 I'm Mel Stephens. It's not Stephens, it's Stephens. I pointed out because my name has been butchered so often and then prior to this I was asking Maria how to pronounce her last name, and she said I could just call her Maria. Maybe everyone will be on a first name basis. It's not on? Is it on? It's not close enough? All right. Well, you just missed out on $20 worth of humor there. Apologies. So any event we have a great session for you We have great to have so many people back to Ann Arbor just quickly. I was here at the University of Michigan myself as a graduate student. I was then at Carnegie Mellon for a while before I came back to Ann Arbor. I had a colleague there, George Lowsley, who worked on this project which is they tracked all the student visits to Carnegie Mellon's campus and they figured out sort of the end of the story is that they figured out the students that came and visited campus on the really terrible weather days ended up not coming to CMU and so I could imagine how terrible it would have been to have all of you come today for your first visit because we would lose such a resource the University of Michigan. But any event, I like to think the cold weather kept me in studying as opposed to out and about. But anyway, we have a great panel. I will turn it over to Maria to begin. Let's see. I'd love to give a talk. If I give Bonnie's slides, it will not be a good thing. I won't sound nearly as That's okay. I think I know what to do from here. Awesome. So good morning. I'm very happy to be here. My name for the record is Maria Kanchan, but don't it doesn't look at all like what it says up there. It's particularly great to be here because I have lots of memories of this building and the two most salient one is sort of traumatic and one is very happy the First one is I spent the better part of two years in the reading rooms downstairs studying for the prelims in economics That is not my fondest memory But I got there's a few economics graduate students here who can share that memory and then about five years ago I had the privilege to help organize a conference for Sheldon Danziger who is near and dear to many of the people who are here and Has had just an extraordinary impact in terms of not only his own scholarship, but also his mentoring and I still count him as one of my as my best and greatest mentor and cheerleader and The work that I'm going to do today is very consistent with the work that I did with him way back when And also with the work that I got to I learned a lot from David Lam and other people who are here So it's really terrific to be back So I'm going to talk a little bit about family change and I First I'm going to start by trying to commit since not everybody here is a demographer Commends people that when we think about families poverty and inequality that things like marriage and living situations are really important So here's just two factoids to kind of set the face There are over a thousand federal laws that make benefits rights and privileges Contingent on marital status. So we had some references to marriage marriage equality in the last session And sometimes people say why do we even have to think about that? This is like private the government shouldn't be involved That's actually not an option Even if you wanted we're very involved lots and lots of things depend on marital status So that's one piece the other thing is the world is different at least Correlated with marriage status we can have a conversation about whether it's a causal thing and one nice Example of that is that children that live with us unmarried mom are about five times as likely to be poor as children Who live in married couples? So we clearly need to pay attention to this if we care about poverty and inequality one of the things that makes this kind of an interesting and challenging place Topic for research and policy is that families are much more dynamic than is generally recognized And I'm just going to spend a few minutes that I have today Talking about the way in which that is true and when I say dynamic I want to think about kind of two different things one is one family or Let's pick the kid in that family or the mom in that family over the life course Lots of changes. Okay, so I might be married today and might not be married at some later point The other thing is the cohorts of families so families in the 1960s versus families in the 1980s versus families in 2000 So kind of families in general at different points in periods in history both of those We have a lot of dying a lot of change going on So I'm going to start one of the things they didn't teach me when I was here with how to draw So this is when I when I do graphics. This is my graphic of a simple family And a simple family has a dad and a mom and two kids in common. Okay, and so Often when we think about families and family policy We have this picture in our head And we also had a discussion about frameworks and pictures for policy and even for research a lot of What guides us are these implicit assumptions that we have so often when we think about families Now people have different ideas when they think about low-income families and we can have a discussion about that But here's our simple family. So if you look at the simple family one thing that might change over time is that that simple family might get divorced and If that happened you have to think about a number of questions about what would happen and one question you might ask is where do children live after their parents divorce and typically what we thought of and what was the Empirical reality was that children lived with their moms when they divorced and maybe they visited with their dads and their dads paid child support Now there's a bunch of reasons why that might have changed Married moms are much more likely to be working So it used to be part of the reason that we expected kids to live with their moms as their mom was their primary caretaker and Moms weren't in the labor market and that's really changed. So from 30 percent To 64 percent in a fairly short period of time of moms of young children in the labor market Another thing is that dads are much more likely to be taking time with their kids And I guess I won't I won't tell the story about but Mel and I were talking about some of his family care Responsibilities during the break. I won't embarrass his kids by by going into the details But he gets woken up at night to take care of the kids instead of his wife But so yeah, exactly. That's what I said to Mel I told him it was an act of resistance to do this and to tell his class about it So I will make the point that while both of these things are true Men are still more likely to be working than women and moms still spend a lot more time with their kids than dads on average So we're moving in towards equality, but we're not there at the same time We really have had changes in social norms around this So it used to be kind of the concept when there was divorce is this concept of tender years So kids needed to be with their moms especially if their moms were young their kids needed to be with their moms Especially if the kids were young then we move to this idea of the best interest of the child And we now are in a policy space where there is in many places many jurisdictions an explicit Preference for shared parenting. So for example in Wisconsin where I do a lot of my work The statute says unless they can demonstrate that it will be harmful to the child physically or emotionally They need to allow for shared parenting for the child to spend significant time with both the mom and the dad following divorce and Policy has changed in that way too. So policies around child support in 1970 there were just nine states that had child support guidelines that allowed for shared that kind of said what would happen if Parent shared if parenting were shared But virtually all states have those guidelines now. So what does it look empirically? What is the change the changes are really dramatic? So here is some information and I got to say this is for the state of Wisconsin But I will also say this is the only Jurisdiction for which we can do this analysis and I wish or Garfinkel were here because the early years of these data are Were collected in a project that herbs started which Dan Meyer and I are now PIs for many years later And what this picture shows you? the pink is mom's soul custody and Since it's hard to read even on my screen 1989 is the first year about three quarters of children after divorce the arrangement was for them to be solely in the physical custody of their mom and In 2010 the last year for whom which we have data. It was 42% that is an enormous change in a very short by our standard period of time from it being Clearly normative for kids to just be with their dads to that being kind of a 40% and the green is Shared custody where the kids are spending The dark green as 5050 with mom and dad and the light green is at least 25 more than 25% with each parent So a huge change that little bit of blue is father soul custody So that remains a pretty rare thing, but shared custody is really the dominant arrangement for divorce Now since one of our Key issues here is inequality. I want to show you that this is really different for lower and higher income families So the blue line is for families with a joint income between mom and dad under 40,000 The green line is for over 90,000 and so two things the slope is pretty similar Okay, so an increase in shared custody over time for both of these groups, but really really different levels Okay, two-thirds of higher income and 90,000 is not super high income, but higher income families have shared custody And less than a third or about a third for families of more modest means and I think one of the things we have to think about is if the courts if Statute says children have a right to time with both parents So you lose economies of scale You lose a whole bunch of things when you have to maintain two households that have room for kids and things like that If kids have a right to time with both parents, what does that mean for lower income families who may not have the resources? What does that mean for things like housing policy and whether we allow part-time parents to have access to public housing? There's a whole set of policy things But if we start if it is if it has become normative for children to have time with both parents when their parents aren't in a Couple and what does that mean that we owe to lower-income children in terms of giving them access to that? Okay, so now I talked about simple families I want to spend the second part of my time talking about complicated families So here's my picture of a complex family In this case, we've got a mom who has two kids and one of those kids Has one father and one of those kids has the other father and I'm gonna focus on the older kid That child one way to think about them is that they have one co-resident half sibling Okay, so in other words, they live with a sibling who has the same mom, but a different dad And I'm gonna show you a more complex family same thing going on here, but there's also That child number one that father of that child number one also has had a child with another mom Okay, so in this case that the focal child for what I'm gonna show you in a minute has two half siblings one Co-residing that's their half sibling on their mom's side and another who doesn't live with them because it's a half sibling on their dad's side Now, you know my stick figures are no doubt beautiful to look at but the question and really whether they're interesting is how Common are these complicated families? So to look at that Dan Meyer and I and our colleague Steve Cook used Administrative data records from the state again of Wisconsin to look at how common this was and what we started with was a sample of Moms who'd had their first child when they weren't married. Okay, so first non-marital child About 40% of all children born in the United States are born to unmarried moms. So this is not a tiny population So here's my picture. This is not following different families over time Okay, so I'm not doing cohorts here This is following one child and just to explain that picture if you look at the far left where it says at birth At birth about 80% of these children these first born children had no siblings Because I picked them to be the first born of their moms so they could not have a sibling on their mom's side That's my sample definition about 20% of them already had siblings because their father had had children with another mother Okay, now go all the way out to age 15 The story would be more or less the same at age 10 most you see most of the changes in the first five years by age 15 About 30% of them in that light blue had half siblings on both sides That is to say 30% of them were in that more complicated situation where they had their mom had had children with other fathers and their father had had children with other mothers and Really only 40% of them or 30% had only full siblings or no siblings So very few of them were in simple families So and this is only children who end up Registered in the administrative data that we have and we know from some survey data that we've done on the same Population that there are some kids here that we are missing in particular We're missing any marital children where that marriage is still intact and there's not a child support order So this is an undercount of complexity So if I tell you that 40% of children are born to unmarried moms And I tell you that about three quarters of those moms those kids will have complicated families This is not some special case that we don't have to pay attention to this is something that we really need to grapple with in Child support policy and housing policy and education. This is in tax when we think about the EITC This is really a key phenomenon. So now I told you this is following one child for a long time So this went back to 1997 because I had to go far back in order to be able to follow kids for 15 years You might ask yourself. I asked myself Dan and I asked ourselves You know has that changed over cohorts? What about kids that were born more recently? Do they have even more complicated families? So what we did is we repeated this exercise, but with kids born five and ten years later And I'm going to draw your attention these this I'm going to show you just the picture for the most complicated so the light blue and This is kind of the risk for having half siblings on both sides And the purple line is just kind of graphing the flip side of what I showed you on that other Okay, so, you know almost 30% of the 1997 cohort had half siblings on both their mom's side and their dad's side Now if you look at the later cohort, it's actually lower Fewer people have the most complex families Or at least they're not having as complex of families as early And another work that we've done what we trying to understand what might be behind this one key piece of it Seems to be the delay in teen the delay in the decline in teen pregnancy So as you might expect if you have your first child when you're a teen Mom because my sample is based on moms a teen mom that might not be the relationship That's most likely to stick if you wait to have your first child Even if it's outside of marriage if you have it later That relationship might stick more or you might be less likely to be involved in more complicated Relationships later on and that seems to account for about a quarter to a third of this and we're still we're working on other Analysis so another way in which kind of time things have changed over time Okay, so what does this mean for policy? Well, it means that children and complicated there are more children in complicated and dynamic family arrangements So I think it becomes less and less tenable for us to have that simple family in mind When we're trying to design policies and Family complexity is more common for lower-income families as you might expect given some of the Stresses and strains and lower-income communities and we know that less educated Couples are less likely to marry and that we know that divorce rates are higher So there's lots of reasons to expect this to be higher So that means that when we're thinking about income support policies and programs We really have to get that simple family out of our head when we're trying to make our rules We need to understand the complexity of families and really grapple with the issues. What does that mean? For example, how much child support? Can you really expect a father to pay if he has obligations to children in a number of different households? It might be reasonable for him to pay in Wisconsin He's supposed to pay 17% of his income for one child But what if he has three children across three different households and he owes three times that? Now on the one hand if you're an economist if he has three children with in three different households Those three moms don't have economies of scale So you don't necessarily want to reduce what he owes But on the other hand there is a limit to what one person can pay if we decide That it's too much then what is our obligation as a society to make up for that gap? You know what what policies might we need to do that? So those are issues that I think we really need to grapple with We need also public institutions and policies that support families with children So I won't show you that the data because I'm gonna be short on time But we've done some analysis using data from Random assignment experiment that we have going on where we've had an opportunity to survey about 10,000 non custodial parents who are behind in their child support and one of the things that we find is that if you Compare how much fathers contribute to their most recent child and their oldest child They give informal support more to their most recent child which kind of makes sense, right? That's the relationship they've been in most recently That's where they're most likely to have a strong connection But if you look at their formal child support payments There's no difference between what goes formally to their youngest and their oldest child And you might expect that because the formal child support system is pretty Routinized and there's not really a lot of opportunity for fathers to have discretion So if we believe all kids deserve the same thing And one way to think about that is I shouldn't get less child support from my dad If he goes on to have another relationship with somebody else So if that's something that we care about then the formal child support system is doing a really good job of Making of assuring that kind of equity. That's an example of a way in which our institutions can support certain outcomes But you know so I can say it would be good We should do this but it's difficult to design and to implement effective solutions given this complexity and given these dynamics So, you know, it's one it's hard to figure out what the right child support order is For a father who has two children in two different households But then you also have to think about the fact that next year There may be a third household and are you gonna revisit what the kids are getting in the first two or not? So it's a very complicated and dynamic over time situation Which makes policy design both critical and challenging And so I'll leave you with that puzzle Next we have Sasha Kilowald. Oh, I use the last name Good morning. I'm really pleased to be here. I'm gonna talk about wealth and equality in the US I think that we tend to talk both in academia and in popular discourse a little more about income inequality But wealth and equality is even greater Just to give you a sense of how the wealth distribution in the US has evolved in recent decades This is a graph reproduced from work by Fabian Pfeffer and Bob Shaney both professors here at the University of Michigan To help you make sense of what you're seeing just focus first on that green line That's the green that's the line that represents how median wealth in the US has changed since 1984 and it's scaled so that 100 means the level of wealth that households at the median of the distribution held in 1984 So you can see that line ticking up prior to the Great Recession By 2007 the median household Had about 40 percent more wealth than the median household did back in 1984 And then you see the decline through the Great Recession and a little bit of recovery afterwards So that's kind of the macro level broad trend But you can also see all these other lines That top line the red line is how the 95th percentile of the wealth distribution changed over the same period And you can see again it's scaled to the level in 1984 being 100 You can see that the 95th percentile increases more rapidly than any other part of the distribution By 2007 the folks who were wealthy had more than twice as much in net worth as The wealthy folks at the same point in the distribution did back in 1984 and Things look very different at the other end of the wealth distribution So that bottom line the gray purple line is the line for the 25th percentile the distribution Even through the 80s and 90s where other parts of the distribution were gaining Those folks weren't really any better off than their counterparts were in 1984 And then after the economic crash you can see large declines in that wealth position So of course if you have the top of the distribution Rising and spreading out faster than any other part of the distribution at the same time that you have the bottom falling away This tends to increase wealth inequality and as professor Williams alluded to in his presentation earlier Wealth inequality is not something that's just randomly distributed in our population One of the major cleavages is variation by race and ethnicity So this is a graph reproduced from Pew that shows trends in the ratio of net worth for the median white household To net worth for the median African-American or Hispanic household So I want to highlight first of all just how big these disparities are when we think about Disparities in income median earnings for African-Americans Compared to whites and for Hispanics compared to whites We often expect a ratio in the neighborhood of two to one whites are earning roughly twice as much But for net worth you see we're talking about ratios more like 10 to 1 for African-Americans and 8 to 1 for Hispanics Furthermore you can see that these Differences aren't narrowing over time So sometimes we think that if we just wait long enough these racial disparities will go away And that's obviously not the pattern that you're seeing here It's mostly steady and then during the Great Recession Spike in those disparities because African-Americans and Hispanics were hit particularly hard by the recession So it's with this background that I became interested in the structure of Access to wealth in the United States I'm particularly interested in how the circumstances of your birth shape your opportunities to accumulate wealth and by circumstances of your birth I focus particularly on variation by race and by social origins and within social origins I'm especially interested in how the wealth your parents had shapes the wealth Access the wealth that you obtain in your own adult life So I'm just going to show one picture from work that's joined with Fabian pepper who I just see now in the audience here at the University of Michigan And here we're looking at how your parents wealth position look relates to your wealth position This is a graph for roughly middle-aged whites in the U.S. Currently and what you see on the x-axis is where your parents were in the wealth distribution and on the y-axis Where you are in the wealth distribution each one of those dots Represents the average outcome for offspring from a given Decile of the parental wealth distribution so that dot that you see on the far left-hand side Indicates that if your parents were in the bottom 10 percent of the wealth distribution Then we expect on average that you end up at about the 40th percentile of the wealth distribution Each of those dots is scaled in size to reflect how many or what fraction of the parents Belong to each of those deciles so whites are the largest group in this population So here you don't see much difference in the size of the dots. It's roughly 10% of white parents that are in each one of those deciles Looking at the slope you see not surprisingly that having wealthy parents is better for your own wealth attainment For every one percentile that your parents move up in the distribution Your own outcome is expected to go up or predicted to go up by about point four of a percentile So a slope of about point four Better to have wealthy parents now. I'm going to overlay the same picture for African-Americans First thing I want you to notice here is just how big the black dots are on the far left of distribution So whereas whites are sort of evenly spread across the distribution in terms of parental wealth That is not the case for African-American middle-aged folks in the contemporary US In fact a full 40 percent of the African-Americans in our sample had parents who came from that very bottom 10 percent Of the parental wealth distribution So African-Americans absolutely are disadvantaged in their own wealth accumulation in part due to the disadvantaged wealth positions of their parents But that's not the only thing that's different by race here Another thing you might notice is that the slope is much shallower for African-Americans than it is for whites. So for whites We predict that if your parents go up one percentile in the distribution You go up about point four for African-Americans the relationships only about point two now By itself, that's neither good nor bad having your outcomes less linked to your parents wealth is not necessarily a bad thing But that lack of association follows a very distinctive pattern of downward wealth mobility So for every Decisal of the parental wealth distribution that you see here every point on that x-axis The black dot always lies below the white dot So what does that mean that means that even if you have the same access to parental wealth when you're growing up Your own wealth is still predicted to be lower as an African-American and On average that tends to spread out across the distribution So African-Americans who had wealthy parents have a particularly large gap in general Between their outcomes and the outcomes of their white counterparts So what can we do with this information? Well, one other part of Fabians and my work is to look at the channels by which wealth is reproduced across generations And we find the education and home ownership are really key channels of transmission This doesn't necessarily mean that your parents are writing checks to pay for your home or pay for your education Although it can mean that it can also be other more indirect processes like buying a home in a neighborhood with High-quality secondary schools that allow you to go to college But if we know that these processes are one of the key ways that wealth is reproduced intergenerationally One thing we might do to intervene is to try to weaken the link between your social origins and these outcomes So we heard yesterday in the panel on educational disparities some of the policies that might help to make your educational attainment less dependent on the resources of your parents Something else that I think is important to keep in mind is that Racial and ethnic wealth and equality is reproduced fresh every generation. So as I said on the previous slide Yes, African-Americans wealth position is dis it is in part due to a legacy of disadvantage less parental wealth But just narrowing parental wealth just reducing gaps in social origins is not sufficient to close the race gap in wealth And we can see that played out in the slide. I showed earlier that these gaps aren't getting any smaller So if we want to make real progress in closing the race gap and wealth inequality It's not enough just to wait for the past to fade away One thing we can obviously do is try to target and reduce racial discrimination either in asset markets themselves So for example mortgage lending markets housing markets or in other domains that have consequences for your ability to accumulate wealth So for example, if we reduce hiring discrimination, we might reduce the race gap in income Which could then have implications for the race gap in wealth You might also notice that I haven't said anything yet about direct transfers from parents to their kids either During their lifetime or at at their death and these things do matter So bequests and direct transfers do explain some of the intergenerational reproduction of wealth But they're not as important as education or home ownership or even other mechanisms like marriage or ownership of a business And one of the reasons you might think of for this is that bequests in particular tend to come to you relatively late in life So folks are receiving bequests often in their 40s and 50s Whereas these other processes like education and home ownership and marriage those are often beginning and Completing even for education much much earlier So those bequests that you get later in life are just the cherry on top for folks who have already Accumulated substantial wealth in part because of their advantages of their parents wealth So with that said Certainly we can get rid of the estate tax and that could have important implications for redistribution But we shouldn't think of it as a major tool for reproducing the reproduction of inequality in wealth across the distribution So it could change some things for the ultra-wealthy, but it wouldn't change the general pattern across the distribution So last David asked us to talk a little bit about the difference that Michigan has made in our own lives and our research and For me for this project. This is not a hard exercise So the question of race gaps in wealth and how much they are aren't due to differences in parental wealth is a topic that I got Interested in while studying for my prelim exams as a PhD student in the public policy and sociology joint doctoral program here Reading the work of Dalton Conley being black living in the red And furthermore the work I just talked about as I mentioned is joint with Fabian Pfeffer Who is a professor here at Michigan in sociology and at ISR and the data we're using come from the panel study of income dynamics It's a data set that's collected here at Michigan and has been since 1968 It is one of the premier sources of wealth data in the United States and for looking at Intergenerational patterns of wealth is really the best data set. I first got to use that data set while I was an undergraduate at Michigan. I was an economics major and I took a class from Frank Stafford That I don't remember what the actual name was but it was basically how to use the PSID and in terms of investments I've made in my future career that may be the best class I've ever taken because it is not a Data set for sissies. It is a serious investment of your time And now it's one of these that I feel most comfortable using because of that great training and experience so in addition to my own Academic career, of course, Michigan is also Engaged in various policies that speak to these issues of inequality one thing I'm particularly excited about is the new go blue guarantee Which I'm sure many of you have heard about which I believe begins next year that guarantees free tuition to Michigan residents Who are coming from families that earn less than 65,000 dollars a year So this is one way to try to reduce that link between social origins and educational outcomes and as was mentioned in the earlier panel I'm also of course proud to be an alum of an institution that has defended the use of affirmative action By race and ethnicity in college admissions, which is yet another way to try to intervene in decoupling Circumstances of birth from educational outcomes And then last not only would I not recognize my professional life without the University of Michigan's influence? I also wouldn't recognize my personal life. My family has an intergenerational transmission of Michigan issue So my parents both worked for the University of Michigan I grew up here in Ann Arbor my mom just retired from the University of Michigan this year and Furthermore, I met my husband at age 19 in a South Quad dorm room So my entire life has really been shaped by Michigan and I'm just so proud to be an alum of this great University. Thank you And our last speaker for the session is Bonnie McLeod Okay What? No, it was not part of my training Well, I have to say It's it's a pleasure to be able to talk about some of the work that I've done but I'm gonna talk in more general terms about a body of literature Some of which I have contributed to my comments will be probably more general than the Then they would have been otherwise had I not had I known that Irv was not going to be here we overlap a lot and We are on a National Academy of Sciences Consensus committee of the On building an agenda to reduce the number of children in poverty by half in 10 years And I knew that Irv was gonna talk about that right so I did not Include any information on that Initiative so I apologize for that. But anyway, it is what it is as they say So what I want to do is talk about the issue of whether income really matters for children's development Okay, so There is an enormous amount of evidence that on average children growing up and families with Income below the poverty line have worse outcomes and virtually every dimension Including Cognitive development associate emotional functioning academic Achievement and labor market success compared to children who Grow up in higher income families and of course having said that it's important to make note of the fact that There are certainly children who grow up in poverty who do as well or even better than children who? Do not grow up in in poverty But the lower average attainment of poor children means that the resilience Of this kind is very much the exception the overwhelming majority of studies of Linking income to children's development is correlational That is income is found to be related to indicators of child functioning in naturally occurring circumstances And these studies are one of the limitations of these studies of course as you learn in Psychology 101 is that correlation does not equal causation So these studies are susceptible to biases from unmeasured parent and family characteristics Poor families differ from non poor families in lots of ways other than the fact that they have less income Including things like maternal age at first birth family structure maternal education etc So the links between family income and children's development could well reflect these unmeasured and measured Differences rather than income differences now most researchers of course try to take these differences into account by Controlling for them in their model estimates and that typically will reduce the association or the link between income and child outcomes and certainly studies that Do this that is that take into account these factors are much better than studies that don't take into account those Factors, but nevertheless these correlational studies are insufficient to establish a causal link between poverty and children's development So one of the Goals, I think of what we're doing on this national committee national category of sciences Partly is to convince policy makers that income really does matter There are people who absolutely don't believe that Matters in the sense that it has a causal impact on children's development So that the big question is whether or not income has a causal impact on children's development and In order to make that case I think we have to have a need Experimental research is critically important in establishing this extent to which this association is indeed causal So I want to talk about some experiments in which families are randomly assigned to treatment and control groups and The treatment group receives an income supplement and people in the control group do not One could also infer some causal impacts of income from quasi experimental research Even when families are not randomly assigned To treatment and control groups as when there is for example a change in policy So some people have looked at what happens when we see an increase in the EITC credit Does that correspond to increases in children's outcomes positive outcomes or increases in the child tax credit? So I won't talk about that today. I'm trying to be very conscientious and keep to my 15 minutes. Okay So I want to talk about these welfare experiments The there are several of them Were done Begone back in the 19 late 1980s early 1990s Several states were granted waivers of welfare rules in order to allow them to experiment with changes in the welfare provisions in their state They were required to use a random assignment design in order to get that waiver Because the idea was that they needed to have Evaluation research to Indicate what were the effects of these changes? some of the experiments had work requirements and wage supplements Others of them had work requirements, but no wage Supplements there were other variations like time limits and so forth and I'm not going to talk about those Because I don't have time But these earning supplement programs were intended to compensate for some of the shortcomings of the labor market like low wages No health insurance and to make work more financially rewarding The the other programs that I want to contrast this with or were mandatory they had mandatory employment services like education and training and immediate job search and There were about 10 of these That I that are included in what I'm going to summarize and as you can see here the Programs that had work requirements and wage supplements increase Mothers employment because most of these women were mothers most of these Parents were mothers Increase employment increase parental income and they had positive effects on the well-being of children Some of them all of the programs. I should say had a positive effect on children's achievement outcomes school achievement By approximately 10 to 15 percent as compared to children in the control group and some also reduced behavioral problems increased positive Social behavior and improved children's overall health Those that had work requirements, but no wage supplements increased parental employment, but they did not increase income and they had no consistent positive effects on child outcomes and These the second category of programs Did not increase income even though mothers were working more Because their income they lost welfare benefits as their earnings increased So that's that's the reason that you know, they were working more But they did not see an increase in their income So I think that we can conclude at least from these Experiments that there is a causal effect of family income on Preschool and elementary school children's well-being and as I said there there are other kinds of quasi-experimental data that reached the same conclusion and some of you are probably aware of the Casino studies that were done in North Carolina Showing positive effects of income as well as as I said the EITC and child care tax credit So I just want to tell you a little bit about One of the studies that I was involved in evaluating it was one of these earning supplement programs And as you can see from here, it was it was a new hope program in Milwaukee and The people who it was a team of us who did the evaluation Greg Duncan Alita Houston Tom Weisner from UCLA we were all part of this team that Traveled a lot to Milwaukee back during that time and so what you see here are effect sizes So children in the control the experimental group Performed better on the Woodcock Johnson reading test compared to the control group Their their parents also rated them as having higher levels of literacy skills Their teachers rated them as having stronger academic skills and better behavior in the classroom The thing about new hope that complicates matters is that The effects were much stronger for boys than they were for girls And I can talk about why I think that is but before I do that I want to finish talking about what the general pattern of effects were So this was a five-year follow-up. We followed these kids for eight years actually and Even and I should say this five-year follow-up The income supplement the program had ended at this point, but we continue to see positive effects Mostly for boys at at the eight-year follow-up. We also see some positive effects the children in The new hope program had less cynicism about work They were less pessimistic about their future employment prospects And they were more involved in employment and career preparation so We were very impressed by this and I'm quite surprised even though we did the follow-up We weren't quite expecting to see fairly consistent evidence of positive effects The other thing that I forgot to mention is that in fact These programs were not conceived to have a positive effect on children The programs were focused on getting parents into the workplace Increasing their employment and increasing income. There was no plan to Have a positive effect on children per se We just you know, I think with it with the new whole project We just said it's some really important to evaluate how this program is affecting children and Fortunately, we're able to get funds to do that. So it's all the more impressive That these programs had positive effects on children When they were not conceived to have positive effects on children. Okay, so Why that if income does have a causal effect on children's development? What is the pathway? I Have done a lot of of work Looking at this second pathway. There are two major pathways that people have looked at to explain Income effects on children's development one is the investment pathway and the other is a stress pathway The investment pathway essentially is about goods and services. It says parents children don't poor children do not function Cognitively academically, etc at the level of Children who are not poor on average because their parents don't have the resources to invest in them they Do not have monies to provide stimulating Activities in the home simulating educational materials. They don't have money to provide high quality child care So so that investment pathway really looks at resources and goods and services The stress pathway on the other hand focuses more on parenting With the idea that when you are don't have enough money to pay your bills. It creates a lot of mental stress Anxiety depression Conflict between parents and or marital partners And that influence that in turn influences your parenting behaviors and in turn Influences parenting behavior specifically by increasing the tendency to be inconsistent To be harsh punitive, etc And that those are the ways in which That is a pathway by which ultimately the child's development is a compromised But the experimental findings Clearly favor investment pathway mostly research That's consistent with the stress pathway tends to be correlational work There's a lot of work on the family stress model. I've done a lot of it. Some of my students have done some of it, too But when we look at these experiments And try to figure out what is the pathway by which these wage supplements had effects on children's development in general, we don't see that they have Strong effects on or consistent effects on parenting on parents mental health What we do see and Greg Duncan has done a lot of this work. We do see that consistently Increased income and center-based child care is seems to be the key pathway by which These weight wage supplements affected children's development So that's kind of the story around that I just want to show you for the new whole project. In fact This shows the effect of new new hope on child care. So the experimental group Children in the experimental group or whose parents were in the experimental group Spent many more hours in center-based care and before and after school programs They were less likely to be in home-based care and less likely to be in unsupervised care so that's just one example from one of these projects, but Greg has done a synthesis of these Programs looking at pathways and on the basis of that His I mean his analysis shows clearly that it's child care. That's driving this positive impact on children So I was in response to your Request that we talk about trends that show good news trends that show bad news. I wasn't sure whether you were talking about the phenomenon that we are Looking at or the field itself So I decided to focus my comments on the What's going on in the broader world in the United States in terms of these In terms of income So I think the good news is that more states are setting a minimum wage That is higher than the federal minimum wage I think it's outrageous that the minimum wage the federal minimum wage is $7.25 I mean, it's I just it's hard to imagine that that is a case, but it is And I would say that I think it's great that states are setting a minimum that is higher and that states are Indexing the minimum wage for inflation so that it is automatically as Jeff said each year for increases in price You know the One of the problems that low-income that women in particular with low levels of education have is That they are concentrating in jobs and the service in the retail sector where pay is low But here's a statistic that just you know is is just very striking to me in 2014 about Half of low-income children and about 30% of poor children under 18 live with at least one parent who was employed full-time year-round and What these statistics reflect is the fact that the current minimum wage of seven dollars and 25 cents is not a living wage So I think it's good to see that more states are setting a minimum wage I Also think it's a great thing a great pattern a good pattern that in recent years several states have enacted Earned income tax credits or they have expanded their EITC's to bolster the wages of struggling families On the on the other side though a trend that I think shows bad news is that more states are enacting laws that Prohibit cities from increasing their minimum wage on the grounds that Having these within-state variances and minimum wage will pit local communities against each other and faucet unstable business climate There are a lot of other bad news trends that I could Describe I had a hard time coming up with the good news very hard Michigan experience I Was not trained in policy. I was a traditional developmental Psychologists my training was a traditional developmental psychologist. I actually did Laboratory research on children's play as a graduate student and For the first five years post PhD that was what I did After I got tenure I decided I want to do something more interesting and important And it turned out that I was I got involved in this Bush program in child development social policy It was here in Michigan and I had a lot of students who were interested in Policy and poverty and they kind of you know corralled me into being involved in this And I'm very thankful that they that they did and the other thing that was going on at the time When I came back to Michigan on the faculty is that we were in the midst of this terrible recession And we were constantly reading articles in the newspaper about how the recession was impacting families So I got very interested in that as a result of being the the local economy And was fortunate to be part of this Bush program in child development social policy and fortunately it no longer exists I was also fortunate to be part of an interdisciplinary Poverty focus work group at the Center for Human Growth and Development And I think the in general the big Influence I think on me as a researcher Was the just the richness the intellectual richness that exists at Michigan and the fact that there's always somebody you Can go and talk to about an issue that you care about and so I had long conversations with Greg Duncan years and years and years ago and So he was he was a terrific person. He still is and I've enjoyed working with him as part of this National Academy of Sciences group So I'm gonna in there and Well, everybody's coming up. I failed to mention that Irv Garfinkel unfortunately couldn't make it. He had a health problem just Just this week and wasn't able to make it and I encourage you to read about him in the program If you don't already know how it's great work. He's he's made many important contributions as as Bonnie alluded to You hear this So we're taking questions if anybody has a question. I guess Raise a hand grab a microphone Don't put us on the spot. Thank you Thank you. I have a question for Maria and so it was interesting to see these increases and the family complexity and I was wondering whether you've also taken a look at how that intersects Or how that relates to within household and out of household complexity so as you pointed out These complex families may be co-residing or not And the cohort trends and the life course trends Would be quite interesting to see sort of broken out into co-residents or not co-residents I think that's Conceptually interesting right because it's very different whether you have five halves of links somewhere in the country or in your household It's interesting from a policy perspective and it may even be interesting from a measurement perspective I wonder whether that poses some you know challenges to really capturing everyone depending on whether that intersects with co-residents So I'll agree with you that it's interesting and hard and and I have a project a couple projects right now with Dan and Lonnie Berger and some other colleagues one trying to use SIP data to try to capture some of those things The main thing we're doing on this and I don't have results to share but just kind of a to kind of Idea so we're trying to understand resource transfers both Within the household but then from people in the household to those outside and vice versa so we've used the Administrative data that I kind of did the analysis with on complex families to draw a sample and then survey moms Four times in the course of a year and ask them about resource transfers from them to other people and from other people to them and what we've Done is focused particularly on food because that's you know when people We care about other things like rent and and other things but those transfers tend to be lumpy and fairly infrequent So we actually are asking Moms for every person who they've provided a meal or taken out for a meal or bought groceries for and every person who has Done the same for them and we ask about all the people who are in the household We ask about all the fathers of any children who are in the household And then we ask about everybody else very explicitly. So this is kind of a long for those of you that are survey methodologists We had a lot of fights with our colleagues at the Survey Center and on the kind of methods question One of the things that the University of Wisconsin Survey Center developed and this is Nora Schaefer's work is a kind of interactive collaborative interviewing technique where people tell us about all the people in their life and then the Surveyors kind of enter that information and it appears on a Kind of a little laptop that the person who is talking to us can see so they can see a representation of the people that and then they can tell us about the transfers between them and those people so we've actually Nora's actually and her team have actually developed new survey techniques That are required in order for us to be able to get the kind of information that we want about these complex Relationships and we're going in and interviewing every four months because they're so dynamic question for Alexandra When you did your wealth curves, and I saw The bottom 25% went down. I really would like to know what the wealth was At the 25th percentile and are you doing including negative wealth? So would is it possible for okay? Yeah, so I can just say briefly that one of the advantages I think of looking at percentiles which we did in that graph is that it's easy to incorporate zeros and negatives So the 25th percentile five and you can correct me if I get this wrong But it stays positive over this entire period is that yeah, right? So it is a low level. It's The fraction of Americans who are in debt When you add up all their assets assets and subtract what they owe is less than 25% for this entire period But it is a real issue of how to think about those with zero and negative net worth And I think there's some interesting Methodological issues people have often just done the log of wealth, but then there's this question of what to do with it So that's one of the reasons we use the percentiles Big thank you to all of you for your great talks Bonnie, this is David Williams. I have a question for you. It's been a long time Um Could you comment a little bit more about the gender differences that were observed in the New Hope experiment? And just in a lot of these early childhood interventions like in the Perry preschool study be fine stronger effects For girls and boys in the Abyssinian project. We find stronger effects for boys and girls Just how do we make sense of some of these gender differences in New Hope but more generally I Just wanted to push you all to talk a little bit more about the links between research and policy in this area It's an interesting area and the money you talked about it a lot, and you all alluded to it to some degree, but These areas are areas where there's been a lot of Bonnie's you said even the even the welfare to work programs there was sort of this mandate of having and having Randomization so that things could be learned from it. It's an area where we've had a lot of At least intention of having research informed policy, but I wonder if you could all just reflect on How well is that worked? Is it is it working is is the research really linking to? to policy could more be done to To do more in that regard I don't want to start because I'm kind of a huge cynic about The like the possibilities for policy interventions in wealth inequality I don't think that people really fail to know the relevant facts here I think they just don't care that enough to change it and so I was really Impressed in yesterday's session there was some question about like what policymaker would you talk to and what would you say? And I was so impressed that everyone had like a really great answer to that And I thought you know you can't say to a policymaker Hey wealth inequality is really big and it matters for your parents or and also it's really different by race like they Already know those things. They just choose I think not to care So so that's why I didn't want to go first I'm not usually the half-full person, but I'll be the half-full person. So I Agree that when somebody's not open to an answer, there's very little that evidence can do at the same time I think that a Tremendous number of the policy issues issues the policymakers face Are just on the margin fairly small changes that can actually have a big impact So it might be and in those cases. I think research can really make a difference. So someone I think Celia Munoz noted yesterday that early in the Obama administration We realized that we were expelling a lot of African-American boys from preschool From Head Start programs and it occurred to folks that that wasn't what Head Start was supposed to be doing And we changed policy. Now. That's not a big That's not restructuring, but it's a something on the margin and a lot of the work that I've done that has I think Had an impact say in Wisconsin in the last Eight years under Governor Walker who maybe has a different perspective on some issues than I might Have been about saying we can save money and make things better for families on this little margin And so in that context so not Overall change because I think there's there's not so much reason to be helpful a lot of that But on the margin, I think things like the evidence-based policy commission, which is a bipartisan effort Efforts to try to use Data to actually inform policy and practice. I don't think it bodes all that well for illuminating these Structural oppression which is probably not caused by people failing to understand that it exists But at least making the programs that we have that are designed to offset some of the negative consequences of those oppressions To be more effective and efficient. So it's a smaller thing, but I do think that there's a role for that Spending time on this National Academy of Sciences To me we are Vandated essentially to come up with Proposals for reducing childhood poverty by half in the next ten years And you know, I'm Doing it. I'm involved in it. We are doing policy simulations to see if you with certain assumptions For different kinds of policies. How much does it reduce? Poverty childhood poverty I think you know, I find it's all very interesting But how much of a difference it's gonna make is very uncertain But I think it's useful to be able to give this information to People who do want to make a change you give them the scientific information and hopefully they are in a better position of their staff to use that to back up their their argument the it was when this this committee was established it was before the election and You know, like everybody else We thought Hillary Clinton was going to win and so everybody was really enthusiastic that our report would get Would be would we received Very favorably, I mean it was mandated by Congress that this committee be set up and we're supposed to Submit a report by the end of the summer And then after the election everybody was really depressed like why are we doing this? But I think people do feel very very committed to Seeing this through and are optimistic that maybe I don't know. I think David's comments this morning were very much on target in terms of Ways that you present the message that you're better likely to get a good hearing and people are more likely to Listen to what you have to say. It also helps us that on our committee. We have people who have tremendous experience and working I've been for a moment if you can hear me, so I'm actually I have nothing to do with this personally, but I'm on the academic research council for the Consumer Financial Protection Bureau and One of the things by the bureau coming online is that they've been able to get access to a lot of administrative record They have power to get these records then do lots of things and so one of the things that you may have seen about recently is that You know after looking doing the research and looking at a lot of facts about payday lending and who's re-upping their loans Etc. They've just entirely rewritten the financial rules for payday lending and so And so I was talking to well anyway Talking to somebody who is a former UM He's a UM alum who's working for this CFPB and one of the things that you see is a lot of the money the industry makes from payday lending It's coming from the people who not surprisingly are keep getting the loans and these regulations are basically going to cut that tail Which is a lot of their there might so be interesting to see how this goes forward But I think that is one place like so everything they're doing is informed by the research and having the access so I think getting the access to the data related to this, you know being able to use the gold standard of the The randomized clinical trials that you were mentioning before is also another way that I think with big data We're going to see other differences that people can make doing research But you know having the facts to do it is tough because also getting the proprietary Firm data is always going to be a challenge. So it's nice that some You know agencies have this access for as long as this agency is going to be around I suppose but I Am a U of M PhD I'm also a fourth generation activist for policy The last time I was in this room was a conference on how professors have a responsibility to cope with their own cynicism and not share it with their students so that we end up graduating early cynics Because that's really a shame and that we combine our research With examples of skills for democracy We had that one session yesterday where they here's what you say. Here's how you do it. Here's how you listen house Here's how you connect. Here's how you build coalitions. Here's how you use leverage points for change and I Am hopeful That as you take this research you're doing You combine it also with assignments So it doesn't all have to be in student life and extra programs like project outreach and service learning So that students actually come out with the skills they need to be not only systemic thinkers, but effective change agents Getting a little bit more specific on the question because I want to know what you have at each of your institutions that are actually institutionalizing that because that will institutionalize systemic positive change But also combining your research on wealth With the research on and if you don't fix this you're gonna have higher in cost Incarceration costs and higher these costs and higher those costs and this is just not cost-effective for those who can't Epitize with human suffering but can Respond to where they come from in their value system. I have to say I was never told that that was part of my responsibility but And and I think There is just such a distance from research to policy But one you know depending up on one's values you do what you can So I don't I don't do very much work research, you know in the community as such But I do other things like Last year year before chaired a committee That was established by a provost's office to envision what a Poverty initiative would look like at the University of Michigan The provost said a lot of faculty are really interested in this topic what might we do to make a difference and So this was a committee of about 15 faculty from around campus From various schools and colleges From the medical school to the law school to the business school LSN a and we came up with a proposal. I mean we met Every week for about six months and we came up with a proposal that did Eventuate in a new Institute called poverty solutions that is chaired by Luke Schaefer Who's a professor in social work and public policy? And so that's my contribution To this process as well as you know working on this national committee National Academy of Sciences committee I think there's there's a diversity of things that people can do and you use what Skills you have In the service of that So there are some things I don't know don't have the skills to do and I acknowledge that and I'm okay with that So I would just add to that that you know in addition to being good teachers I think one of the things that institutions academic institutions can do is to create environments that are hospitable to engaged research and so So I could if we were in Wisconsin I would talk about the Wisconsin idea, which is the idea that the Boundaries of the University extend beyond the campus and and engagement and that's really nice I think if you look at tenure rates, you would probably find that Maybe it wouldn't be a negative correlation between how engaged your research is and your probability of getting tenure But it certainly wouldn't be super positive. I think people are really taking that on So one of the things that I would highlight the W. T. Grant Foundation, which is really focused on how research gets into practice I'm just announced a new Kind of competition for projects that bring academics and practitioners in close collaboration But one of the things that's unique about it is it requires the academic institution to talk about how it's changing the rules of the game What resources it's putting on the table for making work that leads to real change on the ground to be valued Whether it's in the tenure Roll or in in different places. So I think there's an increasing both a focus on Increasing sophistication on kind of how to talk like it's not, you know Getting over the idea that that academics have all this wisdom that we will just rain down on people who do real work So I think we've kind of most of us have gotten over that but now I think there's actually some more self-critical Focus on what's the nature of the academic enterprise and how in the classroom as you've pointed to In terms of service learning and things like that But then also in terms of the fundamental structure of the university and the kind of scholarship that we value You know what things what how do we have to change the rules of the game of a university in order to encourage that kind of work? I should also add that in terms of the policy solutions Institute, I was just describing It was very important to us to make sure that there was a Component that was dedicated to having involvement of undergraduate students and so this center gives priority to Administration projects with random assignment to show the effectiveness of different policies Related to reducing poverty and related to reducing the effects of poverty So, you know, we looked very closely at that and that was really important to the committee to have Something that focused specifically on undergraduate students as well as graduate students and postdocs, but yeah Cynical about the idea that we can reduce wealth and equality I think to sort of what Maria was saying and to David's point in the previous session I don't think there's a fact I can give people that would change their mind about the policies They should adopt on wealth and equality. And so I think for me. I I don't always see the role of my research and the things I believe in and Advocating for as in this sort of dissemination framework. I think there's other things that might be the most Relevant strategies to pursue in terms of the things that universities do some one of my Formative experiences here at Michigan as an undergrad was I worked for the sexual assault prevention and awareness center and for reasons that Escaped me the director let me redesign how we collected surveys about the effectiveness of our pure education program And so I got to design these pre-test and post-test and like cross design so there wouldn't be priming effects and of course now I think wow, you know, that was really an amazing research opportunity for me and Something just you know told her that that would be okay for me to do and similarly at Harvard I've been on a committee that awards thesis prizes and one of them went to a Student who thought that the way that the university health student health services was collecting Surveys on student health throughout their time in Harvard wasn't done very well And so she redid it and they partnered with her and they adopted it And I think those are wonderful experiences for students to have also where they get to really apply In the social sciences the skills that they're learning to a very real very immediate very short-term thing on their own campus It's a great kind of practice and motivator. I think for then taking that out in their post college years Because I think she among all the scholars I know has Work oh, she's worked so hard in designing experiments and in figuring out How you actually change things For example the example you gave about center-based care and after-school care people There's a reason Obama had a preschool initiative. There's a reason the Schools now offer very different options for after-school care particularly for low-income families across the country So I think a lot of it takes a while But her work has really changed the world for small children in the US and So she may not want to say so but I do So I hi, I'm Otis. I may wash you The two things that I think the earlier session Suggested that the way that we frame our work really May be the the link to policy and so no we might not be talking about wealth inequality per se but Most of the work including your own Alexandra Suggest that housing is a real contributor to wealth and So we also know that during the Great Recession. That's how lots of families, especially of color Lost wealth and lost their status relative to other groups. So One of those programs was harp, which is the housing affordable refinance program Which is set to actually end next year and so what happened with that programs that a lot of african-americans a lot of people who were in these high interest rate loans Ended up refinancing avoiding foreclosure and so I'm curious about the opportunity costs In other words, what would have happened to black wealth in the absence of that policy? So I see direct linkages between what you do and some of the things that are contributing to wealth inequality And so I'm just hoping that and I'm I'm very cynical. I mean I I've I've been in appropriations and authorization committees meetings and I know how they are But at the same time if we do not marshal what knowledge we have and apply it to the pressing policy problems Other the other side hate to sound polemical But the other side will and so we need you in the game and actually applying your great work to a lot of these issues Again, I think that my cynicism is a little bit I didn't say it very well to explain what I mean Which is just that I was attempting to echo what was said earlier that I think the depth of inequality in America Is not an unknown fact and so I absolutely think there are places to intervene in policy for wealth And I absolutely support that so an amazing example, which we were just talking about last night Was that an early draft of the Republican tax bill proposed getting rid of the tax The mortgage tax benefit for second homes and capping the mortgage deduction on first homes at five hundred thousand dollars rather than a million as is present. Well, that's a sort of interesting redistributive progressive idea to be in the draft of the Republican Tax plan, I don't think that's gonna be what's in the final version, but absolutely I think we can advocate on policies like that. That'd be one really important way to intervene So again, all I'm saying is I don't think my research saying hey Who your parents are really matters is the fact that's missing from our policy discussions I think we need different kinds of conversations and again back to Maria's point I think when scholars come in and say hey, you probably just haven't thought of The right my brilliant scholarship yet I think that can be kind of counterproductive and we may need to shift a little bit to say I work with big survey Data about general patterns in the population that may not be the relevant way to get into the weeds and talk with policy makers about whether we can shift that deduction from a million to five hundred thousand I Well, I think that's all of our time for our session. So we please thank our panel members