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All posts by Rohan Mascarenhas

RSF Authors Greg Duncan and Richard Murnane Discuss Education Gaps in the U.S.

Rohan Mascarenhas, Harvard Kennedy School
February 20, 2014

As a follow up to their landmark volume, Whither Opportunity?, Greg Duncan and Richard Murnane have written a new book that shows how—in a time of spiraling inequality—strategically targeted interventions and supports can help schools significantly improve the life chances of low-income children. Co-published by the Russell Sage Foundation and the Harvard Education Press, Restoring Opportunity presents a deeply researched and hopeful education agenda that can counteract the corrosive effects of unequal family resources, disadvantaged neighborhoods, and worsening school conditions on American schools.

During a forum at the Harvard Graduate School of Education earlier this month, Murnane and Duncan summarized the worrying gaps in education that have emerged as inequality has increased. One problem is the different amounts that families spend on their children’s education: high-income families now spend around $9,000 a year on “enrichment activities,” such as books, computers, and summer camps, while poorer families in the bottom 20 percent of the income distribution manage only $1,300. "That’s a huge gap,” Duncan said, "and it leads to a huge difference at the point of school entry.” Another issue is the rise in income residential segregation, which has concentrated the number of low-income children in particular neighborhoods. “Think about the kind of burdens that places on schools,” Duncan said. “It concentrates behavior problems. It makes it more difficult to attract high quality teachers.”

The Complications of Choosing Affordable Health Care

Rohan Mascarenhas, Harvard Kennedy School
October 14, 2013

Last week, the federal government unveiled its online health insurance marketplace, a milestone in the implementation of the Affordable Care Act. While much of the media coverage has focused on the technical glitches of the online portal—thousands of Americans reported long wait times, for example—a more fundamental policy question is at stake. The Obama Administration has argued that presenting insurance plans to consumers in one place and in a transparent fashion will spur competition among insurers, lower costs, and ultimately improve satisfaction. But what do we actually know about how consumers choose their health insurance plans? The stakes are high: If consumers choose wrongly, they may incur higher costs and premiums, and the federal government, which will subsidize these plans, may end up footing a larger bill. In this case, more competition may not lead to lower health care costs.
A new paper, published with the support of the Russell Sage Foundation, provides worrying evidence that consumers choosing health insurance are often prone to errors, over-confidence, and cost biases. The authors, Eric Johnson, Tom Baker, and Ran Hassin and their colleagues, used a model of the online health exchanges to test consumer decision-making. They asked subjects to pick a health insurance plan for a family of three, with a particular number of doctor visits and out-of-pocket health care costs over the next year. The results were dismal: When asked to choose among four plans, subjects selected the cost-effective option only 42 percent of the time, with the average error costing over $200. When presented eight options, subjects selected the correct option 21 percent of the time.

Racial Inequality Without Racism: An Interview with Nancy DiTomaso

Rohan Mascarenhas, Russell Sage Foundation
April 3, 2013

racial inequalityNancy DiTomaso is Professor of Management and Global Business at Rutgers Business School—Newark and New Brunswick. She is also the author of our latest book, The American Non-Dilemma, which provides a comprehensive examination of the persistence of racial inequality in the post-Civil Rights era and how it plays out in today's economic and political context.

Q: Let’s start with the title of your book, a reference to the landmark text by Gunnar Myrdal, The American Dilemma. Myrdal argued that white Americans would eventually face the contradiction or dilemma between their belief in American values such as equality and fair opportunity on the one hand, and the growing attention to racial inequality on the other. You argue, however, that for many whites, no such dilemma currently exists. Why do you believe whites are "uncertain allies in the struggle for civil rights"?

A: Myrdal’s argument, contrary to the way it is often portrayed, is that white Americans would experience a moral dilemma because of the contradiction between the foundational beliefs held by all Americans toward equality before the law and fair play and the growing evidence at the time he was writing of racial inequality in the politics of the 1930s, as well as in the racial dimension of World War II (i.e., a fight against an ideology of racial supremacy in Germany and Japan), which he claimed was understood around the world. He believed that this moral dilemma would lead some whites, especially in the North, to use both law and social movements to bring about an end to the racial caste system, especially in the South.

I found in my analysis, however, that in the post-Civil Rights period, the framing of racial inequality in terms of racism and discrimination, that is, of some whites doing bad things to or holding back nonwhites, especially African Americans, contributes to an American Non-Dilemma. Because whites do not have to actively exclude or do bad things to blacks in order to benefit from racial inequality, they do not experience the kind of moral dilemma that Myrdal believed would move them to support social change. Thus, in the post-Civil Rights period, I argue that it is whites helping other whites that may be as much a factor in reproducing racial inequality as whites discriminating against or expressing racist feelings towards blacks and other nonwhites. Indeed, most whites say they believe in civil rights, believe that equal opportunity is the standard of fairness, and believe that everyone should be rewarded for their efforts. They do not readily think about the extent to which they drew on the social resources and help from family, friends, and acquaintances in order to get their own jobs. Yet, I found that this is how the interviewees in my study found most of their jobs throughout their lifetimes.

Q: One of your main arguments is that the national conversation on racial inequality remains too focused on racism, or racial discrimination. Instead, you say we should focus on “in-group favoritism” in terms of whites helping other whites. Explain how this dynamic works, and why you think it’s a better frame for thinking about racial inequality.

A: Because whites disproportionately hold jobs with more authority, higher pay, more opportunities for skill development and training, and more links to other jobs, they can benefit from racial inequality without being racists and without discriminating against blacks and other nonwhites. In fact, I argue that the ultimate white privilege is the privilege not to be racist and still benefit from racial inequality.

In my study, I found that 99 percent of the interviewees found 70 percent of the jobs they had held throughout their lifetimes with the added help from family, friends, or acquaintances, who provided them with inside information not available to others, such as when a job was available, used influence on their behalf, or actually offered them an opportunity or a job. That is, although all of the interviewees said that equal opportunity is the standard of fairness, almost all of them actively sought "unequal opportunity” in their own lives. The last thing that they would want was to have to compete equally in the job market, when finding a job that paid a living wage, provided benefits and some job security was so important to having a decent life. Given this, most wanted to find ways to “get ahead” or to “gain advantage.”

The Impact of Early Education: An Interview with Jane Waldfogel

Rohan Mascarenhas, Russell Sage Foundation
February 28, 2013

preschool researchJane Waldfogel is a professor of social work and public affairs at Columbia University School of Social Work. She has written extensively on early childhood education and the impact of public policies on child and family well-being. In this interview, she discusses President Obama's recent proposal to expand access to preschool.

Q: In response to President Obama's preschool plan, many opinion writers pointed skeptically to Head Start, the major federal early education program. It seems to be settled fact in Washington that Head Start, to quote TIME's Joe Klein, "simply does not work." Others argue that most of the other research on early education comes from targeted, intensive programs, such as the Perry Project, whose quality will probably not be replicated in scaled-up efforts. So let me ask you -- do you think that available research supports higher investments in early education programs? Is there evidence or unanswered questions that gives you pause about expanding preschool access?

A: While policymakers in Washington have been debating the merits of Head Start, and the generalizability of the early model programs such as Perry, state lawmakers have been quietly moving forward with universal pre-kindergarten (pre-K). These pre-K programs, which now serve more than 20% of 4-year olds, differ from Head Start, and the early model programs, in some very important ways. First, they are universal – they are open to all children in the community (although when resources are limited, states do try to serve disadvantaged children and communities first). And second, they are administered and supervised by the schools (even if not always located at schools – in some states, community-based providers can be approved as pre-K providers as long as they meet the pre-K requirements, which include highly qualified teaching staff and approved curricula). This quiet pre-K expansion has been going on for some time, and we now have quite a bit of evidence about its effects (see review in Ruhm & Waldfogel, 2012). That evidence is clear – children who have the opportunity to attend pre-K enter school with better reading and math skills, and these effects tend to be largest for the children who would otherwise be the furthest behind. These results come from studies in several states, using rigorous methods such as regression discontinuity analyses. Governors and state legislators are familiar with this research evidence, and they have been eager to expand pre-K programs. But it’s tough to do this with limited state funds. So that’s why the Obama initiative to make federal funds available is so welcome.

Life Expectancy Predictions

Rohan Mascarenhas, Russell Sage Foundation
February 27, 2013

life expectancy tasksProjecting how long you think you will live is a crucial exercise in retirement planning. An estimate of life expectancy could determine, for example, your savings rate, a portfolio allocation, or whether or not you should buy an annuity. The standard theoretical model predicts that individuals make unbiased estimates of their life expectancy based on personal, relevant information, such as family history, illness, lifestyle choices, and so on. But a new paper, funded by our consumer finance working group, suggests that life expectancy estimates can be, at least in part, also affected by irrelevant context factors -- in this case, the way survey questions are worded.

For their newly published article, John W. Payne, Namika Sagara, Suzanne Shu, Kirstin C. Appelt and Eric J. Johnson conducted experiments in which they asked half of the respondents to provide probabilities of their living to a certain age, and the other half to provide probabilities of their dying by a certain age. Ostensibly, these questions are asking the same thing, but the results yielded a surprising result: Those given the "live-to" question reported significantly higher chances of being alive at ages 55 through 95 than those who answered the "die-by" question. In fact, in the first two surveys, which included nearly 2,000 respondents, the mean life expectancy was 8.68 years higher in the live-to frame than the die-by frame.

Cross-Deputization and Immigration Enforcement: An Interview with Dr. Liana Epstein

Rohan Mascarenhas, Russell Sage Foundation
January 16, 2013

cross-deputizationDr. Liana Epstein, a social psychologist connected with RSF's Racial Bias in Policing Working Group, recently co-published an article on cross-deputization, which mandates that police officers enforce immigration laws. The article, entitled "Safety or Liberty?: The Bogus Trade-Off of Cross-Deputization Policy" can be read here.

Q: Let's first define the issue -- what exactly is "cross-deputization" and why has it become such a prominent issue?

A: Cross-deputization (codified in 1996 as part of the Immigration and Nationality Act) is an optional federal training program that "deputizes" police officers to seek out undocumented immigrants and to charge them for their presence in the country without documents. This policy has gained significant popularity in recent years (U. S. Department of Homeland Security, 2008), culminating in laws such as Arizona’s SB 1070 (enacted in 2010). It has become a prominent issue because of its burgeoning popularity and the potentially negative consequences it engenders.

Q: Your paper argues that the debate over cross-deputization wrongly pits civil rights against safety. Instead, you say that ensuring civil rights is a "necessary precondition of public safety and lawfulness" because it protects police legitimacy. Why do you believe that police officers enforcing immigration laws would hurt the perception of police?

A: Our research operates from the premise that cross-deputization is "poisonous" because it is not applied equally across groups. When one is told to “find the illegal immigrant,” it is not Caucasians who have overstayed their visas who are likely to be asked for proof of their right to be in the country. We argue that as Latinos have become the accessible “picture in our heads” for undocumented immigrants there are no truly “race-blind” cues to documentation status, and thus any basis for enforcement will ultimately target Latinos disproportionately. Thus cross-deputization is inherently racialized and becomes not a question of legal versus illegal, but Latino versus non-Latino. Consequently police officers are then seen as racist. My dissertation explored this in more detail.

Rethinking the Financial Crisis: An Interview with Andrew Lo

Rohan Mascarenhas, Russell Sage Foundation
January 9, 2013

financial crashA professor of finance at MIT, Andrew W. Lo is an editor of the RSF volume Rethinking the Financial Crisis. The volume addresses important questions about the complex workings of American finance and shows how the study of economics needs to change to deepen our understanding of the financial sector.

Q: In a recent paper, in which you review more than 20 books on the financial crisis, you wrote, "there is still significant disagreement as to what the underlying causes of the crisis were, and even less agreement as to what to do about it." What is it about the financial crisis that has prevented economists from offering a definitive account of its origins?

A: There are at least three challenges in understanding something as complex as the recent financial crisis: the breadth of knowledge needed to span the various parts of the financial system, the data, and the motivation. The crisis involved regulatory issues, financial innovation, real estate markets, accounting rules, investment and commercial banking, and monetary policy. No single individual has all the necessary expertise to span all these issues, which means that the individuals with the domain-specific knowledge must collaborate to piece together this incredibly intricate jigsaw puzzle. But even if we had the collective expertise, we would still need to gather significant amounts of data to test the various hypotheses proposed by the experts. Finally, while some of this forensic analysis is being done by economists such as those in Rethinking the Financial Crisis, much greater resources are needed to conduct a larger and more systematic analysis, and those resources aren't forthcoming because there isn't a consensus that we need to get to the bottom of these issues. For example, the Dodd-Frank Act was passed more than half a year prior to the final report of the Financial Crisis Inquiry Commission, and that report wasn't even able to come to a common conclusion (the bipartisan commission came to three mutually contradictory conclusions!).

Q: Many people believe that the financial crisis revealed major shortcomings in the discipline of economics, and one of the goals of your book is to consider what economic theory tells us about the links between finance and the rest of the economy. Do you feel that economists understand enough about the nature of financial instability or liquidity crises?

A: I think that the financial crisis was an important wake-up call to all economists that we need to change the way we approach our discipline. While economics has made great strides in modeling liquidity risk, financial contagion, and market bubbles and crashes, we haven't done a very good job of integrating these models into broader macroeconomic policy tools. That's the focus of a lot of recent activity in macro and financial economics and the hope is that we'll be able to do better in the near future.

Literature Review: ASSA 2013 Edition

Rohan Mascarenhas, Russell Sage Foundation
January 4, 2013

Literature Review, a new feature on RSF Review, will appear every Friday and display links to interesting social science research we have encountered during the week. Since the ASSA 2013 meeting is underway in San Diego, this week, we present some of the working papers presented at the conference by scholars supported by recent RSF grants.

  • The Long-Term Impacts of Moving to Opportunity
  • Measuring the Trends in Inequality of Individuals and Families: Income and Consumption
  • Have Good Jobs Been Disappearing in the U.S.?
  • The Effect of Providing Peer Information on Retirement Savings Decisions
  • Medicaid and Long-Term Care: An Interview with Leonard E. Burman

    Rohan Mascarenhas, Russell Sage Foundation
    November 6, 2012

    long-term careLeonard E. Burman is Professor of Practice in Public Administration and International Affairs at Syracuse University. An expert in public finance and modeling the effects of government policies on individuals' and firms' decisions, Burman contributed a chapter to RSF's free e-book, Universal Coverage in Long-Term Care in the United States.

    Q: First, we should establish some facts. How do Americans pay for long-term care? Is it mostly informal, unpaid work – assistance from families and friends – or do private insurance and Medicaid pay most of the bill?

    A: Family and friends provide a lot of informal care and most people with long-term care needs live in the community, not in nursing homes. Medicaid pays for about 40 percent of the cash costs and Medicare pays for 23 percent. The rest is paid for by private insurance or out-of-pocket.

    Q: You write that if current trends persist, we could face a fiscal “catastrophe.” How big of a burden is long-term care on the Medicaid budget, and why do you think it will increase “dramatically” in the coming decades?

    A: Medicaid is a large and growing share of the federal and state budgets and almost one-third of Medicaid goes to cover long-term care expenses—a share that will rise over time. In 2009, federal and state spending on Medicaid was about 2.7 percent of GDP. That is more than half of spending on defense, which is less than 5 percent of GDP. In 2008, 30 percent of Medicaid spending paid for long-term care, but that percentage will increase dramatically over time as baby boomers age and their long-term care needs rise. Assuming a continuation of current policy, demographic and health cost trends, federal and state spending on Medicaid will exceed spending on defense by 2040.

    Two factors drive this rapid growth. First, the proportion of the population aged 85 and over will almost double between now and 2040. More than one-fifth of this group was in nursing homes in 1995. Second, health care costs continue to grow faster than the economy—by more than two percent per year on average. Assuming nursing home costs track health care spending, this translates into steadily increasing Medicaid spending relative to GDP.

    Q: A major argument in your chapter is that “the incentives in our long-term care system are all wrong.” I wanted to focus on this point – are you saying that if Medicaid didn’t exist, more Americans would save more for long-term care insurance? Isn’t it also possible that Americans simply underestimate their future need for long-term care, or that the private insurance market isn’t a viable option for many?

    A: There’s a lot of evidence that people underestimate the cost of long-term care and the private insurance market certainly has a lot of problems, but public policy should aim to address those problems. Instead, it exacerbates them. Medicaid amounts to a 100-percent tax on assets above the threshold for eligibility for assistance (typically, $2,000 for a single person), which provides a powerful disincentive to save. Medicaid also strongly discourages purchasing long-term care insurance because much of what is covered under private insurance simply replaces services provided for free under Medicaid.

    Desegregation in the Private Sector: An Interview with Kevin Stainback and Donald Tomaskovic-Devey

    Rohan Mascarenhas, Russell Sage Foundation
    October 15, 2012

    workplace diversityKevin Stainback and Donald Tomaskovic-Devey are the co-authors of the RSF book Documenting Desegregation: Racial and Gender Segregation in Private-Sector Employment Since the Civil Rights Act. The volume offers the most comprehensive account to date of what has happened to equal opportunity in America and is an indispensable guide for those seeking to understand where America stands in fulfilling its promise of a workplace free from discrimination.

    Q: Your book draws on data collected by the U.S. Equal Employment Opportunity Commission (EEOC) that report on more than 5 million workplaces between 1966 and 2005. Talk a little about the data – what are in these reports and why were they collected? Secondly, have social scientists been able to use them before to analyze desegregation trends?

    A: The Civil Rights Act of 1964 provided numerous legal gains for previously disadvantaged groups. With regards to employment, the act outlawed racial and gender discrimination and segregation; it also created the EEOC, which was mandated to monitor progress toward an equal opportunity society. This federal regulatory agency was charged with processing discrimination complaints and collecting annual data from private sector organizations. These annual reports, known as EEO-1 reports, contain the race and gender composition of occupations for each workplace in private sector firms with more than 100 employees. The EEO-1 surveys of private sector workplaces we analyze in this book were the primary tool mandated by the Civil Rights Act to monitor progress in private sector firms toward equal employment opportunity.

    The EEOC, unfortunately, has never had the resources to use these data for the Act’s intended purpose. Additionally, these data have only been used occasionally in the past by social scientists. More recently, social scientists have had increased access to these EEOC-generated data, but access remains difficult and the EEOC is extremely limited in its ability to use these data to identify systemic employment discrimination.

    In the 1960s corporations were terrified of being held publicly accountable for employment discrimination. The political pressures of those times severely limited the EEOC's ability to analyze these data or to share them with either the academic community or society at large. It is our hope that these data will become more available to both the academic community and the public at large.

    In short, these extraordinary data are remarkable in scope and have very rarely been analyzed until recently. Documenting Desegregation provides the most systematic analysis of change in racial and gender employment opportunities since the Civil Rights Act.