Financial Security Scorecard: A State-by-State Analysis of Economic Pressures Facing Future Retirees

As Americans increasingly worry about their retirement prospects, states play an important and growing role in retirement security policy. States already manage long-term care programs for the elderly through Medicaid. Concerned about the impact of future elder poverty on state and local budgets and their local economies, a number of states are exploring the creation of low-cost and low-risk retirement savings plans for private sector workers who lack access to pensions or 401(k)s on the job. Some states have developed programs to help older workers find work. This report presents the Financial Security Scorecard, designed to inform state-level stakeholders and policymakers regarding the financial security outlook for future retirees and to help identify potential areas of focus for state-based policy interventions to improve retirement prospects. Specifically, the scorecard ranks each of the 50 states plus the District of Columbia (hereafter referred to as “states”) in three sources of potential economic pressures for future retirees, as measured through eight specific variables. This analysis enables policymakers to understand how their state fares relative to other states in terms of potential economic pressures for future retirees, and which areas of retirement security need the most attention. At the same time, the raw data underlying the scorecard indicate that in some areas, all states have room for improvement regardless of how they rank

A Field Experiment to Test the Labor Market Value of a Credential from a For-Profit Postsecondary School

The attainment of postsecondary credentials holds particular promise in improving economic security for low-income single mothers. However, the type of school attended may matter when determining whether postsecondary credentials will foster positive labor market outcomes and financial stability for former students. This paper describes the pre-test of a field experiment to examine whether the school type listed on a job applicant’s resume has an impact on receiving a call for a job interview, in fields commonly pursued by low-income women. School types tested were for-profit schools and community colleges. Results revealed little difference in outcomes for job seekers with credentials from each school type. However, more reliable results could be obtained by repeating this study in a stronger economy, using job candidates with minimal applicable experience, applying to a greater number of positions, and selecting occupations for which an academic credential is widely seen as a prerequisite for entry. DOI:10.2458/azu_jmmss_v5i1_arcan

Weighing the Benefits and Risks Associated with Proprietary School Attendance for Low-Income Single Mother Students

An apparent paradox is taking place in the market for postsecondary education. Proprietary (for-profit) schools are presenting themselves as particularly well-suited to enable low-income single mother students to pursue a degree or certificate. While this is a positive step towards improved economic security, these schools also place students at an enhanced risk for student loan default, potentially devastating their financial stability. Using in-depth student interviews, analysis of Beginning Postsecondary Students Longitudinal Study data, and a field experiment, this research explores the particular risks and benefits to low-income single mother students associated with the pursuit of a postsecondary credential at a proprietary school. Findings indicate that proprietary schools enable low-income and nontraditional students (especially single mothers and students with few resources) to complete school more quickly than public alternatives. Faster completion rates are most often due to proprietary schools\u27 provision of intensive student assistance and less rigorous coursework. Yet low-income single mother students attending proprietary schools are significantly more likely to default on student loans than their classmates. Conversely, low-income single mothers attending similar programs at public schools are no more likely than their classmates to default on student loans. Policy recommendations stemming from this research are applicable to low-income single mother students and more broadly to low-income and nontraditional students. Recommendations include an investment in the capacity of the community college system to increase competitiveness with proprietary schools and better address the needs of resource-poor nontraditional students, a reevaluation and revision of accreditation standards to ensure comparable quality between school types, and a requirement for increased transparency within the financial aid application process. Further, modifying the Earned Income Tax Credit program to incorporate an educational credit would allow for the direct, efficient provision of needed resources to low-income single parent students. This policy change would foster an enhanced ability for the most resource-poor students to navigate the challenges of postsecondary education without requiring the dedicated assistance that is a trademark of proprietary schools

Financial Security Scorecard: A State-by-State Analysis of Economic Pressures Facing Future Retirees

As Americans increasingly worry about their retirement prospects, states play an important and growing role in retirement security policy. States already manage long-term care programs for the elderly through Medicaid. Concerned about the impact of future elder poverty on state and local budgets and their local economies, a number of states are exploring the creation of low-cost and low-risk retirement savings plans for private sector workers who lack access to pensions or 401(k)s on the job. Some states have developed programs to help older workers find work. This report presents the Financial Security Scorecard, designed to inform state-level stakeholders and policymakers regarding the financial security outlook for future retirees and to help identify potential areas of focus for state-based policy interventions to improve retirement prospects. Specifically, the scorecard ranks each of the 50 states plus the District of Columbia (hereafter referred to as “states”) in three sources of potential economic pressures for future retirees, as measured through eight specific variables. This analysis enables policymakers to understand how their state fares relative to other states in terms of potential economic pressures for future retirees, and which areas of retirement security need the most attention. At the same time, the raw data underlying the scorecard indicate that in some areas, all states have room for improvement regardless of how they rank

What Data on Older Households Tell Us About Wealth Inequality and Entrepreneurship Growth

The data analysis for this report, while focusing on older households, tells an interesting story about the potential link between entrepreneurship and wealth inequality that is relevant for economic policy more broadly. Rising wealth among a subset of higher-income households gave those households the opportunity to pursue entrepreneurial activities that otherwise would not have existed. Older households pursued these activities to generate streams of income that were unrelated to risky business income and because they could use their wealth as collateral. Policymakers interested in promoting increased entrepreneurship among older households—where economic pressures have been very noticeable—could consequently pursue two separate but not mutually exclusive paths: They could find ways to build wealth on a broader base than has been the case in the past, especially by emphasizing asset building among people of color, single women, and younger households, and they could develop ways for older households interested in pursuing entrepreneurship to diversify their incomes