PP 190

11. Think back to studies that we discussed on the changing safety net after welfare reform in the US. How do/did the EITC, TANF, and the AFDC incentivize or disincentivize work? What are some of the consequences of shifting to a work-promoting welfare system? How does the current structure of the safety net support people who cannot work, or who face barriers to full time employment (such as childcare, transportation costs, health, disabilities, addictions)?

means tested iron law of welfare

13. How have racial and class inequalities in educational attainment changed since the 1954 landmark Brown vs Board of Education ruling (be clear on periods of increase, decrease, or stay the same, and discuss key contributing factors)?

-80's: golden era -90's: declared failed experiment -residential segregation (race x class, redlining) -white flight, gerrymandering school districts, "busing", succession

What does the evidence show on the long-run impacts of school spending increases (induced by school finance reforms) on student outcomes? What are the weaknesses of the argument: "School spending increases over the past 20 years have had only small effects on outcomes as reflected by the aggregate time-series correlational evidence that school spending increases appear unrelated to student test scores" (which Hanushek argues)?

-10% increase/pupil for all 12 years: reduce incidence of poverty, increase school completed, boost adult wages -more exposure=more positive -$100/pupil: districts use more effectively (teacher pay, instructional time, reduce classroom size) -Hanushek: not longitudinal miss macro scale changes (family structure, labor market, segregation) -controlling for confounders: school spending is key

Do preschool programs like Head Start improve outcomes for disadvantaged children? In the absence of evidence from a random assignment experiment, what are the difficulties involved in evaluating programs like Head Start?

-YES -dependent on K-12 spending -fade out effects -difficulty evaluating (confounding influences) -identify counterfactual

Describe the principal criticisms of the official definition of poverty? For each, explain whether correcting it would lower or raise the official poverty estimate.

-absolute measure of poverty: not adjusted for cost or standard of living, outdated -income measured before taxes: doesn't include in kind gov benefits

What are the economic arguments for preferring cash transfers rather than in-kind transfers to the poor? What are the economic arguments for in-kind transfers?

-cash: flexibility, feed the economy, discourages work -in kind: controls where funds are spent, costly to administer (leaky bucket), doesn't maximize utility, gov shouldn't be paternalistic

What is the evidence that early education and parent education programs improve outcomes for disadvantaged children?

-cumulative process: ability & motivation to learn, parental investment -brain development sensitive to poverty (fewer vocab words by 18 months, test score gap stabilized by 3rd grade) -non cognitive skills & kindergarten teachers -success of Perry Pre School & Abecedarian (single parenthood, grad rates, college attendance, poverty)

Does school segregation hurt or help blacks? How have levels of school segregation changed since the mid-1970s? Are primary and secondary schools in the United States resegregating?

-detrimental to learning & quality of edu -resegregation after Court orders (white flight, gerrymandering, succession, "neighborhood schools") -more diverse pop but homogeneous schools

Which socio demographic groups (e.g. age groups, race/ethnic groups) have the highest poverty rates? Which are a majority of the poor?

-elderly: lowest poverty rates, targeted programs (SSI, Medicaid, Medicare) -children: highest poverty rates, most vulnerable (lack of targeted programs, intergenerational effects) -race: whites majority but disproportionately minorities (AA and NA) -Single parents: high poverty rates, majority minority

Describe schematically how the earned-income-tax credit affects the budget constraint. Explain how it affects work incentives at different points along the budget line.

-initial increase to budget constraint line -3 phases -phase in: subsidize earnings, incentive to work -plateau: max credit, incentive -phase out: slight disincentive

How is the change in the way that TANF is funded (relative to AFDC) change states' incentives to provide welfare?

-matching grant to block grant -more out of pocket costs & less reimbursement -incentive to spend less -state autonomy: less in cash aid more in programs

Poor people in high-poverty areas are more likely to commit crimes and less likely to graduate high school or work than people with the same income in low-poverty areas. Why?

-neighborhoods matter -underclass theory & new urban poverty -poor segregated neighborhoods w/ weak attachment to labor market -lack anchor/community resources -poor youth removed from mainstream networks (more vulnerable)

For each of the following, describe the broad trends in poverty rates over the last several decades and explain the causes of those trends: overall, elderly, female headed families, blacks, children

-overall: largest decrease since 1960's (War on Poverty, EITC) -elderly: lowest poverty rates (targeted programs) -Female headed: high poverty rates, rise in single parent families (demographics, mass incarceration) -blacks: disproportionately high, doesn't include incarcerated population -children: highest poverty rates of all groups (intergenerational, most vulnerable)

Most poverty spells are short but most of the poor are in long poverty spells. How can we reconcile these two facts? Explain.

-point in time v. longitudinal -misses those who move out & who fluctuate -function also of structure: work first (doesn't help those who cannot find a job: disconnected from labor market & safety net)

What are the major demand factors that may have increased wage inequality over the last thirty years?

-polarization of the labor market (demand for college educated & decline in middle.low skill jobs) -poor job quality -college wage premium lack of unionization (bargaining power) -globalization (offshoring) -automization (skill bias/tech)

Describe the major trends in federal spending on anti-poverty programs over the last thirty-forty years. Which programs have grown and which have declined? How would these changes be expected to affect the official poverty rate? Which programs are most targeted to the poor?

-program growth: means tested programs (EITC, SNAP, Disability) -decline: TANF -impact: lack of substantial cash aid, largest benefits are in kind -Target: poor/most needy via phased in benefits

It is generally accepted that high implicit tax rates in cash transfer programs such as AFDC discourage work. What are the tradeoffs between high implicit tax rates and other aspects of cash transfer programs?

-provide more aid v. expand eligibility -Iron law of welfare (g-tE): work incentives cannot be ambiguously improved by reduction in the take back rate -Leaky Bucket: reduce work hours & earn more (policy not character flaw) -ambiguous tradeoff: lower marginal tax rate (more people eligible) v. increase grant size (target most needy but large disincentives)

5. What are the five factors that are most associated with regional differences in upward mobility (based on findings of Chetty et al)? Choose two and use the knowledge you have gained through this course to explain how these might impact mobility.

-segregation -income inequality -social capital -family structure -school quality

What were the principal elements of PRWORA?

-stated goals 1. provide assistance 2. end dependency 3. prevent/reduce single mother births 4. encourage formation of 2 parent families -changes: converted to block grant (v. open entitlement), time limits, work requirements & sanctions, state autonomy (benefits, eligibility)

What are the advantages and disadvantages of relying on local property taxes to fund public schools K-12 education spending?

advantages -tailor to local communities -local autonomy (states can't dictate) -belief in different values of edu disadvantages -inherently unequal schools -residential segregation (lower quality schools) -regressive (poor communities have to be taxed more proportionally to compete)

What have we learned from the Gautreaux and Moving-to-Opportunity Programs?

place matters: neighborhoods can significantly increase the likelihood of positive outcomes -place based investments can help build a pipeline to economic opportunity (create more stable/high mobility neighborhoods) -Gautreaux: lessen racial segregation via scattered site & assisted housing -MTO: housing vouchers, section 8, no -improved outcomes