Opportunity, Responsibility and Security: Reducing Poverty and Increasing Economic Mobility Ron Haskins Cabot Family Chair Brookings Institution A Presentation at Economic Opportunities for Families: A leadership Forum for State Legislators June 6, 2017
2 Cross-Partisan hostility: Partisans dislike the other party more 90 80 70 60 50 40 30 20 10 0 Warmth toward OTHER party Carter Reagan Bush I Clinton Bush II Obama Warmth toward OWN party Source: ANES, and Marc Hetherington, Vanderbilt U.
3 Logic of the Report Poverty has declined, but not enough, especially among children Economic mobility is stuck and too low Three underlying correlates of poverty and mobility: family composition, work rates, and educational attainment So, we devote a chapter to trends in poverty, mobility, family composition, work, and education (Chapter 2)
Trends in Poverty & the Status of Economic Mobility
5 Official Poverty Rates for Children in Single-Mother Households, All Children, and the Elderly, 1959-2015 70 Percent in Poverty 60 50 40 30 20 10 59.9 35 27.3 36.5 19.7 8.8 Female- Headed Househol ds with children under 18 All Children Age 65 and Over 0 Year Source: U.S. Census Bureau, Poverty Division, CPS ASEC, Families Tables 3 and 4.
Income Quintile of Children When They Grow Up Relative to Their Parents Income Quintile 6
Trends in Family Composition
Percentage of Births to Unmarried Women by Education Level, 1970-2015 8 80 Percent of Births 70 60 50 40 30 66.05 59.40 43.10 Less than a HS Degree HS Degree Some College 20 19.66 10 7.71 9.97 5.74 1.32 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 College Degree or more Year Source: Authors' Tabulations of data from Centers for Disease Control and Prevention. National Center for Health Statistics. VitalStats.
9 Changes in Women s Family Structure at Age 35, 1970-2010 Percent of Women 100 90 80 70 60 50 40 30 20 10 0 5.7 6.9 9.9 9.2 9.7 7.0 10.2 9.3 15.8 17.4 18.6 14.2 78.1 68.7 15.0 16.3 59.3 57.0 20.5 51.1 1970 1980 1990 2000 2010 Year Married without children Single without children Single with children Married with children Source: Author's calculations from the decennial census (U.S. Bureau of the Census 1970, 1980, 1990, 2000) and the American Community Survey (U.S. Bureau of the Census 2010)
Trends in Work and Wages
11 Employment-to-Population Ratio for Selected Populations, 1980-2016 90 83 80 70 75 74.5 60 65.7 65.1 All men 16-54 Percent 50 40 30 46 44 51.8 Women 16-54 Single never married mothers 16-54 20 Black men 20-24 10 0 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year Source: IPUMS-Current Population Survey; University of Minnesota
12 Cumulative Changes in Real Hourly Wages of Men, by Income Percentile, 1972-2012 70 Cumulative Percent Change Since 1979 60 50 40 30 20 10 0-10 95th 90th 80th 50th 10th -20 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Year Sources: Calculations from EPI calculations of Current Population Survey Outgoing Rotation Group microdata (available at http://stateofworkingamerica.org/data/), CPI-U-RS Index (available at https://www.census.gov/hhes/www/income/data/incpovhlth/2012/cpi-u-rs-index- 2012.pdf), and PCE deflator available from FRED.
Trends in Income for Families with Various Levels of Educational Attainment
14 Median Family Income of Adults Age 30-39 by Education Level, 1964-2014 $140,000 Median Family Income $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $119,714 $89,261 $57,550 $49,642 $32,171 Advanced degree Bachelor's degree Some college High school degree Less than high school $0 1964 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 Source: Census' Annual Social and Economic Supplement to the Current Population Survey. Inflation adjusted using PCE deflator. Note: The CPS changed the phrasing of the educational attainment question in 1992, which accounts for that year's sudden drop among the less-than-high-school group. Year
Summary Trends in family composition, employment, and education are moving in the wrong direction for reducing poverty and increasing economic mobility
Policy Recommendations
17 Local Programs: Four Good Bets Low-Wage Work and Work Supports Family Stability (Birth Control) Skilled Employment Early Childhood Education
18 First, Three Cautions Personal Responsibility Federal Spending & Debt Evidence-Based Policy
19 What Accounts for Success? Source: Author s calculations from the Current Population Survey, Annual Social and Economic Supplements (Table F-10).
20 Percentage of Federal Budget Spent on Major Entitlements 70 60 50 40 30 20 10 0 Federal Budget: Entitlement Spending Lockout 46 56 2012 2022 2037 Year 62 Note: Major entitlements are Medicaid, Medicare, and Social Security. Source: Congressional Budget Office.
Kids Are Getting the Short End of the Stick; It Will Get Worse 21
Evidence-Based Policy: Productive Investments in Children Preschool education Home visiting Teen pregnancy prevention Career academies K-12 education Second chance programs for teens Community and family-based programs for delinquents Community college interventions Small schools of choice 22
23 Local Programs: Four Good Bets Low-Wage Work and Work Supports Family Stability (Family Planning) Skilled Employment Early Childhood Education
24 Possible Solution #1: The Most Successful Way to Reduce Poverty: Combine Work and Work Supports 60% 50% 48% Poverty Rate 40% 30% 20% 10% Earned Income Only Plus Cash benefits outside the tax system (UI, child support, SSI, AFDC, TANF, GA) i.e. "the official poverty rate" Plus Food Stamps/SNAP Plus EITC & ACTC, less FICA & federal & state income taxes 38% 34% 29% 24% Plus Stimulus/recovery payments & income from other houshold members 0% 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Year Note: Abbreviations are as follows: Unemployment Insurance (UI), Supplemental Security Income (SSI), Aid to Families with Dependent Children (AFDC), Temporary Assistance for Needy Families (TANF), Government Assistance (GA), Supplemental Nutrition Assistance Program (SNAP), Earned Income Tax Credit (EITC), Additional Child Tax Credit (ACTC), and Federal Insurance Contributions Act (FICA). Source: Thomas Gabe, Congressional Research Service, Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013.
Possible Solution #2: Family Stability (Family Planning) 25
26 Drifting into Parenthood is Common Source: Zolna, Mia, and Laura Duberstein Lindberg. Unintended pregnancy: Incidence and outcomes among young adult unmarried women in the United States, 2001 and 2008. Alan Guttmacher Institute, 2012.
27 Potential Benefits of Reducing Unplanned Pregnancies Reduced poverty rates Lower abortion rates Better spacing of babies Increased likelihood of prenatal care Less postpartum depression Reduced partner separation rates More education for mothers Cost savings for government Source: National Campaign to Prevent Teen and Unplanned Pregnancy, 2014.
28 Unwed Childbearing by Age, 1980-2015 90 80 Birth Rate Per 1,000 Women 70 60 50 40 30 34 27.6 66.9 Age 25-29 Age 15-19 20 20.2 10 0 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 Source: National Vital Statistics Reports, Vol. 66, No. 1.
29 St Louis: The CHOICE Project Women using LARCs or shots had lowest unintended pregnancy rates after 1, 2, and 3 years Source: http://www.choiceproject.wustl.edu/~/media/files/choiceproject/study-findings-20120917.ashx.
30 Possible Solution #3: Skilled Employment 4-year colleges (college prep programs) 2-year colleges Apprenticeships Certificates & Licenses Career Academies Goal: Prepare kids for skilled jobs available in the local economy
31 Programs: Possible Solution #4: Early Childhood Education Home Visiting Head Start State pre-k Child Care Spending about $25 billion per year (federal & state) Quality Is the Key State and Local Governments Have to Step Up