Presence and Persistence of Poverty in U.S. Tax Data
Jeff Larrimore, Jacob Mortenson & David Splinter
NBER Working Paper, April 2020
This paper presents new estimates of the level and persistence of poverty among U.S. households since the Great Recession. We build annual household data files using U.S. income tax filings between 2007 and 2018. These data allow us to track individuals over time and measure how tax policies affect poverty trends. Using an after-tax household income measure, we estimate that while roughly 1 in 10 people are in poverty in any given year, over 4 in 10 people spent at least one year in poverty between 2007 and 2018. This implies substantial mobility in and out of poverty — for example, 41 percent of those in poverty in 2007 were out of poverty in the following year. Others spend multiple years in poverty or escape poverty only to fall back into it. Of those in poverty in 2007, one-third were in poverty for at least half of the years through 2018.
Quantifying the impact of Aid to Dependent Children: An epidemiological framework
Explorations in Economic History, forthcoming
This paper shows that conditional cash transfers under Aid to Dependent Children (ADC), a main program of the 1935 Social Security Act, reduced infant, children and adult mortality. I take advantage of the transition from mothers’ pensions to ADC and the large differences in ADC payments and eligibility across 104 cities, 2,260 counties, and 49 states to estimate the impacts of cash transfers on mortality rates, by age, sex, race, and cause between 1929 and 1944. I find that ADC's expansion reduced infant and adult mortality by between 10 and 20 percent. This finding, based on an event-study design, is robust to a range of specifications, difference-and-differences, an instrumental variable strategy, a range of fixed effects, placebo tests and a border-pair policy discontinuity design. The largest mortality reductions came from drops in communicable and infectious diseases, such as influenza, pneumonia and tuberculosis.
Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms
Matthew Ridley et al.
NBER Working Paper, May 2020
Why are people living in poverty disproportionately affected by mental illness? We review the interdisciplinary evidence of the bi-directional causal relationship between poverty and common mental illnesses — depression and anxiety — and the underlying mechanisms. Research shows that mental illness reduces employment and therefore income and that psychological interventions generate economic gains. Similarly, negative economic shocks cause mental illness, and anti-poverty programs such as cash transfers improve mental health. A crucial next step toward the design of effective policies is to better understand the mechanisms underlying these causal effects.
Evidence for skin-deep resilience using a co-twin control design: Effects on low-grade inflammation in a longitudinal study of youth
Edith Chen et al.
Brain, Behavior, and Immunity, forthcoming
This study tested the skin-deep resilience hypothesis – that low socioeconomic status (SES) youth who are working hard to succeed in life experience good psychological and educational outcomes but at a cost to their physical health – in a sample of monozygotic (MZ) twins. The National Longitudinal Study of Adolescent Health (Add Health) contained a sample of 226 MZ twin pairs at Wave 1 (M age = 16 years), of whom 141 pairs completed the Wave 4 assessment 13 years later (M age = 29 years). Family SES was measured at Wave 1 via income, education, and occupation. Conscientiousness was measured at Wave 4 as an indicator of those who were working hard to succeed in life. Outcomes measured at Wave 4 included low-grade inflammation (C-reactive protein, CRP), mental health (depression, problematic alcohol use), and academic success (educational attainment). A co-twin control design was utilized which directly compared within-twin differences in the association between conscientiousness and life outcomes. Main effects of between-twin conscientiousness were found such that higher levels of conscientiousness were associated with higher educational attainment, fewer symptoms of depression, and less problematic alcohol use, across all SES groups. An interaction between family SES and within-twin difference in conscientiousness was found for CRP, such that, among twins growing up in lower SES households, the twin with higher levels of conscientiousness had higher levels of CRP. These patterns provide support for the phenomenon of skin-deep resilience using a twin methodology that reduces the possibility of confounding by shared genetic and environmental factors.
Childhood adversity is linked to adult health among African Americans via adolescent weight gain and effects are genetically moderated
Steven Beach et al.
Development and Psychopathology, forthcoming
Identifying the mechanisms linking early experiences, genetic risk factors, and their interaction with later health consequences is central to the development of preventive interventions and identifying potential boundary conditions for their efficacy. In the current investigation of 412 African American adolescents followed across a 20-year period, we examined change in body mass index (BMI) across adolescence as one possible mechanism linking childhood adversity and adult health. We found associations of childhood adversity with objective indicators of young adult health, including a cardiometabolic risk index, a methylomic aging index, and a count of chronic health conditions. Childhood adversities were associated with objective indicators indirectly through their association with gains in BMI across adolescence and early adulthood. We also found evidence of an association of genetic risk with weight gain across adolescence and young adult health, as well as genetic moderation of childhood adversity's effect on gains in BMI, resulting in moderated mediation. These patterns indicated that genetic risk moderated the indirect pathways from childhood adversity to young adult health outcomes and childhood adversity moderated the indirect pathways from genetic risk to young adult health outcomes through effects on weight gain during adolescence and early adulthood.
Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes
Tatyana Deryugina & Benjamin Marx
NBER Working Paper, May 2020
Do new societal needs increase charitable giving or simply reallocate a fixed supply of donations? We study this question using IRS datasets and the natural experiment of deadly tornadoes. Among ZIP Codes located more than 20 miles away from a tornado's path, donations by households increase by over $1 million per tornado fatality. We find no negative effects on charities located in these ZIP Codes, with a bootstrapped confidence interval that rejects substitution rates above 16 percent. The results imply that giving to one cause need not come at the expense of another.
Pathways Between Minimum Wages and Health: The Roles of Health Insurance, Health Care Access and Health Care Utilization
Eastern Economic Journal, June 2020, Pages 438–459
This study contributes to recent work on the relationship between minimum wages and health by examining potential underlying mechanisms. Specifically, the roles of health insurance, health care access and utilization are explored. By analyzing Current Population Survey data for the years 1989–2009 and by estimating DD models, I find that higher minimum wages increase health insurance coverage, in particular individually purchased insurance, among low-educated individuals. By estimating data from the Behavioral Risk Factor Surveillance System for the same period, I furthermore provide evidence for improvements in health care access/affordability and increased health care utilization following minimum wage increases.
Reducing Poverty among Children: Evidence from State Policy Simulations
Jessica Pac et al.
Children and Youth Services Review, forthcoming
State approaches to reducing child poverty vary considerably. We exploit this state-level variation to estimate what could be achieved in terms of child poverty if all states adopted the most generous or inclusive states’ policies. Specifically, we simulate the child poverty reductions that would occur if every state were as generous or inclusive as the most generous or inclusive state in four key policies: Supplemental Nutrition Assistance Program (SNAP), state Earned Income Tax Credits (EITC), Temporary Assistance for Needy Families (TANF), and state Child Tax Credits (CTC). We find that adopting the most generous or inclusive state EITC policy would have the largest impact on child poverty, reducing it by 1.2 percentage points, followed by SNAP, TANF, and lastly state CTC. If all states were as generous or inclusive as the most generous or inclusive state in all four policies, the child poverty rate would decrease by 2.5 percentage points, and five and a half million children would be lifted out of poverty.
Supplemental Nutrition Assistance Program and School Readiness Skills
Stephanie Hong & Julia Henly
Children and Youth Services Review, forthcoming
This analysis examines the relationship between participating in Supplemental Nutrition Assistance Program (SNAP) and school readiness skills, specifically in early reading, early math, and approaches to learning skills, among low-income children in their preschool to kindergarten-entry years. We also investigate whether this relationship differs depending on depth of household poverty. By using wave 3 and kindergarten-entry wave from the Early Childhood Longitudinal Study Birth Cohort (ECLS-B) data and the child fixed-effects approach as its main empirical strategy, we find strong evidence that SNAP is positively related to children's early math skills (0.22 standard deviation increase) and that this relationship is stronger for children who were in deep poverty and/or poverty prior to their receipt of SNAP. For early reading skills, although we find no significant main effect, the relationship between SNAP and early reading is stronger for children who lived in deep poverty before their SNAP receipt, compared to children who were not as poor. We also find suggestive evidence that SNAP is related to approaches to learning skills (0.3 standard deviation increase), though marginally significant, and that the relationship is much stronger among children who were in deep poverty than those who were not. Through these results, we provide strong support for the role of SNAP, especially for the most economically disadvantaged families, in advancing key school readiness skills that are important to children’s developmental outcomes.
Housing Search Frictions: Evidence from Detailed Search Data and a Field Experiment
Peter Bergman, Eric Chan & Adam Kapor
NBER Working Paper, May 2020
We randomized school quality information onto the listings of a nationwide housing website for low-income families. We use this variation and data on families' search and location choices to estimate a model of housing search and neighborhood choice that incorporates imperfect information and potentially biased beliefs. We find that imperfect information and biased beliefs cause families to live in neighborhoods with lower-performing, more segregated schools. Families underestimate school quality conditional on neighborhood characteristics. If we had ignored this information problem, we would have estimated that families value school quality relative to their commute downtown by half that of the truth.
Moving to Opportunity, or Aging in Place? The Changing Profile of HUD-Subsidized Households
Vincent Reina & Claudia Aiken
University Pennsylvania Working Paper, February 2020
The demographics of households receiving rental assistance has changed over time, yet much of the policy and political dialogue has not. Understanding the changing profile of subsidized households is important when evaluating the role of rental subsidies in alleviating cost burdens, determining outcomes associated with mobility-focused versus place-based housing assistance, and applying concepts of neighborhood opportunity to both. This paper analyzes how the composition of subsidized households has changed over time and across subsidy programs, and how this relates to concepts of neighborhood opportunity. We find that since 2000, the share of subsidized renters who were seniors grew, while the share with children dropped. In particular, households using vouchers used to be young relative to the general population and households in other rental assistance programs but have aged rapidly. We also find that current definitions of “neighborhood opportunity” are not well equipped to accommodate these changes and propose alternative metrics.