Income Distribution Commons^™

Childhood Income Volatility And Adult Outcomes, Bradley Hardy

University of Kentucky Center for Poverty Research Discussion Paper Series

Using data linked across generations in the Panel Study of Income Dynamics, I estimate the relationship between exposure to volatile income during childhood and a set of socioeconomic outcomes in adulthood. The empirical framework is an augmented intergenerational income mobility model that includes controls for income volatility. I measure income volatility at the family level in two ways. First, instability as measured by squared deviations around a family-specific mean, and then as percent changes of 25 percent or more. Volatility enters the model both separately and interacted with income level. I find that family income instability during childhood has a …

Decomposing Trends In Income Volatility: The ‘Wild Ride’ At The Top And Bottom, Bradley Hardy, James P. Ziliak

University of Kentucky Center for Poverty Research Discussion Paper Series

We provide a detailed accounting of the trend increase in family income volatility in recent decades by quantifying the contributions of household head earnings, spouse earnings, non-transfer non-labor income, transfer income, and tax payments (inclusive of the refundable Earned Income Tax Credit), along with covariances among the income components. Using twoyear matched panels in the Current Population Survey from 1980 to 2009, we find that the volatility of family income, as measured by the variance of the arc percent change, doubled over the past three decades. The increase in volatility was most pronounced among the top 1% of the income …

Child Food Security And The Food Stamp Program: What A Difference A Month Makes, Yiran Li, Bradford Mills, George Davis, Elton Mykerezi

University of Kentucky Center for Poverty Research Discussion Paper Series

Most Americans believe that children should not have either persistent concerns about the quality and quantity of food to eat or lack of actual access to food due to low household resources. However, in 2007, approximately 3.3 million households (8.3 percent of households with children) had food insecure children who did not have consistent access to adequate and safe foods (Nord and Golla, 2009). This implies less than complete coverage of children by the food-assistance safety net.

The United States’s Supplemental Nutrition Assistance Program (SNAP), historically and commonly known as the Food Stamp Program (FSP), is a federal-assistance program designed …

Low Income Preschoolers' Non-Parental Care Experiences And Household Food Insecurity, Colleen Heflin, Irma Arteaga, Sara Gable

University of Kentucky Center for Poverty Research Discussion Paper Series

Rates of food insecurity in households with children have significantly increased over the past decade. The majority of children, including those at risk for food insecurity, participate in some form of non-parental child care during the preschool years. To evaluate the relationship between the two phenomenon, this study investigates the effects of child care arrangements on food insecurity in households with children. To address the selection bias problem that arises from the fact that enrollment in different types of child care is not a random process, this study uses propensity scores techniques. The authors compare outcomes across five child care …

Families With Hungry Children And The Transition From Preschool To Kindergarten, Colleen Heflin, Irma Arteaga, Sara Gable

University of Kentucky Center for Poverty Research Discussion Paper Series

This paper exploits a source of variation in the eligibility for federal nutrition programs to identify the program effects on food insecurity. Children are eligible for the WIC program until the day before they turn 61 months old. The result is an age discontinuity in program participation at the 61-month cutoff. Using the Early Childhood Longitudinal Study Birth-cohort dataset, we find strong evidence of a sizeable increase in household food insecurity at the 61- month cutoff. Our findings are robust to different model specifications, datasets, and various bandwidth choices using various non-parametric estimations.

On Persistent Poverty In A Rich Country, T.M. Tonmoy Islam, Jenny Minier, James P. Ziliak

University of Kentucky Center for Poverty Research Discussion Paper Series

We examine differences in income within the U.S., and the regions of persistent poverty that have arisen, using a newly assembled dataset of counties that links historical 19th century Census data with contemporaneous data. The data, along with an augmented human capital growth model, permit us to identify the roles of contemporaneous differences in aggregate production technologies and factor endowments, in conjunction with the historical roles of institutions, culture, geography, and human capital. We allow for possible cross-county factor mobility via a correlated random effects GMM estimator that identifies simultaneously the coefficients on time varying and time-invariant determinants of income. …

The Importance Of Region And State Welfare Rules For Disconnected Single Mothers, Andrea Hetling

University of Kentucky Center for Poverty Research Discussion Paper Series

The proportion of low-income, single mothers not receiving public assistance or participating in the formal employment sector has approximately doubled over the past decade. Many of the currently debated policy options to support these families focus on state level programs. However, little is known about the relationships between state welfare program characteristics and disconnectedness. This project assesses the effect of state welfare rules on the likelihood of being disconnected from these two income sources. Using data from the Survey of Income and Program Participation and the Urban Institute‟s Welfare Rules Database, the current research compares the circumstances of these at-risk …

Recent Developments In Antipoverty Policies In The United States, James P. Ziliak

University of Kentucky Center for Poverty Research Discussion Paper Series

I survey recent developments in antipoverty policy in the United States over the past decade and examine how the safety net and tax system affects poverty and its correlates using data from the 2000 to 2010 waves of the Current Population Survey-Annual Social and Economic Supplement. Unlike the 1980s and 1990s, and until the health care overhaul in 2009, the first decade of the 21st Century was relatively tepid in terms of major transfer policy reforms. However, real spending on most major social program increased significantly, and in some cases doubled or tripled, in response to demographic shifts and the …

Earnings Volatility In America: Evidence From Matched Cps, James P. Ziliak, Bradley Hardy, Christopher Bollinger

University of Kentucky Center for Poverty Research Discussion Paper Series

We offer new evidence on earnings volatility of men and women in the United States over the past four decades by using matched data from the March Current Population Survey. We construct a measure of total volatility that encompasses both permanent and transitory instability, and that admits employment transitions and losses from self employment. We also present a detailed decomposition of earnings volatility to account for changing shares in employment probabilities, conditional variances of continuous workers, and conditional mean variances from labor-force entry and exit. Our results show that earnings volatility among men increased by 15 percent from the early …

A Tale Of Two Cities? The Heterogeneous Impact Of Medicaid Managed Care In Kentucky, James Marton, Aaron Yelowitz, Jeffery C. Talbert

University of Kentucky Center for Poverty Research Discussion Paper Series

Does managed care produce lower health care utilization and costs through better aligned financial incentives and alternative delivery methods (the “pure” HMO effect) or by attracting more healthy enrollees (enrollee selection)? The purpose of this paper is to shed new light on this fundamental question using a quasi-experimental approach that exploits the timing and county specific implementation of Medicaid managed care plans in two distinct sub-sets of Kentucky counties in the late 1990s. We find large differences in the relative success of each region in reducing utilization that are likely driven by important differences in plan design. Asthmatic children enrolled …

If You Don’T Build It... Mexican Mobility Following The U.S. Housing Bust, Brian C. Cadena, Brian K. Kovak

University of Kentucky Center for Poverty Research Discussion Paper Series

This paper demonstrates the importance of earnings-sensitive migration in response to local variation in labor demand. We use geographic variation in the depth of the housing bust to examine its effects on the migration of natives and Mexican-born individuals in the U.S. We find a strong effect of the housing bust on the location choices of Mexicans, with movement of Mexican population away from U.S. states facing the largest declines in construction and movement toward U.S. states facing smaller declines. This effect operated primarily through interstate migration of Mexicans previously residing in the U.S. and, to a lesser extent, through …

The Appalachian Regional Development Act And Economic Change, James P. Ziliak

University of Kentucky Center for Poverty Research Discussion Paper Series

The Appalachian Regional Development Act of 1965 is one of the longest serving place-based regional development programs in the U.S., and is the largest in terms of geographic scope. I use county-level data from the 1960 thru 2000 Decennial Censuses to evaluate the effect of ARDA on poverty rates and real per capita incomes in Appalachia. The intent to treat parameter is identified in a difference-in-difference-in-difference framework by comparing outcomes in Appalachia to her border counties. Additional knowledge of which counties were solely eligible for highway development funds under ARDA from those counties eligible for both highway as well as …

Does Race Based Redistricting Matter For Policy?, Ebonya Washington

University of Kentucky Center for Poverty Research Discussion Paper Series

During the 1990 congressional redistricting many states were mandated to create additional majority minority-resident districts in order to elect more minorities to Congress. Civil rights groups and Republicans cheered. The Party views Democratic districts stripped of Black voters as opportunities to repaint blue districts red. The academic literature agrees, attributing the Republican return to House control in 1994 to race based redistricting. However, this literature generally focuses on the district as the unit of analysis, a focus that is too narrow, as some districts gain Black residents while others lose them. I focus on states, the level at which redistricting …

Poverty, Inequality And Cost Of Living Differences, Enrico Moretti

University of Kentucky Center for Poverty Research Discussion Paper Series

Metropolitan areas in the US are characterized by enormous differences in average income, earnings, and factor productivity. The income of individuals located in metropolitan areas at the top of the income distribution is more than double the income of observationally similar individuals located in metropolitan areas at the bottom of the distribution. These differences reflect, at least in part, variation in local productivity.

The Impact Of U.S. Family Planning Programs On Fertility And Mortality: Evidence From The War On Poverty And Title X, Martha Bailey

University of Kentucky Center for Poverty Research Discussion Paper Series

Over forty years ago, the U.S. government adopted a policy of funding domestic family planning services, and the effects of these programs have been debated ever since. Within an event-study framework, I exploit community-level variation in the timing of federal grants for family planning services under the Economic Opportunity Act (1965 to 1974) and Title X (1970 to 1980) to evaluate their impact. The results provide robust evidence that federal family planning grants reduced birth rates in funded communities by four percent within six years. I find no evidence that family planning grants reduced maternal or infant mortality rates.

Notes On Poverty Traps And Appalachia, Steven Durlauf

University of Kentucky Center for Poverty Research Discussion Paper Series

In these notes, I provide some general ideas on how to conceptualize poverty traps and speculate on their applicability to understanding Appalachian poverty. My goal is to stimulate thinking on Appalachia that exploits contemporary perspectives in economics on the sources of persistent poverty and inequality. To do this, I focus on both the theory of poverty traps as well as issues in the econometric assessment of their empirical salience.

Assessing The Impact Of A Modernized Application Process On Florida’S Food Stamp Caseload, Colleen Heflin, Peter Mueser

University of Kentucky Center for Poverty Research Discussion Paper Series

In 2005, Florida implemented an internet-based service delivery system for eligibility determination in public assistance programs, including the Food Stamp, Temporary Assistance for Needy Families (TANF), and the Medicaid programs. At the same time, Florida switched from a caseworker model to a technology-driven model and decreased staffing levels of employees involved in social service delivery. We conduct an evaluative case study of the effects of these policy changes on the Food Stamp caseload. In particular, we consider the impact on applications and the flows onto and off of the program. To answer these questions, we use administrative data from the …

State Employment Protection Statutes For Victims Of Domestic Violence As An Employment Matter, Jennifer E. Swanberg, Mamta U. Ojha

University of Kentucky Center for Poverty Research Discussion Paper Series

Evidence indicates that domestic violence has negative consequences on victims’ employment; yet employers lag in recognizing this as a workplace issue. To address the problem, some states have established several policy solutions. To understand the scope of the public sector’s response to domestic violence as a workplace issue, a content analysis of state-level employment protection policies for domestic violence victims (N=369) was conducted. Results indicate three broad policy categories: 1) policies that offer work leave for victims; 2) policies that aim to reduce employment discrimination of domestic violence victims; and 3) policies that aim to increase awareness and safety in …

What About These Children? Assessing Poverty Among The ‘Hidden Population’ Of Multiracial Children In Single-Mother Families, Jenifer Bratter, Sarah Damaske

University of Kentucky Center for Poverty Research Discussion Paper Series

Capturing the conditions of children of color living in single-parent families has become more complex due to the growing presence of interracial households. This analysis assesses the size and poverty status of single-female headed families housing multiracial children. Using data from the 2000 Census, we find that 9 percent of female-headed families house either children who are classified with more than one race or are classified as a single race different than their mother’s compared to only 3 percent of married couple families. Logistic regression analyses assessing the odds of poverty status for families finds that being a multiracial family …

Household Living Arrangements And Economic Resources Among Mexican Immigrant Families With Children, Mark A. Leach

University of Kentucky Center for Poverty Research Discussion Paper Series

Using data from the 2000 Census, this study examines the relationship between household living arrangements and economic resources among Mexican immigrant families with children. I model separately the relationships between family income and household structure and proportion of total household income contributed and household structure. The results show that families that coreside with extended kin and non-kin have higher incomes, all else equal, relative to those that reside in single-family households. In addition, Mexican immigrant families that reside in extendedhousehold living arrangements contribute about three quarters of total household income. While families may gain some economic efficiency through extended household …

An Exploratory Analysis Of The Relationship Between Student Earnings And Postsecondary Retention, Christopher Jepsen, Darshak P. Patel, Kenneth R. Troske

University of Kentucky Center for Poverty Research Discussion Paper Series

Policy makers are becoming increasingly concerned about the high percentage of students who attend postsecondary education without completing a degree. Researchers have studied numerous potential determinants of retention behavior for postsecondary students, such as financial aid, socioeconomic status, academic preparedness, academic and social integration, and expected future wages. However, none of these studies considers students’ earnings while in school as a potential determinant of retention. Using an administrative data from postsecondary institutions matched with administrative earnings data from the state’s unemployment insurance department, our results indicate that student earnings are negatively correlated to student retention in Kentucky postsecondary institutions. Our …

Family Change And Poverty In Appalachia, Daniel Lichter, Lisa Cimbulak

University of Kentucky Center for Poverty Research Discussion Paper Series

The current economic and political climate provides a vivid contrast with the circumstances of the 1990s, when the passage of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) ushered in welfare reform during a period of unprecedented economic expansion and job growth (Blank 2002; Ziliak 2009). This legislation sought to “end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage.” Among PRWORA’s goals were to reduce out-of-wedlock births and encourage the formation of two-parent families. For most states, much of the initial emphasis on self-sufficiency was placed on “work first” programs (i.e., …

Earnings And Income Volatility In America: Evidence From Matched Cps, James P. Ziliak, Bradley L. Hardy, Christopher Bollinger

University of Kentucky Center for Poverty Research Discussion Paper Series

In this paper we offer new evidence on earnings and income volatility in the United States over the past four decades by using matched data from the March Current Population Survey. We find that between 1973 and 2008 family income volatility rose by 38 percent, primarily as a result of higher volatility of husbands earnings and non means-tested nonlabor income. Rising family income volatility is in evidence across race, education, and family structure, and after declining sharply while young, it is increasing in the latter part of the life cycle among the skilled. The Federal tax and transfer system dampens …

Imprisonment And (Inequality In) Population Health, Christopher Wildeman

University of Kentucky Center for Poverty Research Discussion Paper Series

This article extends research on the consequences of mass imprisonment and the factors shaping population health and health inequities by considering the effects of the imprisonment rate on population health and black-white inequality in population health using state-level panel data from the United States (1980-2004). My results imply that increases in the imprisonment rate harm population health, though the effects on the infant mortality rate and female life expectancy are more consistent than are the effects on male life expectancy. My results also imply that these health effects are concentrated among blacks, implicating mass imprisonment in the persistence of black-white …

Objective And Subjective Residential Context And Urban Children’S Weight Status And Physical And Sedentary Activities, Rachel Tolbert Kimbro, Jeanne Brooks-Gunn, Sara Mclanahan

University of Kentucky Center for Poverty Research Discussion Paper Series

This paper fills this gap by addressing two research questions: first, we ask, are the activity patterns (outdoor play and television watching) of five-year-old children living in large cities associated with children’s weight status? Second, we ask, is residential context, and neighborhood safety in particular, associated with children’s activity patterns? Consistent with past research, we find that outdoor play is negatively associated with weight status, while television watching is positively associated with weight status. We also find, unexpectedly, that the poorest children are playing outdoors the most and watching the most television. Finally, we find that three measures of residential …

Race Disparities In Birth Outcomes In The U.S. South And The Rest Of The Nation, Lenna Nepomnyaschy

University of Kentucky Center for Poverty Research Discussion Paper Series

There are well-documented and as yet unexplained disparities in birth outcomes by race in the United States, even after controlling for socioeconomic status. This paper examines the sources of disparities in low birth weight between blacks and whites in the U.S., by focusing on differences in disparities between two very distinct geographic areas, the Deep South and the rest of the country. Two findings from prior research drive the analyses: First, health overall is worse in the Deep South states; Second, race disparities are smaller in the Deep South than in the rest of the nation. A number of potential …

Externalities In The Classroom: How Children Exposed To Domestic Violence Affect Everyone’S Kids, Scott E. Carrell, Mark L. Hoekstra

University of Kentucky Center for Poverty Research Discussion Paper Series

There is widespread perception that externalities from troubled children are significant, though measuring them is difficult due to data and methodological limitations. We estimate the negative spillovers caused by children from troubled families by exploiting a unique data set in which children’s school records are matched to domestic violence cases. We find that children from troubled families significantly decrease their peers’ reading and math test scores and increase misbehavior in the classroom. The achievement spillovers are robust to within-family differences and when controlling for school-by-year effects, providing strong evidence that neither selection nor common shocks are driving the results.

Down From The Mountain: Skill Upgrading And Wages In Appalachia, Christopher Bollinger, James P. Ziliak, Kenneth R. Troske

University of Kentucky Center for Poverty Research Discussion Paper Series

Despite evidence that skilled labor is increasingly concentrated in cities, whether regional wage inequality is predominantly due to differences in skill levels or returns is unknown. We compare Appalachia, with its wide mix of urban and rural areas, to other parts of the U.S., and find that gaps in both skill levels and returns account for the lack of high wage male workers. For women, skill shortages are important across the distribution. Because rural wage gaps are insignificant, our results suggest that widening wage inequality between Appalachia and the rest of the U.S. owes to a shortage of skilled cities.

The Labor-Market Returns To Community College Degrees, Diplomas, And Certificates, Christopher Jepsen, Kenneth R. Troske, Paul Coomes

University of Kentucky Center for Poverty Research Discussion Paper Series

This paper provides the first detailed empirical evidence of the labor-market returns to community college diplomas and certificates. Using detailed administrative data from Kentucky, we estimate panel-data models that control for differences among students in pre-college earnings and educational aspirations. Associate’s degrees and diplomas have quarterly earnings returns of nearly $2,000 for women, compared to returns of approximately $1,500 for men. Certificates have small positive returns for men and women in most specifications. There is substantial heterogeneity in returns across fields of study. Degrees, diplomas, and certificates all correspond with higher levels of employment.

Cities, Economic Development, And The Role Of Place-Based Policies: Lessons For Appalachia, Matthew Kahn

University of Kentucky Center for Poverty Research Discussion Paper Series

This paper surveys economic research on the association between economic development and urban areas, links this summary to some important trends in economic outcomes in Appalachia in recent decades, highlights areas in need of future research on the role of urban areas as engines of economic development in Appalachia, and discusses what types of place-based policies might be effective to promote economic growth and development in the Appalachian region.