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Cover image of the book Local Justice
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Local Justice

Author
Jon Elster
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6 in. × 9 in. 296 pages
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978-0-87154-232-8
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The well-being of individuals routinely depends on their success in obtaining goods and avoiding burdens distributed by society. Local Justice offers the first systematic analysis of the principles and procedures used in dispensing "local justice" in situations as varied as the admission of students to college, the choice of patients for organ transplants, the selection of workers for layoffs, and the induction of men into the army. A prominent theorist in the field of rational choice and decision making, Jon Elster develops a rich selection of empirical examples and case studies to demonstrate the diversity of procedures used by institutions that mete out local justice. From this revealing material Elster fashions a conceptual framework for understanding why institutions make these crucial allocations in the ways they do.

Elster's investigation discloses the many complex and varied approaches of such decision-making bodies as selective service and adoption agencies, employers and universities, prison and immigration authorities. What are the conflicting demands placed on these institutions by the needs of applicants, the recommendations of external agencies, and their own organizational imperatives? Often, as Elster shows, methods of allocation may actually aggravate social problems. For instance, the likelihood that handicapped or minority infants will be adopted is further decreased when agencies apply the same stringent screening criteria—exclusion of people over forty, single parents, working wives, and low-income families—that they use for more sought-after babies.

Elster proposes a classification of the main principles and procedures used to match goods with individuals, charts the interactions among these mechanisms of local justice, and evaluates them in terms of fairness and efficiency. From his empirical groundwork, Elster builds an innovative analysis of the historical processes by which, at given times and under given circumstances, preferences become principles and principles become procedures. Local Justice concludes with a comparison of local justice systems with major contemporary theories of social justice—utilitarianism, John Rawls's A Theory of Justice, Robert Nozick's Anarchy, State, and Utopia—and discusses the "common-sense conception of justice" held by professional decision makers such as lawyers, economists, and politicians. The difference between what we say about justice and how we actually dispense it is the illuminating principle behind Elster's book.

A perceptive and cosmopolitan study, Local Justice is a seminal work for all those concerned with the formation of ethical policy and social welfare—philosophers, economists, political scientists, health care professionals, policy makers, and educators.

JON ELSTER is Edward L. Ryerson Distinguished Service Professor of Political Science and Philosophy at the University of Chicago.

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Cover image of the book A Working Nation
Books

A Working Nation

Workers, Work, and Government in the New Economy
Authors
Rebecca M. Blank
Joseph Blasi
Douglas Kruse
Karen Lynn-Dyson
William A. Niskane
David T. Ellwood
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6 in. × 9 in. 168 pages
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978-0-87154-247-2
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"This rigorous but readable collection of essays offers penetrating analyses of the changes in earnings and working conditions over the past generation, along with diverse proposals for addressing the challenges of change. These essays are a valuable point of reference for policies designed to improve the well-being of American workers."
-WILLIAM A. GALSTON, University of Maryland

"Few people know more, care more, or think more practically about the struggles and aspirations of the working poor than David Ellwood and the authors of this volume. This book is a clear and eloquent call for a national commitment to a simple moral proposition: Americans who work ought not to be poor. The authors offer remedies that cut through the ideological barriers and political bickering that so often block the quest for solutions. May both parties, and all citizens, take this book to heart."
-E.J. DIONNE, Author of Why Americans Hate Politics

The nature of work in the United States is changing dramatically, as new technologies, a global economy, and more demanding investors combine to create a far more competitive marketplace. Corporate efforts to respond to these new challenges have yielded mixed results. Headlines about instant millionaires and innovative e-businesses mingle with coverage of increasing job insecurity and record wage gaps between upper management and hourly workers. A Working Nation tracks the profound implications the changing workplace has had for all workers and shows who the real economic winners and losers have been in the past twenty-five years.

A Working Nation sorts fact from fiction about the new relationship between workers and firms, and addresses several critical issues: Who are the real winners and losers in this new economy? Has the relationship between workers and firms really been transformed? How have employees become more integrated into or disconnected from corporate strategies and performance? Should government step into this new economic reality and how should it intervene?

Among the topics investigated, David T. Ellwood explores and explains the apparent paradox between the steady rise in per capita national income and the stagnant wages of middle- and working-class workers. Douglas Kruse and Joseph Blasi study relative changes in long-term vs. temporary work, and evaluate the introduction of profit-sharing schemes and high performance workplace programs. William A. Niskanen and Rebecca M. Blank, both former members of the president's Council of Economic Advisers, offer their perspectives on what direction government might take to make this a working nation for everyone. Though Niskanen and Blank take alternative approaches, they both conclude that the primary policy emphasis ought to be on the problems of the least skilled more than on inequality per se, and that a focus on childhood education and tax supports for low-income working families should be of primary concern.

A Working Nation paints a compelling and surprisingly consistent picture of today's workplace. While the booming economy has created millions of new jobs, it has also lead to an alarmingly unbalanced system of rewards that puts less-skilled, and many middle-class, workers at risk. This book is essential reading for those seeking the most efficient answers to the challenges and opportunities of the evolving economy.

DAVID T. ELLWOOD is Lucius N. Littauer Professor of Political Economy at the John F. Kennedy School of Government, Harvard University. He is also director of the Aspen Domestic Strategy Group.

REBECCA M. BLANK was a member of the Council of Economic Advisers under President Clinton. She is Henry Carter Adams Collegiate Professor of Public Policy, dean of the Gerald R. Ford School of Public Policy, and professor of economics at the University of Michigan.

JOSEPH BLASI is professor of sociology at the School of Management and Labor Relations, Rutgers University.

DOUGLAS KRUSE is professor of economics at the School of Management and Labor Relations, Rutgers University. He is also research associate  of the National Bureau of Economic Research.

WILLIAM A. NISKANEN was a member of the Council of Economic Advisers under President Reagan and is chairman of the Cato Institute.

KAREN LYNN-DYSON is associate director of the Aspen Institute’s Domestic Strategy Group.

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Cover image of the book Higher Ground
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Higher Ground

New Hope for the Working Poor and Their Children
Authors
Greg J. Duncan
Aletha C. Huston
Thomas S. Weisner
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$34.95
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6 in. × 9 in. 184 pages
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978-0-87154-167-3
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Winner of the 2007 Richard A. Lester Prize for Outstanding Book in Labor Economics and Industrial Relations

"[Higher Ground] is valuable for what it tells us not only about strategies to fight poverty, but also about how to generate evidence on strategies to fight poverty."
-INDUSTRIAL & LABOR RELATIONS REVIEW

"Higher Ground describes the results from the New Hope demonstration project in Milwaukee, one of the most creative social experiments of the past twenty- five years. It tells how New Hope was designed to help participants move into jobs, retain health insurance, and find effective child care. While not all the results of the program were positive, they do show that good policies can make a difference in providing economic stability to low-income families. The les sons from New Hope, described in this book, should be part the current public discussion. This is a book that students, researchers, and policy analysts will all find useful."
-REBECCA M. BLANK, Joan and Sanford Weill Dean of Public Policy, Gerald R. Ford School of Public Policy, University of Michigan

"New Hope was an ambitious experiment in helping the poor and near-poor. Higher Ground brings out its full significance and potential, especially by showing the effects on families and children. Greg J. Duncan, Aletha C. Huston, and Thomas S. Weisner make visible what rebuilding the welfare state around employment might mean."
-LAWRENCE M. MEAD, professor of politics, New York University

"Higher Ground puts the word 'hope' back into the debate about poverty, offering compelling evidence that government can make a difference in the lives of the poor. While others sought to 'end welfare as we know it,' the architects of New Hope had a grander vision, to end poverty as we know it. New Hope restored dignity and rewarded work, and its impact extended to the next generation."
-KATHRYN EDIN, visiting professor of public policy, John F. Kennedy School of Government, Harvard University

During the 1990s, growing demands to end chronic welfare dependency culminated in the 1996 federal “welfare-to-work” reforms. But regardless of welfare reform, the United States has always been home to a large population of working poor—people who remain poor even when they work and do not receive welfare. In a concentrated effort to address the problems of the working poor, a coalition of community activists and business leaders in Milwaukee, Wisconsin, launched New Hope, an experimental program that boosted employment among the city’s poor while reducing poverty and improving children’s lives. In Higher Ground, Greg Duncan, Aletha Huston, and Thomas Weisner provide a compelling look at how New Hope can serve as a model for national anti-poverty policies.

New Hope was a social contract—not a welfare program—in which participants were required to work a minimum of thirty hours a week in order to be eligible for earnings supplements and health and child care subsidies. All participants had access to career counseling and temporary community service jobs. Drawing on evidence from surveys, public records of employment and earnings, in-depth interviews, and ethnographic observation, Higher Ground tells the story of this ambitious three-year social experiment and evaluates how participants fared relative to a control group. The results were highly encouraging. Poverty rates declined among families that participated in the program. Employment and earnings increased among participants who were not initially working full-time, relative to their counterparts in a control group. For those who had faced just one significant barrier to employment (such as a lack of access to child care or a spotty employment history), these gains lasted years after the program ended. Increased income, combined with New Hope’s subsidies for child care and health care, brought marked improvements to the well-being and development of participants’ children. Enrollment in child care centers increased, and fewer medical needs went unmet. Children performed better in school and exhibited fewer behavioral problems, and gains were particularly dramatic for boys, who are at the greatest risk for poor academic performance and behavioral disorders.

As America takes stock of the successes and shortcomings of the Clinton-era welfare reforms, the authors convincingly demonstrate why New Hope could be a model for state and national policies to assist the working poor. Evidence based and insightfully written, Higher Ground illuminates how policymakers can make work pay for families struggling to escape poverty.

GREG J. DUNCAN is the Edwina S. Tarry Professor of Education and Social Policy at Northwestern University and a faculty fellow at the Institute for Policy Research.

ALETHA C. HUSTON is the Priscilla Pond Flawn Regents Professor of Child Development in the department of human ecology at the University of Texas, Austin and associate director of the Population Research Center.

THOMAS S. WEISNER is professor of anthropology at the University of California, Los Angeles.

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Cover image of the book The Company Doctor
Books

The Company Doctor

Risk, Responsibility, and Corporate Professionalism
Author
Elaine Draper
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6 in. × 9 in. 412 pages
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978-0-87154-290-8
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"Company Doctor is a distressing cautionary tale that should be read by anyone professional or otherwise- employed by a large complex organization. On one hand, it alerts us to the ways in which the fundamental tenets of modern medicine, and by implication of other professions, can, in a corporate environment, mutate to serve employers' overridding interest in controlling workers and maximizing profits. On the other hand, the book also indirectly offers hope: if the social and legal context of professional work is responsible for the breakdown of professional ethical codes, then reform may be possible by changing that context."
-WILLIAM J. SONNENSTUHL, Industrial and Labor Relations Review

"Elaine Draper delivers a timely and probing examination of the conflicting interests of physicians who serve two masters: their patients and their employers. Her interviews reveal that fidelity, privacy, and trust are not just abstract principles, but deeply felt (though imperfectly realized) obligations. Draper's cross-disciplinary background lets her weave in-depth social science with careful legal analysis to provide an arresting picture of a topic-professional conflicts of interest-that has emerged as one of the most troubling issues of our time, not just for doctors but for all professionals ... and their clients."
-ALEXANDER M. CAPRON, University Professor, Henry W. Bruce Professor of Equity, and Professor of Law and Medicine, University of Southern California

"Given that today's world is one of increasing professionalization, but also of increasing corporate/bureaucratic conformity, there is much to be learned from the professional physicians who work for large corporations, or 'company doctors.' Professor Draper has done an impressive job of doing that learning and of sharing the relevant lessons with the rest of us. Her book provides insights not just into the doctors' own perceptions doing so in rich and well-written ways-but also into the deeper power of structural and organizational factors that the doctors often fail to recognize or acknowledge. As a result, the book is valuable not just for what it tells us about this important group of doctors but for what it tells us about the challenges of trust, expertise, and professional responsibility, and about the nature of the increasingly interdependent society we all seem destined to inhabit."
-WILLIAM R. FREUDENBURG, Dehlsen Professor of Environment and Society and Professor of Sociology, Environmental Studies Program, University of California, Santa Barbara

"Professor Draper has provided an in-depth, thoroughly researched and engaging look into a central issue of our times-can physicians maintain medical professionalism as employees of rich and powerful corporations? While this book specifically examines the field of contemporary U.S. occupational medicine in an increasingly corporatized overall American medical system, the book, through the example of this bellwether specialty, really applies to and informs the debates about the entire U.S. health care enterprise. If you are involved in that debate or affected by it-read this book."
-RICHARD A. LIPPIN, M.D., FACOEM, Former Corporate Medical Director, ARCO Chemical Company

To limit the skyrocketing costs of their employees' health insurance, companies such as Dow, Chevron, and IBM, as well as many large HMOs, have increasingly hired physicians to supervise the medical care they provide. As Elaine Draper argues in The Company Doctor, company doctors are bound by two conflicting ideals: serving the medical needs of their patients while protecting the company's bottom line. Draper analyzes the advent of the corporate physician both as an independent phenomenon, and as an index of contemporary culture, reaching startling conclusions about the intersection of corporate culture with professional autonomy.

Drawing on over 100 interviews with company physicians, scientists, and government and labor officials, as well as historical, legal, and statistical sources and medical trade association data, Draper presents an illuminating overview of the social context and meaning of professional work in corporations. Draper finds that while medical journals, speeches, and ethical codes proclaim the independent professional judgment of corporate physicians, the company doctors she interviewed often expressed anguish over the tightrope they must walk between their patients' health and the corporate oversight they face at every turn. Draper dissects the complex position occupied by company doctors to explore broad themes of doctor-patient trust, employee loyalty, privacy issues, and the future direction of medicine. She addresses such controversial topics as drug screening and the difficult position of company doctors when employees sue companies for health hazards in the workplace.

Company doctors are but one example of professionals who have at times ceded their autonomy to corporate management. Physicians provide the prototypical professional case for exploring this phenomenon, due to their traditional independence, extensive training, and high levels of prestige. But Draper expands the scope of the book—tracing parallel developments in the law, science, and technology—to draw insightful conclusions about changing conditions in the professional workplace, as corporate cultures everywhere adapt to the new realities of the global economy. The Company Doctor provides a compelling examination of the corporatization of American medicine with far-reaching implications for professionals in many other fields.

ELAINE DRAPER is a visiting scholar at the Institute for the Study of Social Change, University of California, Berkeley, and assistant professor of sociology at California State University, Los Angeles.

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Cover image of the book Uneven Tides
Books

Uneven Tides

Rising Inequality in America
Editors
Sheldon Danziger
Peter Gottschalk
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$28.95
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6 in. × 9 in. 300 pages
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978-0-87154-227-4
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Inequality has been on the rise in America for more than two decades. This socially divisive trend began in the economic doldrums of the 1970s and continued through the booming 1980s, when surging economic tides clearly failed to lift all ships. Instead, escalating inequality in both individual earnings and family income widened the gulf between rich and poor and led to the much-publicized decline of the middle class. Uneven Tides brings together a distinguished group of economists to confront the crucial questions about this unprecedented rise in inequality. Just how large and pervasive was it? What were its principal causes? And why did it continue in the 1980s, when previous periods of national economic growth have generally reduced inequality?

Reviewing the best current evidence, the essays in Uneven Tides show that rising inequality is a complex phenomenon, the result of a web of circumstances inherent in the nation's current industrial, social, and political situation. Once attributed to the rising supply of inexperienced workers—as baby boomers, new immigrants, and women entered the labor market—the growing inequality in individual earnings is revealed in Uneven Tides to be the direct result of the economy's increasing demand for skilled workers. The authors explore many of the possible causes of this trend, including the employment shift from manufacturing to the service sector, the heightened importance of technology in the workplace, the decline of unionization, and the intensified efforts to compete in a global marketplace. Uneven Tides also examines the equally dramatic growth in the inequality of family income, and reviews the effects of family size, the age and education of household heads, and the transition to both two-earner and single-parent families. Although these demographic shifts played a role, what emerges most clearly is an understanding of the powerful influence of public policy, as increasingly regressive taxes, declining welfare benefits, and a stagnant minimum wage continue to amplify the effects of market forces on income.

With the rise in inequality now much in the headlines, it is clear that our nation's ability to reverse these shifting currents requires deeper understanding of their causes and consequences. Uneven Tides is the first book to get beyond the news stories to a clear analysis of the changing fortunes of America's families. It should be required reading for anyone with a serious interest in the economic underpinnings of the country's social problems.

SHELDON DANZIGER is professor of social work and public policy and faculty associate in population studies at the University of Michigan.

PETER GOTTSCHALK is professor of economics at Boston College, and research affiliate at the Institute for Research on Poverty at the University of Wisconsin.

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Cover image of the book Resilient City
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Resilient City

The Economic Impact of 9/11
Editor
Howard Chernick
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$34.95
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6 in. × 9 in. 352 pages
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978-0-87154-170-3
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The strike against the World Trade Center on September 11, 2001, was a violent blow against the United States and a symbolic attack on capitalism and commerce. It shut down one of the world’s busiest commercial centers for weeks, destroyed or damaged billions of dollars worth of property, and forced many New York City employers to slash their payrolls or move jobs to other areas. The immediate economic effect was substantial, but how badly did 9/11 affect New York City’s economy in the longer term? In Resilient City, Howard Chernick and a team of economic experts examine the city’s economic recovery in the three years following the destruction of the Twin Towers.

Assessing multiple facets of the New York City economy in the years after 9/11, Resilient City discerns many hopeful signs among persistent troubles. Analysis by economist Sanders Korenman indicates that the value of New York–based companies did not fall relative to other firms, indicating that investors still believe that there are business advantages to operating in New York despite higher rates of terrorism insurance and concerns about future attacks. Cordelia Reimers separates the economic effect of 9/11 from the effects of the 2001 recession by comparing employment and wage trends for disadvantaged workers in New York with those in five major U.S. cities. She finds that New Yorkers fared at least as well as people in other cities, suggesting that the decline in earnings and employment for low-income New York workers in 2002 was due more to the recession than to the effects of 9/11. Still, troubles remain for New York City. Howard Chernick considers the substantial fiscal implications of the terrorist attacks on New York City, estimating that the attack cost the city about $3 billion in the first two years alone; a sum that the city now must make up through large tax increases, spending cuts, and substantial additional borrowing, which will inevitably be a burden on future budgets.

The terrorist attacks of September 11 dealt a severe blow to the economy of New York City, but it was far from a knock-out punch. Resilient City shows that New York’s dynamic, flexible economy has absorbed the hardships inflicted by the attacks, and provides a thorough, authoritative assessment of what, so far, has been a strong recovery.


HOWARD CHERNICK is professor of economics at Hunter College of the City University of New York.

CONTRIBUTORS:  Joshua Chang,  Oliver D. Cooke,  Franz Fuerst,  Andrew F. Haughwout,  Edward W. Hill,  Sanders Korenman,  Iryna Lendel,  James A. Parrott,  Cordelia W. Reimers,  Jonathan A. Schwabish. 

A September 11 Initiative Volume

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Cover image of the book Putting Children First
Books

Putting Children First

How Low-Wage Working Mothers Manage Child Care
Author
Ajay Chaudry
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$29.95
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6 in. × 9 in. 368 pages
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978-0-87154-172-7
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Semi-Finalist for the Robert F. Kennedy Memorial Book Award

"Putting Children First is must reading for anyone making decisions that affect low-income mothers as they struggle to balance work and family responsibilities-in fact, for anyone who cares about the future of children. Ajay Chaudry makes crystal clear the pitfalls of making social policy from an altitude of 50,000 feet. Knowing the facts on the ground is the first step to a sensible child-care system. We have a long way to go, but this book is a great step in the right direction."
-PETER B. EDELMAN, Professor of Law, Georgetown University Law Center

"Ajay Chaudry's Putting Children First is the most insightful and poignant study of the child-care problems of poor single mothers in urban areas that I have read. This book should be required reading not only for students of urban poverty, but also for national policy makers of welfare reform who have yet to address many of the unique challenges of single motherhood in low-income urban neighborhoods."
-WILLIAM JULIUS WILSON, Lewis P. and Linda L. Geyser University Professor, Harvard University

"An honest, poignant ethnography, Putting Children First provides an extraordinary window into the child care worries of poorly paid working mothers who find that good care for their children is unaffordable and scarce. Ajay Chaudry reminds us what it costs to drop the best interests of children from our national policy agenda. Sharp, focused, and wise."
-CAROL STACK, Professor of Social and Cultural Studies in Education, University of California, Berkeley

"Ajay Chaudry skillfully takes us into the reality of the child care struggles of low-income working parents, and the picture is both disturbing and illuminating. The findings will almost certainly alter the reader's thinking about the dilemmas mothers and policy makers face and the strategies for doing better. If one cares about welfare reform, or low-income workers, or most importantly the future of our children, this book is important reading."
-DAVID T. ELLWOOD, Dean and Scott M. Black Professor of Political Economy, John F. Kennedy School of Government, Harvard University

In the five years following the passage of federal welfare reform law, the labor force participation of low-income, single mothers with young children climbed by more than 25 percent. With significantly more hours spent outside the home, single working mothers face a serious childcare crunch—how can they provide quality care for their children? In Putting Children First, Ajay Chaudry follows forty-two low-income families in New York City over three years to illuminate the plight of these mothers and the ways in which they respond to the difficult challenge of providing for their children’s material and developmental needs with limited resources.

Using the words of the women themselves, Chaudry tells a startling story. Scarce subsidies, complicated bureaucracies, inflexible work schedules, and limited choices force families to piece together care arrangements that are often unstable, unreliable, inconvenient, and of limited quality. Because their wages are so low, these women are forced to rely on inexpensive caregivers who are often under-qualified to serve the developmental needs of their children. Even when these mothers find good, affordable care, it rarely lasts long because their volatile employment situations throw their needs into constant flux. The average woman in Chaudry’s sample had to find five different primary caregivers in her child’s first four years, while over a quarter of them needed seven or more in that time.

This book lets single, low-income mothers describe the childcare arrangements they desire and the ways that options available to them fail to meet even their most basic needs. As Chaudry tracks these women through erratic childcare spells, he reveals the strategies they employ, the tremendous costs they incur and the anxiety they face when trying to ensure that their children are given proper care.

Honest, powerful, and alarming, Putting Children First gives a fresh perspective on work and family for the disadvantaged. It infuses a human voice into the ongoing debate about the effectiveness of welfare reform, showing the flaws of a social policy based solely on personal responsibility without concurrent societal responsibility, and suggesting a better path for the future.

AJAY CHAUDRY is a writer on social policy issues and a faculty and senior research fellow in urban policy and management at New School University.

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Cover image of the book Women in Academe
Books

Women in Academe

Progress and Prospects
Editor
Mariam K. Chamberlain
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$26.95
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6 in. × 9 in. 448 pages
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978-0-87154-218-2
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The role of women in higher education, as in many other settings, has undergone dramatic changes during the past two decades. This significant period of progress and transition is definitively assessed in the landmark volume, Women in Academe.

Crowded out by returning veterans and pressed by social expectations to marry early and raise children, women in the 1940s and 1950s lost many of the educational gains they had made in previous decades. In the 1960s women began to catch up, and by the 1970s women were taking rapid strides in academic life. As documented in this comprehensive study, the combined impact of the women’s movement and increased legislative attention to issues of equality enabled women to make significant advances as students and, to a lesser extent, in teaching and academic administration. Women in Academe traces the phenomenal growth of women’s studies programs, the notable gains of women in non-traditional fields, the emergence of campus women’s centers and research institutes, and the increasing presence of minority and re-entry women. Also examined are the uncertain future of women’s colleges and the disappointingly slow movement of women into faculty and administrative positions.

This authoritative volume provides more current and extensive data on its subject than any other study now available. Clearly and objectively, it tells an impressive story of progress achieved—and of important work still to be done.

MARIAM K. CHAMBERLAIN is founding president of the National Council for Research on Women.

CONTRIBUTORS: Helen S. Astin,  Jean W. Campbell, Mary Ellen S. Capek,  Maren Lockwood Carden,  Mariam K. Chamberlain,  Carol Frances,  Jane Gould,  Lilli S. Hornig,  Florence Howe,  Marjorie Lightman,  Virginia Davis Nordin,  Patricia Ann Palmieri, Bernice R. Sandler,  Cynthia Secor,  Donna Shavlik,  Margaret C. Simms.

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Cover image of the book Fringe Banking
Books

Fringe Banking

Check-Cashing Outlets, Pawnshops, and the Poor
Author
John P. Caskey
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$26.95
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6 in. × 9 in. 184 pages
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978-0-87154-180-2
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"Cogently argued, fills an important gap in the literature, and is accessible to undergraduates." —Choice

"Dismantles the mythology surrounding pawnshops and check-cashing outlets, and demonstrates that they are no longer on the fringe of our financial system but integral to it."—San Francisco Bay Guardian

In today's world of electronic cash transfers, automated teller machines, and credit cards, the image of the musty, junk-laden pawnshop seems a relic of the past. But it is not. The 1980s witnessed a tremendous boom in pawnbroking. There are now more pawnshops thanever before in U.S. history, and they are found not only in large cities but in towns and suburbs throughout the nation. As John Caskey demonstrates in Fringe Banking, the increased public patronage of both pawnshops and commercial check-cashing outlets signals the growing number of American households now living on a cash-only basis, with no connection to any mainstream credit facilities or banking services.

Fringe Banking is the first comprehensive study of pawnshops and check-cashing outlets, profiling their operations, customers, and recent growth from family-owned shops to such successful outlet chains as Cash American and ACE America's Cash Express. It explains why, despite interest rates and fees substantially higher than those of banks, their use has so dramatically increased. According to Caskey, declining family earnings, changing family structures, a growing immigrant population, and lack of household budgeting skills has greatly reduced the demand for bank deposit services among millions of Americans. In addition, banks responded to 1980s regulatory changes by increasing fees on deposit accounts with small balances and closing branches in many poor urban areas.

These factors combined to leave many low- and moderate-income families without access to checking privileges, credit services, and bank loans. Pawnshops and check-cashing outlets provide such families with essential financial services thay cannot obtain elsewhere. Caskey notes that fringe banks, particularly check-cashing outlets, are also utilized by families who could participate in the formal banking system, but are willing to pay more for convenience and quick access to cash. Caskey argues that, contrary to their historical reputation as predators milking the poor and desperate, pawnshops and check-cashing outlets play a key financial role for disadvantaged groups. Citing the inconsistent and often unenforced state laws currently governing the industry, Fringe Banking challenges policy makers to design regulations that will allow fringe banks to remain profitable without exploiting the customers who depend on them.

JOHN P. CASKEY is associate professor of economics at Swarthmore College.

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Cover image of the book Finding Jobs
Books

Finding Jobs

Work and Welfare Reform
Editors
David Card
Rebecca M. Blank
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$29.95
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6.63 in. × 9.25 in. 560 pages
ISBN
978-0-87154-159-8
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"This book, which is based on solid research by an all-star cast of experts, provides important and timely findings about current welfare issues, some of which are remarkable. The bottom line for the editors of this valuable book is that the country is on the right track, but staying the course will be a challenge in the years ahead."
-Richard P. Nathan, The Rockefeller Institute of Government, SUNY

"This is an indispensable, comprehensive study of the problems and prospects of low-skilled workers, especially welfare recipients who have been entering the labor market in vast numbers. Impressive for the breadth of its research and the depth of its analyses, the book will be a major resource for policymakers, administrators, and researchers-anyone seeking to redesign programs and policies for the working poor."
-Judith M. Gueron, Manpower Demonstration Research Corporation

"In a field replete with puzzles, this collection of new empirical research confirms some past knowledge and it solves some old mysteries. But it deepens other mysteries and contains some striking new data. Finding Jobs reminds us that the most powerful assistance program for low-skilled workers is a strong economy. It removes any remaining doubt about whether wage subsidies, public service employment, and financial incentives in general can raise employment and earnings of low skill workers-they can."
-Henry J. Aaron, The Brookings Institution

Do plummeting welfare caseloads and rising employment prove that welfare reform policies have succeeded, or is this success due primarily to the job explosion created by today's robust economy? With roughly one to two million people expected to leave welfare in the coming decades, uncertainty about their long-term prospects troubles many social scientists. Finding Jobs offers a thorough examination of the low-skill labor market and its capacity to sustain this rising tide of workers, many of whom are single mothers with limited education. Each chapter examines specific trends in the labor market to ask such questions as: How secure are these low-skill jobs, particularly in the event of a recession? What can these workers expect in terms of wage growth and career advancement opportunities? How will a surge in the workforce affect opportunities for those already employed in low-skill jobs?

Finding Jobs offers both good and bad news about work and welfare reform. Although the research presented in this book demonstrates that it is possible to find jobs for people who have traditionally relied on public assistance, it also offers cautionary evidence that today's strong economy may mask enduring underlying problems. Finding Jobs shows that the low-wage labor market is particularly vulnerable to economic downswings and that lower skilled workers enjoy less job stability. Several chapters illustrate why financial incentives, such as the Earned Income Tax Credit (EITC), are as essential to encouraging workforce participation as job search programs. Other chapters show the importance of including provisions for health insurance, and of increasing subsidies for child care to assist the large population of working single mothers affected by welfare reform.

Finding Jobs also examines the potential costs of new welfare restrictions. It looks at how states can improve their flexibility in imposing time limits on families receiving welfare, and calls into question the cutbacks in eligibility for immigrants, who traditionally have relied less on public assistance than their native-born counterparts.

Finding Jobs is an informative and wide-ranging inquiry into the issues raised by welfare reform. Based on comprehensive new data, this volume offers valuable guidance to policymakers looking to design policies that will increase work, raise incomes, and lower poverty in changing economic conditions.

REBECCA M. BLANK is dean of the Gerald R. Ford School of Public Policy and Henry Carter Adams Collegiate Professor of Public Policy at the University of Michigan. She is also research associate of the National Bureau of Economic Research.

DAVID E. CARD is Class of 1950 Professor of Economics and head of the Center for Labor Economics at the University of California, Berkeley. He is also research associate of the National Bureau of Economic Research.

CONTRIBUTORS: Patricia Anderson, Timothy Bartik, Kristin Butcher, Janet Currie, Stacy Dickert-Conlin, David T. Ellwood, Tricia Gladden, Douglas Holtz-Eakin, Harry J. Holzer, Hilary Hoynes, Luojia Hu, Robert J. LaLonde, Phillip B. Levine, Susan E. Mayer, Robert A. Moffitt, LaDonna A. Pavetti, Philip K. Robins, Christopher Taber, Jane Waldfogel, Elisabeth D. Welty, Aaron Yelowitz

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