Understanding the Effects of Workfare Policies on Child Human Capital
Journal of Labor Economics, forthcoming
Workfare can impact child development by inducing parents to spend less time at home. I study the mechanisms by which workfare policies affect children using the New Hope workfare experiment. The program randomly assigned individuals to a policy bundle including income and child care subsidies conditional on full-time work. For families with young children, the program had positive effects on child academic performance and classroom behavior. Counterfactual experiments from a dynamic-discrete choice model indicate that most of the effect of New Hope on young children is explained because parents enrolled their children in center-based child care.
Minimum Wage Increases and Eviction Risk
Sumit Agarwal, Brent Ambrose & Moussa Diop
Journal of Urban Economics, forthcoming
We extend the debate on the benefits to increasing the minimum wage by examining the impact on expenses associated with shelter, a previously unexplored area. Our analysis uses a unique data set that tracks household rental payments. Increases in state minimum wages significantly reduce the incidence of renters defaulting on their lease contracts by 1.7 percentage points over three months, relative to similar renters who did not experience an increase in the minimum wage. This represents 10.6% fewer monthly defaults. However, this effect slowly decreases over time as landlords react to wage increases by increasing rents.
Peter Leeson, August Hardy & Paola Suarez
Economic Journal, forthcoming
The central implication of maximising behaviour amid competition is that rates of return tend toward equality. We test that implication in a market whose participants have the traits that behavioural economics suggests should make it hardest to find evidence of maximisation: the market for panhandling at Metrorail stations in Washington, DC. We find that stations with more panhandling opportunities attract more panhandlers and that cross-station differences in hourly panhandling receipts are statistically indistinguishable from zero. Panhandling rates of return thus tend toward equality. Extreme 'behavioural' traits do not prevent maximisation in this market.
Nonprofits in Good Times and Bad Times
Christine Exley, Nils Lehr & Stephen Terry
NBER Working Paper, January 2022
Need fluctuates over the business cycle. We conduct a survey revealing a desire for nonprofit activities to countercyclically expand during downturns. We then demonstrate, using comprehensive US nonprofit data drawn from millions of tax returns, that the public's hopes are disappointed. Nonprofit expenditure, revenue, and balance sheets fluctuate procyclically: contracting during national and local downturns. This finding is evident even for a narrow group of nonprofits the public most wishes would expand during downturns, e.g., those providing critical needs like food or housing. Our new facts contribute to the charitable giving, nonprofit, and business cycle literatures.
Neighborhood structural disadvantage and biological aging in a sample of Black middle age and young adults
Man-Kit Lei et al.
Social Science & Medicine, January 2022
Our analyses of a Black American sample included 448 young adults and 493 middle-aged adults. We measured neighborhood disadvantage using the Area Deprivation Index at the census block group level. DNAm-based accelerated aging indices were measured using established procedures. Regressions with clustered standard errors were used for the analysis.
Neighborhood disadvantage was independently associated with acceleration in PhenoAge, GrimAge, and DunedinPoAm, among young and middle-aged adults. Further, there was no evidence that gender conditioned the effects of neighborhood disadvantage on the aging indices.
A guaranteed immediate payout reduces impatience of financially constrained individuals
Kimberley van der Heijden et al.
Proceedings of the National Academy of Sciences, 18 January 2022
A large stream of literature found that individuals who experience financial strain are particularly concerned about their present needs - that is, they are more likely to choose smaller immediate payoffs over larger future payoffs. In contrast, some recent findings suggest that financially constrained individuals may be more concerned about future needs instead (e.g., they are relatively more likely to invest in long-lived durables than in short-lived experiences). We propose that the use of traditional intertemporal choice tasks has made prior studies overly sensitive to the myopia-inducing effects of financial constraint. These tasks typically offer a choice between receiving a smaller payoff in the present versus a larger payoff in the future. Across three studies, we observe that, as long as some immediate payout is guaranteed, financially constrained individuals are as likely as nonconstrained individuals to accept a delay for a larger payoff. These findings qualify prior demonstrations of the myopic effects of financial constraint and suggest that the traditionally used choice paradigm might not accurately capture time preferences, particularly for financially constrained individuals. Furthermore, they provide possible interventions for those interested in reducing the myopia of financially constrained individuals who are facing all now versus all later decisions.
State TANF Time Limit and Work Sanction Stringencies and Long-Term Trajectories of Welfare Use, Labor Supply, and Income
Julia Shu-Huah Wang
Journal of Family and Economic Issues, December 2021, Pages 650-696
While the 1996 welfare reform increased employment and reduced the participation of the Temporary Assistance for Needy Families (TANF) program immediately after its inception, little is known about the extent to which the reform and stringencies of time limit and work sanction policy features have impacted individuals in the long term. This study used the Survey of Income and Program Participation 1996, 2001, and 2004 panels (1996-2007) and a difference-in-difference-in-difference design to follow low-skilled single mothers' trajectories of welfare use, labor supply, and income for 10 years after the welfare reform and compare how these trajectories differ by stringencies of state work sanction and time limit policies. The findings indicate that welfare reform had sustained impacts on reducing welfare use (TANF and the Supplemental Nutrition Assistance Program [SNAP] program) and increasing employment. Stringent work sanction and time limit policies were associated with lower TANF participation rates in the long term, but only short time limit policies were associated with reduced SNAP participation. Neither stringent policy feature increased employment nor income. The differential effects by race were also examined and discussed.
But It Came from a Food Pantry: Product Stigma and Quality Perceptions of Food Pantry Offerings
Christopher Barrett, Annette Byrne & Teresa Whitaker
Cornell Working Paper, September 2021
Among the millions of Americans who suffer from food insecurity in the United States, only a fraction utilizes the nation's 60,000 food pantries. Stigma is commonly cited as a barrier to use. Stigma can arise from any of several sources. However, some may be due to the perceived product quality of pantry offerings. This study tests this hypothesis using data from an online survey that asks SNAP-eligible individuals to evaluate food items under different treatments. In two treatments, they are told the food is from a grocery store. In two other treatments, they are told the food is from a food pantry. In half the treatments, they are provided with a photo of the food item, indicating a popular brand. Respondents exhibit a negative perception of food from a pantry, but that perception is offset when shown an informative depiction of that food. The effect of branding is explored in a second online experiment and found to be an important component of consumer perception. Results suggest that food banks and food pantries may be able to combat product stigma through marketing that uses photos, brand names, or both to depict the quality of the products they offer.