which had follow-up from the early and mid-1990s through December 2011 — and previous estimates of health and economic benefits of TANF and AFDC. We entered them into a Markov model to evaluate TANF’s economic benefits relative to AFDC and weigh them against the potential health threats of TANF.
Results: Over the working life of the average cash assistance recipient, AFDC would cost approximately $28 000 more than TANF from the societal perspective. However, it would also bring 0.44 additional years of life. The incremental cost effectiveness of AFDC would be approximately $64 000 per life-year saved relative to TANF.
Conclusions: AFDC may provide more value as a health investment than TANF. Additional attention given to the neediest US families denied cash assistance could improve the value of TANF.
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Manasi Deshpande
MIT Working Paper, November 2014
Abstract:
I estimate the effect of removing children with disabilities from the Supplemental Security Income (SSI) program on parental earnings and household income. Using administrative data from the Social Security Administration, I implement both a regression discontinuity design and a difference-in-differences design based on changes in the budget for medical reviews, which increase the likelihood of removal from SSI. I find that a loss of $1,000 in the child’s SSI payment increases parental earnings — exclusively on the intensive margin — by $700-$1,400, indicating that parents fully offset the SSI loss with increased earnings. The loss of the child’s SSI payment also discourages parents and siblings from applying for disability insurance. In addition, I find evidence that family members often apply for disability insurance at the same time, which suggests the importance of household-level shocks in the decision to apply. Using the unique institutional context of the SSI program, I provide suggestive evidence that the large response in parental earnings is driven mostly by an income effect rather than a substitution effect.
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Manasi Deshpande
MIT Working Paper, December 2014
Abstract:
I estimate the long-term effects of removing low-income youth with disabilities from Supplemental Security Income (SSI) on the level and variance of their earnings and income in adulthood. Using administrative data from the Social Security Administration, I implement a regression discontinuity design based on a change in the probability of SSI removal at age 18 created by the welfare reform law of 1996. I find that SSI youth who are removed earn on average $4,000 per year, an increase of just $2,600 relative to those who remain on SSI. This increase in earnings covers only one-third of the $7,700 they lose in annual SSI income, and they lose an additional 10% each year in other transfer income. As a result, removed SSI youth experience a present discounted income loss of $73,000, or 80% of the original SSI income loss, over the 16 years following removal. In addition to the large drop in income levels, the within-person variance of income quadruples as a result of the SSI loss. Based on back-of-the-envelope calculations assuming risk aversion and limited intertemporal consumption smoothing, I find that up to one-quarter of the recipient's welfare loss from SSI removal is attributable to the increase in income volatility rather than to the fall in income levels. This result suggests that ignoring the income stabilization effects of welfare and disability programs could substantially underestimate their value to recipients.
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Hungry today, unhappy tomorrow? Childhood hunger and subjective wellbeing later in life
Marco Bertoni
Journal of Health Economics, March 2015, Pages 40–53
Abstract:
I use anchoring vignettes to show that, on data for eleven European countries, exposure to episodes of hunger in childhood leads people to adopt lower subjective standards to evaluate satisfaction with life in adulthood. I also show that, as a consequence, estimates of the association between childhood starvation and late-life wellbeing that do not allow for reporting heterogeneity are biased towards finding a positive correlation. These results highlight the need to consider rescaling when drawing inference on subjective outcomes.
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George Galster et al.
Journal of Economic Geography, forthcoming
Abstract:
We quantify how young adult employment and educational outcomes for low-income African Americans and Latinos relate to their adolescent neighborhood conditions. Data come from surveys of Denver Housing Authority (DHA) households who lived in public housing scattered throughout Denver County. Because DHA allocations mimic random assignment to neighborhood, this program represents a natural experiment for overcoming geographic selection bias. We use the neighborhood originally offered by DHA to instrument for neighborhood experienced during adolescence. Our control function logistic analyses found that higher percentages of foreign-born neighbors predicted higher odds of no post-secondary education and (less reliably) neither working nor attending school. Neighborhood occupational prestige predicted lower odds of young adults receiving public assistance and (less reliably) neither primarily working nor attending school. Effects differed for African Americans and Latinos. We consider potential causal processes underlying our results and suggest why they differ from those from the Moving To Opportunity demonstration.
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Eviction's Fallout: Housing, Hardship, and Health
Matthew Desmond & Rachel Tolbert Kimbro
Social Forces, forthcoming
Abstract:
Millions of families across the United States are evicted each year. Yet, we know next to nothing about the impact eviction has on their lives. Focusing on low-income urban mothers, a population at high risk of eviction, this study is among the first to examine rigorously the consequences of involuntary displacement from housing. Applying two methods of propensity score analyses to data from a national survey, we find that eviction has negative effects on mothers in multiple domains. Compared to matched mothers who were not evicted, mothers who were evicted in the previous year experienced more material hardship, were more likely to suffer from depression, reported worse health for themselves and their children, and reported more parenting stress. Some evidence suggests that at least two years after their eviction, mothers still experienced significantly higher rates of material hardship and depression than peers.
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Gerard van den Berg, Pia Pinger & Johannes Schoch
Economic Journal, forthcoming
Abstract:
We estimate average causal effects of early-life hunger on late-life health by applying instrumental variable estimation, using data with self-reported periods of hunger earlier in life, with famines as instruments. The data contain samples from European countries and include birth cohorts exposed to various famines in the 20th century. We use two-sample IV estimation to deal with imperfect recollection of conditions at very early stages of life. The estimated average causal effects may exceed famine effects by at least a factor three.
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Nathanael Okpych
Children and Youth Services Review, April 2015, Pages 74–86
Abstract:
Fifteen years has passed since the Chafee Foster Care Independence Program was created under the Social Security Act, which marked an increased role of the U.S. federal government in supporting foster care youth to independence. It was not until the National Youth in Transition Database (NYTD) was launched in 2010 that all 50 states reported standard data on receipt of the 13 types of Chafee independent living services. This paper, which draws on the first two years of NYTD data, analyzes Chafee service receipt across the U.S. among youth in foster care (ages 16–21). About half of the 131,204 youth included in this analysis received at least one type of Chafee service, and considerable variation existed in the proportion of youth that received each of the 13 specific types of services. Females were more likely than males to receive all but one type of service, and African Americans were less likely to receive most of the services. An interaction effect indicated that Black youth were significantly less likely to receive services in large urban areas than other racial/ethnic groups. Young people with disabilities or medical/psychological conditions were generally more likely to receive services than youth without disabilities. Youth in large urban regions receive fewer services than youth residing in other areas, and substantial variation exists between states in proportions of service recipients. Recommendations are made for targeting services, future data collection, and research, including suggestions on ways to improve measurement of Chafee services.