Does Family Structure Really Matter When It Comes to Poverty?

Image result for single mother

Not according to a recent op-ed in The New York Times. The authors–sociologists all–argue based on findings from their new study

that reducing single motherhood would not substantially reduce poverty. Single-mother families are a surprisingly small share of our population. Among households headed by working-age adults, 8.8 percent of people lived in single-mother households in 2013 — the most recent year we were able to analyze. The share of people in single-mother households actually declined from 10.5 percent in 1980 and has increased only modestly since 18=970, when it was 7.4 percent. True, compared with other rich democracies, America does have a relatively high portion of families headed by single mothers. Nevertheless, we still fall below Ireland and Britain and are quite similar to Australia and Iceland.

Because fewer people are in single-mother families than you’d think, even large reductions in single motherhood would not substantially reduce poverty. 

However, sociologist W. Bradford Wilcox takes issue with the way the NYT piece presents the evidence. He explains,

Nobody…is claiming that reducing the number of single-mother households will lead to lower poverty rates among elderly or childless men and women. The concern among poverty scholars has always been that single motherhood leads to higher rates of child poverty. And there is no denying the close connection between single parenthood and child poverty in America.

To begin with, children living in single-mother families are about five times as likely to be poor, compared with children living in married, two-parent families. This is clear in a recent analysis of trends in the official poverty rate from our colleague Ron Haskins at the Brookings Institution.

Moreover, research done by one of us, Isabel Sawhill, indicates that if the share of children in single-parent families had remained steady at the 1970 level, then the current child-poverty rate would be cut by about one-fifth, even after adjusting for the fact that single mother have different characteristics from married mothers. In other words, dramatic increases in single parenthood — from about 12 percent of children in 1970 to about 27 percent now — more recently have played an important role in fueling child-poverty rates.

Single parenthood is not the factor driving child poverty in America, but it isa factor.

What about Europe?

Well, it turns out that even in Europe children are more likely to be poor if they are living in a family headed by a single parent. Research done by social scientists Janet Gornick and Markus Jäntti indicates that children being raised by a single parent are about three times as likely to be living in a poor family as children being raised by two parents, even after accounting for generous welfare policies in Europe.

In fact, this is true even in Scandinavia. Relative to children in two-parent families, children in single-mother homes are about three times as likely to be poor in Denmark and Sweden, more than four times as likely to be poor in Norway, and nearly five times as likely to be poor in Finland, after taking into account their welfare policies.

Now, it’s true that the levels of child poverty in Scandinavia are markedly lower than those in the United States — indeed, about 75 percent lower because of their social policies. And it’s also true that the unique poverty risk associated with single parenthood generally goes away when you control for other factors, such as age, education, and employment, as Brady and his colleagues have done. What that misses is that mother-headed families are more likely to be formed as the result of an unplanned birth outside of marriage or a committed relationship, and that these unexpected births tend to occur at young ages, to interrupt a young woman’s education, and to make it less likely that she will ever marry or form a stable partnership and have the second income that such a partnership makes possible.

In other words, even today, one reason that two parents are generally better than one parent, economically speaking, is that having two parents in the home dramatically increases the odds not only that at least one parent is working full-time but also that there are two parents working on behalf of the children. And this is true even in Europe.

What’s more,

The social science tells us that children raised by single parents are significantly more likely to have children young, to drop out of high school, and to work less as young adults. Not surprisingly, the children of single-parent families are more likely to end up poor as young adults.

…Indeed, new research from economists Melissa Kearney and Phillip Levine indicates that young adults are at least ten percentage points less likely to be poor at age 25 if they were born to married parents, as opposed to an unmarried mother. These effects are especially strong for children born to mothers in the middle of the educational and age distribution — that is, for “children of mothers with high school degrees and mothers in their early/mid-20s.” In other words, in America at least, the long arm of single parenthood seems to extend into adulthood, increasing the likelihood that children of single parents will be poor as adults, compared with adults who were raised in intact, two-parent families.

Wilcox concludes, “It’s useful to point out that family structure is not destiny. But the evidence suggests it remains important and shouldn’t be dismissed as one important factor affecting children in particular.”


Warren Buffet: What’s Better Than Raising the Minimum Wage?

892 - Minimum Wage WSJ

If you read Difficult Run with any frequency, you know that we really, really don’t like the minimum wage. There are lots of reasons for this, but one of the biggest is that there’s a better solution to the problem that the minimum wage is supposed to tackle, which is helping the working poor. It’s better because it gets more money into the hands of those who need it without either (1) eradicating low-income jobs (which are better than no jobs) or (2) uselessly funneling extra money into the hands of middle class teenagers working summer jobs (or whatever).

So, what is this superior alternative? Let’s ask Warren Buffet and the Wall Street Journal:

I may wish to have all jobs pay at least $15 an hour. But that minimum would almost certainly reduce employment in a major way, crushing many workers possessing only basic skills. Smaller increases, though obviously welcome, will still leave many hardworking Americans mired in poverty.

The better answer is a major and carefully crafted expansion of the Earned Income Tax Credit (EITC), which currently goes to millions of low-income workers. Payments to eligible workers diminish as their earnings increase. But there is no disincentive effect: A gain in wages always produces a gain in overall income. The process is simple: You file a tax return, and the government sends you a check.

In essence, the EITC rewards work and provides an incentive for workers to improve their skills. Equally important, it does not distort market forces, thereby maximizing employment.

Given the existence of the EITC, it is inexcusable for anyone who genuinely cares about this issue to keep shouting for an increase in the minimum wage.

In a perfect world if I got to restructure our whole tax / welfare system from scratch I might make other choices than an EITC (like maybe an Universal Base Income), but in the world we live today the EITC is a smart, simple program that is already in place and just needs to be augmented in order to give targeted, sound support to the working power. In this case the smart thing and the right thing are the same: so let’s increase the EITC.

What To Do About Our Hereditary Meritocracy

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In theory, meritocracies are fair. In practice, not so much. As The Economist observes:

Today’s elite is a long way from the rotten lot of West Egg. Compared to those of days past it is by and large more talented, better schooled, harder working (and more fabulously remunerated) and more diligent in its parental duties. It is not a place where one easily gets by on birth or connections alone. At the same time it is widely seen as increasingly hard to get into.

The rest of the article tries to explain why this is so, citing assortative mating as one big reason. Perhaps because of the same social attitudes that have led more women into the workplace and to getting college degrees, “between 1960 and 2005 the share of men with university degrees who married women with university degrees nearly doubled, from 25% to 48%, and the change shows no sign of going into reverse.” These pairs are much more likely to be correlated in terms of intelligence and other genetic factors that help people be successful, for one thing. But even if you set aside the genetic component, successful people are likely to raise successful children because they value success and they obviously understand what it takes to be successful. So the more you have assortative mating, the more a meritocracy ends up looking a lot like an aristocracy after all.

So… what do we do about? The Economist article has nothing to suggest.

But, writing nearly three years ago, David Brooks did. In Why Our Elites Stink he argues, similarly to The Economist that “today’s meritocratic elites achieve and preserve their status not mainly by being corrupt but mainly by being ambitious and disciplined.” Although wealth is obviously a factor, he argues that “the real advantages are much deeper and more honest.” So, are meritocracies just fundamentally flawed? Brooks doesn’t think so:

The corruption that has now crept into the world of finance and the other professions is not endemic to meritocracy but to the specific culture of our meritocracy. The problem is that today’s meritocratic elites cannot admit to themselves that they are elites.

Brooks’ argument is definitely not a popular for a lot of reasons. First, he doesn’t want to overthrow the meritocracy. He wants to work with it. I don’t think that this is because he likes it. I think it’s because he has that conservative tragic vision of the human condition: that life is fundamentally unfair and the only way to combat that unfairness is to recognize it. Some people are born smarter, stronger, and better looking than others. That will always be true. So life isn’t fair. There will always be elites. If the elites know they are elites, they can actually respond to that in appropriate ways (e.g. by being more service-oriented). But if we deny the fundamental unfairness of life, then we’re saying that people who have all the advantages don’t have to take any particular special care to help others.

The best of the WASP elites had a stewardship mentality, that they were temporary caretakers of institutions that would span generations. They cruelly ostracized people who did not live up to their codes of gentlemanly conduct and scrupulosity. They were insular and struggled with intimacy, but they did believe in restraint, reticence and service.

Today’s elite is more talented and open but lacks a self-conscious leadership code. The language of meritocracy (how to succeed) has eclipsed the language of morality (how to be virtuous). Wall Street firms, for example, now hire on the basis of youth and brains, not experience and character. Most of their problems can be traced to this.

If you read the e-mails from the Libor scandal you get the same sensation you get from reading the e-mails in so many recent scandals: these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness of their larger social role.

Although it wasn’t a focus of his, I think another major element to this is the problem of America’s obsession with individualism. We have gone overboard in rejecting our collective, social nature. That is why modern hotshots have no sense of being “guardians for an institution the world depends on.”

Life will never be fair. There will always be elites. Saying that terrifies people, because they immediately think of racial or cultural or religious bigotry. But we can’t be so paralyzed by fear that we fail to heed reality. Also, the fear are largely unfounded, as The Economist observes that elites “included people with skin of every shade but rarely anyone with parents who worked blue-collar jobs.” So here we are, in a world that is unfair where elite people will pass down their elite traits to their elite kids. We can either try to redistribute everything (which will kill all incentives and lead to total social ruin) or we can instill an ethos of service and humility in elites. It’s not a perfect solution, but it seems like the best one.

Further reading, if you’re interested in more about this problem: Forget the Rich. The Upper Middle Class Is Ruining America

Can a $7 USB Stick Provide Computer Access to Billions?

2014-05-12 USB Stick

I like this idea, but it doesn’t go far enough.

The concept is to take a customized version of Google’s Android operating system and install it on a USB drive. Then give the drives to poor folk, starting with students and staff at schools in Nairobi slums. On its own, the USB drive isn’t very useful, but if you plug it into a computer (any computer, including old computers and computers with broken hard drives) you get a customized, easy-to-use PC. In addition to ease of use and the ability to run on just about any hardware you can find, the device will store all your info on itself, so you can plug it into a different computer next time and all your files and settings will still be there.

So you get lower hardware requirements, simplicity of use, and portability of data. Not bad!

But, as long as we’re talking about deployment in the developing world and using Android’s OS, why not go a little farther. Instead of running on a USB stick, you could put the data on a micro SD card that can be inserted into a cell phone. Then you’d expand the program to include computers and cell phones. Given that lots of folks in the developing world interact with the Internet primarily through cell phones rather than through laptops or PCs, this seems like it would be a bigger step forward. Honestly, a technology did that would be something that could sort of unify the way the developed and developing world interact with technology and each other. I’d love to have a kind of seamless computing experience that followed me from light computer use on my phone to serious number-crunching on a dedicated work station.

The Humanity of Markets


This is an older Wall Street Journal article (from October 2010), but it’s one of those great articles that is at once intrinsically interesting and also really offers a glimpse into how us anti-social free-marketeers see the world: Why Some Islanders Build Better Crab Traps. The research is pretty simple: scientists found a way to quantify the complexity of crab traps made by various Pacific tribes, and then they compared complexity of traps to population size.

What they found was that the bigger the population, the more varied and more complex the tool kit was. Hawaii, with 275,000 people at the time of Western contact, had seven times the number and twice the complexity of fishing tools as tiny Malekula, with 1,100 people.

But it’s not just the size of the population on the island group that matters, but the size of the population it was in contact with. Some small populations with lots of long-distance trading contacts had disproportionately sophisticated tool kits, whereas some large but isolated populations had simple tool kits. The well-connected Micronesian island group of Yap had 43 tools, with a mean of five techno-units per tool, while the remote Santa Cruz group in the Solomon Islands, despite having almost as large a population, had just 24 tools and four techno-units.

This is what makes markets great: it’s a way of pulling together more people to cooperate, exchange information, and have a better life for everyone. Markets are, by their nature, impersonal but by that token so are penicillin and electricity. What matters in all three cases is the good they do for all of us.

Couple of minor corollaries: every now and then I’ll hear a serious academic talk about how things aren’t really better in the modern world. Like Jared Diamond who, apparently in all seriousness, decried agriculture as The Worst Mistake in the History of the Human Race. These people are idiots. I suppose if an academic sang the praises of subsistence living and then actually left the modern world to adopt that lifestyle I might take them seriously. Or at least think that they weren’t a raving hypocrite. Until such time: the fact that rich and famous academics aren’t willing to trade medicine, literacy, and travel for the pleasures of 20-hour work week with the Hadza nomads in Tanznia suggests that they are either trolling or insane when they write such articles.

Which might sound like some kind of cultural smugness (aren’t we so much better than “primitive” tribes) if it weren’t for the second corollary:

Archeologists suggest that the ephemeral appearances of fancy tool kits in parts of southern Africa as far back as 80,000 years ago does not indicate sudden outbreaks of intelligence, forethought, language, imagination or anything else within the skull, but simply has a demographic cause: more people, more skills.

In other words: I have no basis whatsoever for feeling that I am in any way personally superior to a human who lived 80,000 years go or to someone from a less-technologically sophisticated civilization today. People are just people. The difference isn’t who we are, it’s where we live. The convenience of modern society doesn’t reflect any superior intellectual or moral sophistication on our part, but is just a natural result of having so many people all contribute to a shared social project.

The proper attitude is not arrogance for what we have, but rather humility for what we’ve been given.

Economist Jeff Smith Won’t Sign Minimum Wage Petition

I’ve written about my criticisms of minimum wage a couple of times already. (Walker has weighed in as well.) Here’s a good article, posted by Michigan economist Miles Kimball but quoting fellow professor Jeff Smith, on reasons why Jeff Smith refuses to sign a petition supporting a raise in the minimum wage. His concerns are:

1. It is poorly targeted relative to alternative policies such as the Earned Income Tax Credit (EITC). And, yes, I am familiar with the argument that the minimum wage and the EITC are complements; what is thin on the ground, so far as I am aware, is evidence of the empirical importance of this argument.

2. As pointed out recently by Greg Mankiw, it distributes the costs of the increased minimum wage in a less attractive way than alternative policies such as the EITC, which implicitly come out of general tax revenue.

3. Most importantly, raising the minimum wage fails to address the underlying issue, which is that many workers do not bring very much in the way of skills to the labor market. Rather than having a discussion about raising the minimum wage, we should be having a discussion about how to decrease the number of minimum wage workers by increasing skills at the low-skill end of the labor market. This would, of course, mean challenging important interest groups. It is also a bigger challenge more broadly because it is less obvious how to do it. But that is the discussion we should be having because that is the one that will really help the poor in the long run, in contrast to a policy that feels good in the short run but only speeds the pace of capital-labor substitution in the long run.

None of these arguments are novel, and I’ve cited all of them in the past, but they are worth repeating. Minimum wage: the best you can say is that it’s a really inept and obsolete policy.