Reducing Poverty in California…Permanently

If California were to seriously commit to equalizing opportunity and reducing poverty, how might that commitment best be realized? This is of course a hypothetical question, as there is no evidence that California is poised to make such a serious commitment, nor have many other states gone much beyond the usual lip-service proclamations. There are many reasons for California’s complacency, but an important one is that most people think that poverty is intractable and that viable solutions to it simply don’t exist. When Californians know what needs to be done, they tend to go forward and get it done. When, for example, the state’s roads are in disrepair, there are rarely paralyzing debates about exactly how to go about fixing them; instead we proceed with the needed repairs as soon as the funds to do so are appropriated. The same type of sure and certain prescription might appear to be unavailable when it comes to reducing poverty. It is hard not to be overwhelmed by the cacophony of voices yielding a thick stream of narrow-gauge interventions, new evaluations, and piecemeal proposals.1 Although the research literature on poverty is indeed large and may seem confusing, recent advances have in fact been so fundamental that it is now possible to develop a science-based response to poverty. In the past, the causes of poverty were not well understood, and major interventions, such as the War on Poverty, had to be built more on hunch than science. It is an altogether different matter now. The causes of poverty are well established, and the effects of many possible policy responses to poverty are likewise well established. The simple purpose of this essay is to assemble these advances into a coherent plan that would, if implemented, reduce poverty in California substantially

Why is there so much Poverty in California? The Causes of California’s Sky-High Poverty and the Evidence Behind the Equal Opportunity Plan for Reducing It

The purpose of this report is to describe the current state of poverty in California, to discuss concrete steps that could be taken to reduce poverty in California, and to present the best available evidence on the likely effects of those steps. We take on an important but infrequently-posed question: If California were to seriously commit to reducing poverty, how might that commitment best be realized? This is of course a hypothetical question, as there is no evidence that California is poised to make such a serious commitment, nor have many other states gone much beyond the usual lip service proclamations. It is nonetheless especially striking that California, the highest-poverty state in the country, has not rushed in to rectify the matter.1 There are many reasons for this seeming complacency, but an especially important one is that most people think that poverty is intractable and that viable solutions to it simply don’t exist. When Californians know what needs to be done, they tend to go forward and get it done. When, for example, the state’s roads are in disrepair, there are rarely paralyzing debates about exactly how to go about fixing them; and instead we proceed with the needed repairs as soon as the funds to do so are appropriated. The same type of sure and certain prescription might appear to be unavailable when it comes to fixing poverty. It is hard not to be overwhelmed by the cacaphony of voices yielding a thick stream of narrow-gauge interventions, new evaluations, and piecemeal proposals.

The Dynamics of Participation in Subsidized Housing Programs in the U.S.

Over the course of its 80-year history, the main goal of the subsidized housing program in the United States has been to help poor households live in physically sound affordable housing. Over and above serving the immediate shelter needs of low-income households, an important but not always explicit justification for the program has been the belief that upgrading the housing conditions of the poor will yield broader benefits of social and economic advancement not only to the occupants of subsidized apartments but also to the neighborhoods around them. The various forms that the subsidized housing program has taken over the years have been closely linked both to attitudes towards the proper responses to address poverty and the role that governments can play in the operation of the housing market. My dissertation examines the experiences of residents of subsidized housing before, during, and after their involvement with the program with particular attention to the understanding of poverty and social stratification.Specifically, Chapter 1 investigates the pathways that residents take to enter subsidized housing and exit subsidized housing. I use life table analysis and discrete time hazard modeling with data from two nationally representative panel surveys, the Survey of Income and Program Participation (SIPP), spanning the period 1990-2008, and the Panel Study of Income Dynamics (PSID), spanning the period 1969-2007. I find that the median time to entry into subsidized housing is 30 years, reflecting the fact that most individuals who are eligible for the subsidy never receive it. On the other hand, the median time to exit from subsidized housing ranges from 5 years for public housing to 3 or 4 years for other types of subsidized housing. The process of entering subsidized housing in a lot of ways mirrors the process of exiting subsidized housing. African Americans are the ones who are most likely to find themselves in subsidized housing and are also the ones most likely to stay in subsidized housing longer. While the amount of household earnings and welfare benefits does not have an overwhelming association with either entering or exiting subsidized housing, the local employment and housing conditions do have an effect on the process, with individuals living in places with higher unemployment rates and higher rents more likely to enter subsidized housing and also less likely to exit subsidized housing. My findings also confirm previous research showing that the residents of public housing programs live in some of the most distressed neighborhoods and any exit from the program improves their neighborhood conditions. My findings also show that the voucher program and the private subsidized housing program do not have the intended effect of providing residents with better neighborhood environments.Chapter 2 examines an understudied aspect of the relationship between government subsidies and household structure, namely how entering subsidized housing, staying in subsidized housing and exiting into the private housing market interacts with the choices that subsidy recipients make regarding the kind of households they live in. I use a multi-state life table, incorporating the monthly longitudinal housing subsidy and household composition histories of all individuals in the SIPP from 1990 through 2008. My results show that entries into subsidized housing are accompanied by changes in household arrangements that reduce the number of adults in households. Moreover, there is a distinct life course pattern to the entry into subsidized housing with younger individuals transitioning into subsidized housing as single parents with children and older individuals transitioning as single householders. On the other hand, individuals tend to exit subsidized housing in the same household arrangement as they were in subsidized housing, indicating that moves out of subsidized housing may be associated with other changing circumstances such as greater economic stability rather than changes in household composition. I find no strong evidence that marriages break up once individuals are in subsidized housing, but I do find that a single mother with a child is much more likely to exit subsidized housing altogether than to get married while in subsidized housing. My multi-state life table allows me to simulate what would happen to the composition of households in subsidized housing given a contraction or expansion of the subsidized housing program. My simulations suggest that the biggest changes in the subsidized program would occur with changes in the rates of entry into subsidized housing rather than the rates of exit from subsidized housing. Increasing the rates of entry into subsidized housing does not have the same multiplicative effect across different types of household arrangements. In fact, a policy that allows individuals across all ages to transition more frequently into subsidized housing would shift the programs towards housing single-person elderly households for longer periods of time compared to younger single parent or married couple households.Chapter 3 is a detailed examination of how children who grew up in subsidized housing make the transition to adulthood. Specifically, I estimate the effect of subsidized housing on the timing of first marriage, first birth, and the establishment of an independent household. I also assess whether living in subsidized housing makes children less likely to complete high school, continue their education after high school, and complete college, and more likely to live in subsidized housing after age 18. I use propensity score matching to statistically match children who grew up in subsidized housing to ones who are similar on observable characteristics but did not live in subsidized housing. I use these "treatment" and "control" groups to derive race- and gender-specific estimates of the effect of subsidized housing on the transition to adulthood. I also assess whether these effects vary by the stage in childhood when the stay in subsidized housing occurred, i.e. early childhood, middle childhood, or adolescence. Using the PSID, I find that subsidized housing accelerates the first birth and the establishment of an independent household only for black girls who were in subsidized housing between the ages of 6 and 11. Moreover, white children who grew up in subsidized housing have consistently worse educational outcomes compared to similar white children who did not grow up in subsidized housing. The most consistent finding in this chapter across all racial and age groups is that children who grew up in subsidized housing during any stage in childhood are also much more likely to reenter subsidized housing as heads of households