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RSF President Sheldon Danziger on the Release of the Supplemental Poverty Measure

Sheldon Danziger, Russell Sage Foundation
November 6, 2013

The Supplemental Poverty Measure (SPM) released by the U.S. Census Bureau today (November 6, 2013) shows that the poverty rate for all persons was 16.0 percent in 2012, virtually the same as in 2011, 16.1 percent. A key finding in today’s Census release is that millions of people would have been poor in 2012 in the absence of our safety net programs. For example, the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) raised about 5 million people above the poverty line; the Earned Income Tax Credit (EITC) and other refundable tax credits raised more than 9 million people above the poverty line.
The Supplemental Poverty Measure (SPM) is important because, unlike the Official Poverty Measure (OPM) which counts only money income (e.g., wages and cash transfers from the government), the SPM also includes non-cash government benefits such as SNAP, the school lunch program, housing subsidies and the EITC. These noncash benefits have grown more rapidly than cash benefits in recent decades.

RSF Author Greg J. Duncan Wins Jacobs Research Prize

October 31, 2013

The Russell Sage Foundation congratulates Greg J. Duncan, Distinguished Professor at the UC Irvine School of Education, who recently won the 2013 Klaus J. Jacobs Research Prize for his extensive and influential research on the long-term effects of poverty on child development. For over 25 years, Duncan and his colleagues followed a sample of American families and their children to measure the correlations between poverty in early life and life circumstances as adults. The resulting data showed that children from poor families are less likely to finish school and go on to work, and that they earn less than their peers from higher income families. Duncan and his colleagues additionally found that childhood poverty during the first five years of children’s lives has a greater impact on their later lives.
A former RSF Visiting Scholar (2004-2005), Duncan is also the co-author or co-editor of several RSF books exploring the impact of poverty on children, including Consequences of Growing Up Poor, Higher Ground: New Hope for the Working Poor and their Children, Neighborhood Poverty Volume One and Volume Two, and For Better and For Worse: Welfare Reform and the Well-Being of Children and Families. With Richard J. Murnane, Duncan most recently co-edited Whither Opportunity?: Rising Inequality, Schools, and Children's Life Chances, which examines the corrosive effects of unequal family resources, disadvantaged neighborhoods, insecure labor markets, and worsening school conditions on children’s K-12 education.

New Issue of Annals Addresses the Effects of the Great Recession, with Contributions by RSF Grantees

October 30, 2013

The November issue of the Annals of the American Academy of Political and Social Science examines the aftermath of the Great Recession and the ways in which federal and state policies affected the course of the crisis. The issue includes an introduction by Russell Sage Foundation president, Sheldon Danziger, and features contributions from a distinguished group of leading social scientists, including several papers by scholars who contributed research to the Foundation’s Great Recession Initiative.
As Danziger outlines in his introduction, the Great Recession—which the National Bureau of Economic Research officially dates as lasting from December 2007 through June 2009—marks the most severe economic downturn since the Great Depression in the 1930s. In looking at the lingering effects on the housing market, unemployment rate, and an ever-widening wealth gap, research from the issue documents the significant social and economic costs of the recession—effects that are likely to persist for at least another decade.
The Russell Sage Foundation’s Great Recession Initiative provided support for many of the papers published in this issue of the Annals. Established in 2010, the Great Recession Initiative is a major research project which examines the effects of the Great Recession across a broad swath of America’s social and economic life. Moving beyond a simple description of trends, the Initiative analyzes some unanticipated implications of the downturn and uses a variety of methods and datasets to investigate many of the vexing and often unprecedented policy problems posed by the economic disruption, such as the slow recovery of the labor market and the rightward drift of political sentiment. In collaboration with the Stanford Center on Poverty and Inequality, the Foundation also launched the Recession Trends website as part of the Initiative, a resource dedicated to monitoring the social and economic fallout of the recession.

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.

Holder's Announcement a Good Small Step

Steven Raphael and Michael A. Stoll, Russell Sage Foundation
October 11, 2013

Steven Raphael is Professor of Public Policy at the University of California, Berkeley. Michael A. Stoll is Professor of Public Policy at the University of California, Los Angeles. They are the authors of Why Are So Many Americans in Prison?, a new book published by the Russell Sage Foundation that analyzes the shocking expansion of America’s prison system and illustrates the pressing need to rethink mass incarceration in this country.
Attorney General Eric Holder’s announcement last month that federal prosecutors will no longer seek stiff mandatory minimum sentences for low-level drug offenders marks a momentous shift in U.S. sentencing practices. After three decades of state and federal policy makers ratcheting up the severity of punishment for felony offenders, this is perhaps the most high profile example of policymakers across the country reevaluating the merits of these unusually harsh sentences. This is a welcome shift in policy that hopefully will be followed by state legislators across the country.

How the War on Poverty Still Helps Families with Children: An Interview with Jane Waldfogel

October 3, 2013

Legacies of the War on Poverty, a new book co-edited by Martha Bailey and Sheldon Danziger (Russell Sage Foundation, September 2013), offers a timely assessment of the War on Poverty, highlighting some remarkable policy successes of President Johnson’s antipoverty reforms in the 1960s—many of which still form the basis of the social safety net as we know it today. As we approach the fiftieth anniversary of Johnson’s 1964 State of the Union address—the speech in which he declared an “unconditional war on poverty”—we will feature research and additional author insights from the book in an ongoing Q&A series on the RSF blog.
Our first interview is with Jane Waldfogel, professor of social work and public affairs at the Columbia University School of Social Work and author of the chapter “The Safety Net for Families with Children.” Waldfogel’s research examines the lasting effects of War on Poverty initiatives for low-income families with children, focusing on three enduring areas of the Johnson administration’s efforts to provide support for poor families, including food assistance benefits, cash welfare, and employment-contingent income support. A policy brief on the research from her chapter can be found here.
Q. Your chapter in Legacies of the War on Poverty illustrates the success of Food Stamps-SNAP in reducing food insecurity and lowering poverty rates (when using the Supplemental Poverty Measure). Yet, the House recently passed a bill that would cut SNAP by almost $40 million. What kinds of political shifts have occurred between the start of the War on Poverty and today that would account for this dramatic turn?

RSF Behavioral Economics Roundtable Member Colin Camerer Named 2013 MacArthur Fellow

September 25, 2013

Colin Camerer, Robert Kirby Professor of Behavioral Economics at the California Institute of Technology, has been named one of the MacArthur Foundation’s 2013 Fellows. Camerer is a founding member of the Russell Sage Foundation's Behavioral Economics Roundtable as well as a former RSF Visiting Scholar.
The Roundtable is one of the major activities of the Russell Sage Foundation’s Behavioral Economics research program. Made up of 28 prominent behavioral economists, including Camerer, the Roundtable currently sponsors three main activities: a small grants program for younger scholars undertaking behaviorally oriented research; a two-week summer workshop taught by Roundtable members for graduate students and junior faculty interested in entering this new interdisciplinary field; and a book series in a behavioral economics, of which Camerer is co-editor. Camerer is the author of Behavioral Game Theory and the co-editor of Advances in Behavioral Economics, both co-published with Princeton University Press.

Confronting the Critics: We Haven't Lost the War on Poverty

September 18, 2013

Yesterday the U.S. Census Bureau released the annual official poverty rate, which measured 15.0% in 2012 and represented 46.5 million people living at or below the poverty line­­. According to the Census report, real median household income and the poverty rate has remained static since 2011.
This year, the annual report coincides with an ongoing political battle in Congress over the Supplemental Nutrition Assistance Program (SNAP), or food stamps. A bill introduced by the House GOP seeks to cut the program by more than $40 billion over a span of ten years. The food stamps program, which served approximately 48 million low-income Americans last year, dates back to the Johnson administration's War on Poverty, a sweeping set of federal initiatives that laid the groundwork for much of the current aid available to low-income individuals and families.
Given the persistently high poverty rate in the U.S., is it accurate to say that the nation has lost the War on Poverty? In an op-ed in today’s New York Times, RSF President Sheldon Danziger, co-editor of the recent book Legacies of the War on Poverty, explains why looking at the official number alone may be misleading. Contrary to the claims of Congress members like Representative Paul Ryan, Danziger notes, the antipoverty programs established during the 1960s have in fact delivered significant and effective relief to low-income populations. The official poverty rate measures only cash income. But if non-cash benefits such as food stamps and earned-income tax credits are taken into account when assessing federal efforts to help the poor, the poverty rate drops significantly—down to about 11%. According to Danziger, “Lowering poverty means both recognizing the successes of safety net programs we now have and devising new policies that can spread the gains generated by economic growth.”

RSF President Sheldon Danziger on the Release of the Annual U.S. Poverty Statistics

Sheldon Danziger, Russell Sage Foundation
September 17, 2013

The Annual Census Bureau report released today (September 17, 2013) shows no meaningful changes in poverty, earnings, or median household income. This is because between 2011 and 2012 the unemployment rate fell only slightly and there was no significant growth in weekly earnings (as reported by the Bureau of Labor Statistics).
Poverty is higher today than it was in 2000 and household incomes are lower. The “lost decade” is likely to turn into “two lost decades,” because poverty will fall substantially in the next 5 years only if two factors are at work. First, the economy must continue to expand and the unemployment rate must fall to 5 percent. Second, government policies must do more to help those among the poor and near-poor who have been left behind by economic growth in recent decades.
If safety net programs are targeted to balance the budget, as House Republicans have proposed, poverty will increase. Even if the safety net is not cut back, the prospects for reducing poverty are dim. The only bright spot is that private sector employment has been increasing, but it is not that bright since many of the new jobs pay low wages.
In addition, government has contributed to increased poverty. The federal sequestration, the end of extended unemployment insurance benefits and the failure to expand spending on early education programs or infrastructure projects has reduced demand. And, state and local governments have increased poverty by laying off teachers, police and other workers.
Even if poverty should start falling in the coming year as the economy grows, it is likely to take more than 5 years just to reach the rate achieved in the late 1990s. Given the status quo in the economy and in public policy, we will continue to get disappointing news about the poverty rate from the Census Bureau each September.

Announcing the 2013-2014 RSF Scholars

September 12, 2013

This month the Foundation welcomes nineteen new scholars into our building to spend the academic year. During their time in residence, these scholars will pursue research and writing projects that reflect the Foundation’s commitment to strengthening the social sciences and applying research more effectively to important social problems.

This year’s class of scholars, who have arrived from institutions across the globe, includes a working group on economic inequality that will analyze differences in school achievement among children of different socioeconomic status in Australia, Canada, the United Kingdom, and the United States. Other researchers will undertake projects ranging from investigations into restrictions on immigrants’ access to social welfare, to psychology research on self-control, to analyses of community violence across three different countries. Working within one of the Foundation’s core programs on Social Inequality, Immigration, and Cultural Contact—or performing independent research—our 2013-2014 scholars will investigate diverse sections of the social sciences in ways that promise to impact policy decisions and social life in the US.