 Well good afternoon and welcome everyone. My name is Barry rave I'm a professor here at the Ford school and I the director of close-up the Center for local state and urban policy Which was one of the co-sponsors of today's event want to begin by thanking my colleague Bonnie Roberts for all of her hard work Is always in organizing this event and I also want to acknowledge our co-sponsors poverty solutions where we recognize the Very exciting things that are going on under Luke Schaefer's leadership and the opportunity to work more and more in collaborative ways I want to thank Luke the director of poverty solutions and our Ford school students Amara Ansari and Ryan Regiero Regiero, excuse me Who will sort through questions that you can submit the note cards? To our speaker after his talk We've reserved about 25 minutes at the end of the session for Q&A We want to have good discussion after what I'm sure will be a very interesting presentation So please write any questions that you have on three about three by five cards and Staff will begin picking those up in about half an hour. So just be mindful of all of that Yeah, we do a number of events here at Ford and close-up has done a fair number over the years as well For a long time. I really wanted to find some way to focus a bit on the unique governance Circumstances of our nation's capital Washington, DC Not quite a city not quite a state, but with interesting interesting policy issues and questions And I've often wanted for us to find as a center ways to engage the topics related to the earned income tax credit Particularly sub-federal variations and versions of it an issue that has become even more ripe for conversation in this state Since governor Whitmer proposed substantial changes to the Michigan EITC Through was probably better known proposals to elevate the Michigan gasoline tax to the highest rate in the US Lots of reasons to think about talking about these two issues EITC at the sub-federal level But also a Washington, DC context. I've wanted to do these things for a long time I've also for at least a few years wanted to try to figure out some way to get Bradley Hardy here to give a talk So you can argue today as a triple crown or a triple threat because Bradley. We are delighted to have you join us Bradley is an associate professor in the school of public affairs at American University He is currently a visiting scholar at the Russell Russell at Russell sage in Washington, DC He is also a non resident senior fellow in the economic studies program at the Brookings institution and many of you know his work He is making a real impact across a number of areas of social poverty policy considerations And was just a natural person for both poverty solutions and close-up to come together in this event On a more personal note. I actually got to meet Bradley for the first time Three years ago when I shared an office a courtesy office I had during a sabbatical at American University down the hall and I realized what an engaging Thoughtful scholar. He is in every sense of that term and just a very positive and constructive presence And so I am just absolutely delighted and honored to be able to welcome and introduce Bradley Hardy Bradley. Welcome Okay, well a very thank you for that introduction and Thanks to close-up and poverty solutions for hosting me And happy to kind of talk about this this project that I have that's Joint with Dan Muhammad and Marcus Casey and a former student Rucha Samudra You know my work has broadly been thinking about the social safety net and a lot of folks here at Ford Go to class and you're talking about these issues here as well Social safety net, but then even thinking about social mobility What policy? You know interventions do we have and DC has been interesting because you know as it turns out They've been quite aggressive on these sorts of policy interventions like EITC But not limited to EITC Some other interventions as well here. We're focused on the earned income tax credit So, you know, I'll give some overview I think it's an interesting thing because depending on the classes you're taking or your area of scholarship You might know a lot or a little about the program. So hopefully we'll bring everybody up to speed throughout the talk Okay, and so you know the work relies on Administrative tax data in the city So we're grateful to the government of District of Columbia as well as up John Institute and Russell Sage for supporting the work and This is kind of boilerplate that you know, I'm going to be prescriptive in here Talk about income inequality talk about a lot of the trends we're seeing but you know Neither I nor our colleagues are speaking for the the government or or Mayor Bowser who just released her 2020 budget in DC and a lot of interesting issues there related to Homelessness and affordable housing policy. So interesting stuff going on in the city Okay, so at the federal level if you're a student of kind of poverty policy social welfare policy You know, you'd find that the the federal EITC It's been around for a while But it's undergone sort of substantial expansions throughout the 80s and 90s and even 2000s typically during tax reform efforts That's the federal level the the city Enacted its own EITC in in 2001 But it was only 10% of whatever federal credit a Worker would receive But it's ratcheted up over the 2000s To equal 40% of whatever federal earned income tax credit that the filer receives today and By our estimation it makes it the the most generous Subnational credit There are some other states that have something akin to 40% on the docket, but it comes with a bunch of provisions that DC doesn't have We'll talk a bit more about this In a couple of slides, but really you can think of the earned income tax credit as a wage subsidy That's just operating through the tax code And so this is really making work pay a bit more creating positive incentives for folks to work in the first place And there's been a whole battery of labor economics and social policy research more or less showing that This subsidy this this tax credit Does in fact incentivize work it boosts consumption It does have quite a bit of benefit and Then interestingly, you know when you talk to people about what they think Welfare is even to this day. It's quite fascinating 2019 and there are images that many citizens have of of Very generous cash welfare state And by and large with with maybe some some state exceptions where there's more generosity That hasn't been the case since about the mid to late 1990s Standard welfare or TANF goes to a bunch of important at times, but non-cash activities maybe You know job assistance job training Even some child care subsidies Transportation subsidies, but other states are doing a lot of work in welfare on marriage promotion But oftentimes not putting money into the cash benefit interestingly then the earned income tax credit is actually the largest cash transfer that's going to go to the poor in America so kind of a not well-known fact and You know they talk about bearing the lead one thing I would say though is that The one policy challenge and folks at board would grapple with this is that you only get this if you're working in the first place So you can kind of imagine that there's a lot of benefits. There's a lot of buy-in to this program politically You know a lot of different reasons people have tended to support the federally ITC But nonetheless, this is part of a general result that we see More and more sort of general welfare benefits going to folks who are maybe poor and near poor And in many instances fewer benefits going to folks who are in deep poverty And so there's folks like like Luke who've done a lot of this interesting work thinking about folks who are well below the Federal poverty line, right? So that's a that's an interesting fact to kind of carry with you as we move forward We want to understand whether or not the the the city-state intervention Combined to Lower inequality with the federal EITC. So you got this DC earned income tax credit You've got the federal EITC that's being received concurrently Does it reduce inequality? And then we also wanted to understand if we saw any evidence of increased earnings and incomes I'm going to focus the limited time we have here Really thinking through the the inequality results we have and then kind of in closing I'm going to tell you about sort of what we're thinking about in terms of income growth over the over the 2000s Many of you in this room will use secondary data sets like the current population survey Michigan's panel study of income dynamics here. We're using actual tax return data For tax filers in the District of Columbia and so this has a bunch of interesting opportunities But also some limitations and and so you know We do find pretty substantial Post EITC reduction in inequality. It's a good news But we also see some interesting evidence that the the well documented transitions Economically within DC are also showing up in this data So for those of you who aren't really familiar with the context of the District of Columbia, we've experienced like rapid Gentrification rapid neighborhood change neighborhood transition and it's really kind of a tale of two sides and so far as This has put quite a bit of strain on low and moderate income residents And I'll show you a little bit of what this looks like in terms of the composition of the city at the end of the talk But then on the other hand The improved property tax base improved income tax base. This actually allows the city to be able to finance You know in our view the most generous subnational credit so Both things are happening here So it's interesting, you know, I've taken a side now it's interesting for me talking about tax policies like it's like really exhilarating, right? I love it. I Don't know how you all feel but you know, I woke up this morning. I was a little sluggish and you know, you know, is that dinner with Barry last night and this is not to do with taxes I said, you know, Barry I started to feel kind of allergic reaction. I get allergies and swelling and stuff like that I was trying to figure out, you know, what was going on and You know, I woke up this morning and I figured it out my granddad my mom and my dad Have PhDs from Michigan State They've got sparty running through my I'm allergic. I didn't even know I you know, so I bear with me, you know I was gonna say do people do people lead with that or in with that That's right. I'm from North Carolina. So that's a whole another issue, but um, okay, so moving forward now You're awake now. So If you go Into the background on the ITC in the 70s, there was this larger conversation about Tax burdens on low-income workers. There were also proposals percolating around Things that look a lot like universal basic income negative income tax experiments and so The ITC in some sense was born out of these conversations That sort of said well, you know at a minimum we could we could really try to reduce This large implicit tax on earnings and work as people are cycling off of welfare and then hitting You know tax burdens that we want to we want to nullify that and get rid of that as a disincentive to work and So then there's been this big literature at the federal level more or less documenting that You know when you use the earned income tax credit as more or less a proxy for an income shock So as a clever identification strategy to kind of ask a bigger question about the role of income in Driving educational outcomes things like this. We see the ITC does in fact promote higher educational outcomes we see positive effects on what we'd call extensive margin employment So, you know right now in this country, we have relatively low unemployment rates There's still a lingering conversation about what people would call the labor participation rate So you got folks who just aren't even looking in the first place That's of concern to policy makers With a particular attention to men in many parts of the country How do you get people to then enter in the first place? EITC has generally been found to be effective at that so-called extensive margin, right? so we know a lot at the federal level and There've been great Think tanks to think hard about what's going on in terms of poverty reduction Colleagues at the center on budget and policy priorities They'll do a lot of these like accounting exercises, you know count before and after EITC how many people are lifted above poverty But we don't know as much at the sub-national level Again as I said at the outset You've got quite a bit going on Which I'll try to summarize But we've seen the federal credit Have big expansions tax reform act of 1986 had a big expansion We had another big expansion more recently in the the recovery act during the Great Recession But then concurrent with this you've had the DC credit enacted around 2000 2001 and then have these kind of Credit expansions throughout the 2000s so I'll show you this in a table, but They started off at 10% of the federal You move up to 25% of the federal in 2002 Then you go to 35% of the federal credit, you know six and then finally 40% of the federal credit in 2009 And so a lot of what we're doing in our our studies Because we've gotten some some work done prior to this project and we have future ideas It's just kind of understand how these expansions over the 2000s have related to issues like inequality like mobility across the city and and really just trying to do an evaluation in A test case that might represent Where some policymakers would want to go with a more generous credit in their own states or even nationally okay, so What we're showing in the map here is that over half the states have now enacted Supplementally ITC's Now the the gold colored ones are not refundable Right, so you know Virginia for example, they're just trying to offset any tax burden that you have So the the sorts of mechanisms and effects that you know We're talking about from the federally ITC, you know You might surmise that you you don't expect that from something that's non refundable Some local context you guys here in Michigan to have an earned income credit that's equal to 6% of the federally ITC I was having a nice conversation this morning in close-up Where it came to my attention that 6% is a relatively new and lower level and that puts you all an interesting company because North Carolina my home state is to my knowledge the the other state that Actually had any ITC, but in the case of North Carolina, I think they removed it all together And so that's just sort of an interesting context to think about Another piece of this context worth thinking about is that at least in prior years You might not know this but you know This is impressive. Look at all these states that are doing this stuff on the ITC California is doing some expansions as well but It turns out that states can use their their welfare TANF block grants and particularly the maintenance of effort Subcomponent to fund the actual state EITC's themselves not all do it Michigan was doing this in previous years And so that's just sort of an interesting interplay to consider as we think about Earned income tax credits Alongside other state-level policies TANF minimum wages that that in some instances You're actually drawing from parts of that that that grant that block grant to support this this other social policy intervention Okay so again If you're someone who's in the weeds of like tax policy center tables and things like that Then this is a familiar table But the main thing I'd want to call your attention to is the following. I told you that the the EITC incentivizes work and so really what's happening is that At the initial phase in or beginning point of the EITC you can think about this as the going from No earnings to one dollar earned if we looked at a Maybe a single parent with two kids the way you read this is that 40 cents is Subsidized on every dollar earned, right? So a dollar earned becomes a dollar 40 Up to Basically this minimum income just beyond 13 thousand dollars at which point This family finds themselves receiving the maximum EITC of about fifty five hundred dollars and so Like any other social program there's some interesting graphics by Gene Stirling and co-authors it basically showed it With our programs These all have so-called benefit reduction rates. We phase out the program program doesn't go on indefinitely What goes up must come down and So the program phases out At around 18 thousand dollars again keep in mind. This is tax year 2014 You lose 21 cents of this benefit for every dollar earned and You'd see this same sort of phase out in other social programs You know snap food stamp benefits for example, right? But then importantly if we look at this last dollar amount An interesting point here is that for better or worse This is a program. It's hitting families that are perhaps what we think of as near poor moderate income But but not strictly poor in the classic sense, right? so So this is kind of how the program is designed. I think I have an interesting little slide in the back The classic stair step figure for EITC. I'm not convinced that's more or less helpful sometimes Okay, so the policy context here is that You had really engaged nonprofit actors DC fiscal policy Institute They are kind of a subset of the center on budget and policy priorities and The DC FBI was instrumental in pushing the DC council and the mayor at the time Anthony Williams to enact a State EITC and I think this context is important your public administration and policy students these things don't just happen There's actual political pressure and Put forth on policy makers And so this is just what I was talking about before that you you see the credit expanding over the 2000s It is worth noting that we do now have a Childless EITC credit that's been around for a couple years that that's also not been evaluated Also worth noting that as we're talking about these DC level Changes throughout the 2000s, you know, you still do have the federal credit that's being adjusted upward for inflation And you also have some expansions during the recovery act during the Great Recession That that made the credit a bit more generous for large Large families, right? So I'm just showing you DC policy variation, but there's other stuff going on to be sure again Some subset of the room travels back and forth to DC quite a bit I'll make the general conjecture that for people who visit DC. They're oftentimes spending time In the upper northwest part of the city That's not the entire city though And there's a a great rich history east of the river and East of the river, I would say has greater heterogeneity and income These are the wards seven and eight east of the Anacostia River and by no stretch are those wards Sort of dominated by poverty But nonetheless the highest poverty census tracks are situated in wards seven and eight And so I'll show you some inequality results that more or less confirm that the inequality reduction Has its largest impact actually east of the river And some other stuff having to do with where the the composition of EITC filers Are seen to be shifting over the period and I think largely it kind of follows what you might expect okay So again, you know if you put your secondary data hat on You're thinking about drawing data on the population of interest In this area, we've thought hard about What would sort of be thought of as the modal poverty population and this has traditionally been Families headed by one adult typically that adults a woman and so We follow in the tradition of this literature to think hard about trying to isolate These single parents. We also compare to married families or married parents Again, it's a bit in the weeds, but for our purposes, it's not a secondary data set. So we're taking Tax definitions and trying to kind of bring them in To what we would think of in the secondary data world So folks who are filing as household heads are Typically these single parents and we're going to refer to them as such in our results And then we're going to look at people who are married filing jointly Two additional considerations that the research team continues to grapple with Are that we were thinking about this as on the one hand looking at Families that stay in the city all 14 years And then we have another version of this data where we allow for people to be in and out of the sample over that time period Part of the thinking on this is that there's a whole literature that's worried about welfare migration More generally so if I'm really generous in the district of Columbia and you live in Virginia Maybe you'd move to DC to take advantage of the more generous social policy regime My reading of that literature is that there's there's very weak evidence that that's an actual problem Policy makers who I've interacted with have more so voiced concerns about city-level policies maybe including DC's emergency shelter Law basically particularly during cold cold weather days If you are not housed if you're homeless you are guaranteed Some some housing benefit or provision Again, I don't know that there's actually evidence that there's serious welfare migration there But but nonetheless in response to this on the one hand we we try to think about people who are in the sample all 14 years But there's concerns that this is kind of overly restrictive right These are kind of things that you think about when you're doing this sort of research Okay so Couple things to kind of call your attention to here Like I just mentioned this balance versus unbalanced data. They really are different samples And importantly if we call attention to the first two columns the first point to make is that you think about Mean income and earnings that you would see at the national level At the mean end median DC looks quite a bit better You can see that in the mean statistics for adjusted gross income or earnings You got very high earners And you could you could start to tell stories about kind of the lawyer lobbyist class in DC That that are driving up that mean relative to what you would see in a typical metropolitan area right Doesn't look as distorted at the median but but nonetheless You know we see there's pretty stark differences here If we look at these sample statistics for so-called single-parent households either again the head of household filers Comparing across groups, you know, the first thing you see is that well, you know In general most filers aren't receiving much if any ITC But when we restrict to this kind of sample group of interest we start to see that, you know on average Federal and and city level EITC receive does start to jump up a bit As we would expect right but the main takeaway here is that we're talking about a pretty advantage sample overall But amid a city where we've typically had steady state poverty of about 20% So there is a quite a bit of income inequality in the city Pockets of poverty east of the river a large worker base that does Perform services in the service economy food service economy so on so forth married households really don't Have nearly as much meaningful EITC Credit levels They do participate, but the levels tend to be far far lower and And so this is just a sample where if anything You know, I know it's a bunch of numbers, but that's pretty big for a for a seat, right over $200,000 Whether you're looking unbalanced or balanced So that's the quite a fluent part of our sample in general We also show the sample statistics for tax filing units that are below the the middle of the earnings distribution and and we think of this as an important group to isolate Mainly because when we're thinking about some inequality reduction, and I'm gonna show you some basically some rank rank changes Along the distribution later on You'd be worried that if you're just looking at overall any quality reductions say The difference in incomes and earnings between the 90th the top of the earnings or income distribution versus the 10th that Even with a really generous social policy intervention I mean, you know, I'm showing you these these statistics for AGI and earnings You're not going to move you're not going to move the needle that much on the 9010, right? So thinking about how we maybe compare the relative performance of EITC recipients as Compared to the middle of the earnings distribution And again, you can see that the middle And in my own view starts to look a bit more like America frankly You know at with respect to AGI adjusted gross income and earnings Okay, so first off one of the things we find just looking over the period is that The EITC is providing something on the order of five to six thousand dollars of benefits if we kind of pool all the recipients together And you know thinking about what this means as a as a subset of overall earnings It's it's quite substantial and if you kind of Call some attention to this orange bar Running through as you see it getting a bit thicker You know, this is kind of concurring with the federal Credit moving up a bit, but also importantly those city level expansions that I was talking about earlier Those are occurring in the data as well a Similar snapshot if we focus on again single parents, I'm using the head of household tax definition here you get Two conclusions here like I kind of showed you before that largely the Impacted tax unit are these head of household single parent filing units You know, there's something else. I want to mention while I'm on this slide And it'll it'll come up a bit later. I think but while I'm thinking about it The the tax data allow us to leverage a lot of interesting information Including across the city We do know from the American Community Survey current population survey That the the modal EITC recipient is a black woman with children who's working This is consistent with the demographics of DC DC Just stopped being majority black maybe within the last year or two It's still the largest racial group within the city but one of the challenges with this Research endeavor using the tax data is that you know on the one hand We have quite a bit of confidence in the earnings and incomes that people are reporting But then on the other hand we don't have interesting demographics And so in a lot of my work, I'm using the secondary data sets and oftentimes I prefer those because you know I care about the demographics. I care about maybe the reported educational attainment of the individuals and families You know care about a whole range of other issues and Self-reported characteristics that the family might bring to the surveyor and that's That's not contained in this data. So there's things that we can do that are nice, but there are limitations and so You know the research team we view this as you know, we're one piece of the puzzle kind of trying to triangulate around What's going on in DC? We can't do it with one data set though. So this is just one piece of the puzzle Here we're following a method that Pat Bayer and Kerwin Charles implemented and looking at basically cross-race earnings and equality and basically here what we want to do is think about EITC recipients and put them in the bins with respect to people who are receiving anywhere from the smallest to the largest EITC credits and we want to understand Whether and how that EITC credit move then moves them up the rank If we were to list people from lowest earner to highest earner, right? And so in this exercise We're doing it for our two data sets of interest the balanced and the unbalanced and as I was saying before These really are different samples and So in this case what I'd like to call your attention to is that for the largest EITC credit On average you're moving people three percentile points in the balanced panel These are folks who are forced to live in the city in our data Kind of criteria in 14 out of 14 years And then in the unbalanced panel we're actually moving them five percentile points And so, you know, this is non-trivial and yet at the same time As I mentioned before we might Still think that that's not quite the right Distribution to think about in terms of whether and how the EITC is moving people up that earnings rank And so when we just cut that sample off to be an adder below 50% of the earnings distribution when we really focus attention on Folks who are receiving the largest EITCs We see anywhere from a five percentile point move to 11 percentile point move Up the earnings distribution So again, part of what we're trying to get a feel for in this exercise It's just the different ways in which the EITC is having this inequality reduction Right, and so clearly what's happening here Then is that you have people who are receiving generous EITCs Who are then moving a bit above people who are just outside of qualifying for the credit, right? And All the while as you're listening me present this it's worthwhile considering that Unlike say a monthly cash benefit or monthly SNAP benefit I haven't done my taxes yet actually You get it at tax time And you might get a little bit before tax time if you use a tax preparation service But this is lumpy and so if you're thinking about consumption smoothing thinking about sort of broader sort of well-being implications even as I'm showing you some I think You know important inequality reductions it it's not necessarily clear if We prefer the lumpy to the smooth There's been some interesting qualitative research That's documented the fact that in many instances Families love receiving the credit as a lump sum and that it feels like precautionary savings It's an opportunity to frankly feel like you did save paid out some important expenses So there's been a lot of good work in this area kind of thinking about Whether it's actually better to think about this In some sort of smoothed-out context, maybe we'll talk about that a bit more in the in the Q&A Okay, so I'm gonna show you now what are more like sort of standard inequality trend figures a lot of people would put up a The GD coefficient or a tile You know, this is a bit more transparent just comparing earnings at the 50th Middle of the income earnings distribution relative to the 10th percentile of the earnings distribution Doing the 50th percentile the earnings distribution relative to the 25th And so if we call attention to the to the blue trend the top one comparing blue to orange is just thinking about This 50-10 ratio before accounting for the DC and federal EITC and then after So like this is doing what you expect it to do. There's an inequality reduction It might be a bit subtle from the seats, but the inequality reduction Starts off and holds at around 15% But then that that gap closes to more like 12% by the end of the period And then importantly you see some evidence of some overall trend increase in inequality occurring Note to that the reduction from 50 to 25 pre and post EITC is You know pretty trivial about 2% But where we've begun to push and I think we're going to do more interesting work is to kind of think about what's going on within the city And I think there's a lot of work that is now acknowledging whether it's The opportunity insights group. They're not the first Just acknowledging substantial heterogeneity or sort of diversity within an area, you know, it's very knee-jerk sometimes to talk about, you know the north versus the south or you know Durham, North Carolina Versus Fayetteville where Fort Bragg is You know actually some of the interesting variation is within Durham County Pockets of poverty near downtown not far from Duke University Parts of suburban Durham that are quite affluent and have residents who work in the Research Triangle Park These differences matter in DC they matter We see Inequality reduction from the earned income credit in what is really the more affluent part of DC the west part And also pool some parts of northeast DC, but we still see the the overall trend increase in inequality When we compare to those Wards seven and eight that I highlighted at the outset a couple things jump out first of all In this pretty transparent measure of inequality You learn that one Inequality is just lower overall In these poor relatively poorer or you know moderate income parts of the city The post tax or post EITC inequality reduction is also Larger and sort of absolute percentage terms as well That's both the case for the 50-10 and the 50-25 So, you know in a sense I told you that this was a big refundable tax credit In some respects, this is doing what you might expect it to do Now again another piece running in the background is that you know I described wards seven and eight as poorer On the other hand Ward seven and eight. It's likely to be where many of us in this room could afford a house Maybe if we were to try to move to DC right now So you've got a lot of economic transition occurring in that side of the city And you got to be careful painting with too wide of a brush But nonetheless there are certainly census tracts that have relatively deep and persistent poverty Okay, so you know I want to close out with two additional figures here There's a report that came out just today in the Washington Post more or less Saying what I think a lot of us social scientists have known which is that DC's experience quite a bit of neighborhood transition And in fact, it's just hiding over the last couple of years co-author Dan Mohamed Put together this really interesting graphic and the main point to make is that at the outset of the earned income tax credit in 2001 you still saw quite a bit of EITC use in Ward seven and eight This is a bit subtle here But if you look at by the end of the period what you'll notice is that Even more EITC use has moved East of the river and so again this is kind of consistent of what you would think which is that if people do want to stay in DC They are moving to the relatively more affordable side of the city. This also has all sorts of interesting implications about sort of geographic access to jobs When most of you visit DC You will stay at hotels and eat in restaurants that are more likely to be in the West Maybe northeastern part of the city So a lot of the job opportunities are going to be across town as well. So we see this shifting of low and moderate incomes The last thing I'll show you is that the likelihood of actually receiving the EITC has dropped from almost 20% likelihood to just over maybe 12% So again, this is sort of evidence that in the overall sample a low or low proportion of the filing universe or even qualifying for this in the first place So this is also some descriptive evidence Again, it doesn't paint the whole picture But it's certainly consistent with the notion that just the overall composition of the city is changing quite a bit And it's something to keep an eye on This is actually an interesting one that the team kind of wants to push a bit further on okay, so We talked about inequality and the role of the larger EITC as a result of DC supplement This is just inside of $9,000 at the max Back in 2014 and I showed you that we did see some post CITC inequality reduction But nonetheless, it's rising throughout the city overall In terms of some future work that we're thinking about, you know at the outset I kind of described for you that we really had these two stark choices that we made For folks who were concerned about welfare migration. We made this decision to restrict the sample to people who were in 14 out of 14 years On the one hand that might also be a bit too restrictive So we also have some samples where we basically don't impose that mobility restriction So we're thinking about something in the middle and I was actually talking with Luke about this Maybe it's five years. Maybe it's six years in sample. We're playing with these these sorts of decisions The other piece is that you know, we've got a series of regression models That we've been working with For months and months now, but we've really been thinking about hard sort of what do we think we're picking up a Particularly given the last slide that I showed you where the composition of the city itself is actually just shifting quite a bit and So, you know The team we've been talking about some other approaches Maybe like simulated instruments and that's sort of a fancy way of saying if we could sort of take a snapshot of tax filers and residents at the beginning of the period and then more or less simulate What we think they would look like in 2014 after receiving These benefits that might be an interesting way to kind of think harder about What this sort of policy is doing with respect to income growth? So that's kind of a side from the inequality stuff I showed you And then finally we just want to continue to push this sort of neighborhood context you know that I'm telling you about and these these maps and so not just thinking about inequality but differences in crime interactions with TANF policy and minimum wages DC is also going to a $15 minimum wage by 2020 2021 So I've got some separate work looking at that Interestingly in some of our forecasting models, we do show that the EITC along with Minimum wages is a net net benefit. You might reduce the EITC a little bit But on balance those workers tend to be better off overall So, you know, again, we're trying to push in these directions last slide and Just to kind of consider that You know We do see inequality reduction here. I'm a little more circumspect about the increase in income And I didn't even really talk much about those models. I didn't show those a bit more circumspect there But I think it's worth considering that, you know, the EITC is quite popular Sort of on a relatively bipartisan basis if I'm going to generalize Many liberals or progressives like it because it's sort of a wage supplement wage subsidy Many conservatives tend to like it because it it promotes work and only goes to people who are working in the first place ostensibly But how do you compete with cities where there's really pronounced a cost of living issues, right? And in that sense for a subset of the population That's not really receiving much in the way of historical earnings growth Like, you know Ford grads are going to go out and on average you're going to see a rising earnings profile But a lot of folks who are operating kind of at the the lower earnings end of the of the labor market Important work, but work that's not paying as much These sorts of supports like EITC look increasingly permanent It's kind of a permanent part of the package that people have and then again just a reminder that This is a pretty generous benefit that you have no access to if you're not working in the first place So it's a qualified yes in terms of inequality reduction but in our view with quite a few caveats, so That's the project. It's multi-year. There's a bunch of different things you're trying to do So, you know the questions and suggestions are are not only helpful But they would they would enter into the sorts of things we want to improve upon so thanks Thank you so much For coming and speaking to us today and thank you to close up and poverty solutions for hosting this event My name is Amara and I'm a graduating masters in public policy student here at the University of Michigan And we've got some really interesting questions from the audience. So I think we're going to move on to Q&A Okay, so the first question that the audience has posed to you is If you have any data on how many tax filers who would actually be qualified for the EITC But end up not taking advantage of it. Yeah, so a question. So I Do not have that number for the district of Columbia But nationally there's been some good work. I want to say Maggie Jones. Yeah, so Maggie Jones has this work I'm looking at Kathy Mikkelmore who does a lot of EITC work also among others But I think it's around 80 percent that that actually are participating and that's at the national level and if you think of the EITC as a social program and that could be your own argument it's Administrative tax system, but 80 percent looks, you know, quite good relative to other other welfare programs Hi, my name is Ryan Ruggiero my first year master public policy student Next question There's evidence of a lot of low-income workers in Michigan that they don't know they're eligible for the state's EITC Would there be any way to use the nudge movement to have these people default into claiming the EITC? That's interesting. So, you know, again, this is I'm going to answer Kind of like the question I wish I was asked here, right? So I think there's a lot of people who would wonder about a regime where We had a tax system that really kind of automatically took care of this for people So, you know, just in general like you think about being automated into savings A tax system where you you weren't really having to go in and make that that filing choice I would say that for Michigan and the other states There are interesting questions about Non-profit outreach So many of you are going to go to work in nonprofits Many of the nonprofits in DC Engage in very aggressive outreach billboards on buses so on and so forth free tax preparation That that moves the needle quite a bit on getting people to know that they qualify for this benefit Another issue which again, it's it's kind of a splashy topic right now, but to the degree that you have people who are engaged in It's not 1099 work necessarily, but it's it's contract work or whatever the form on the you know Contract work gig economy work That is growing. I think it's easy to overstate the degree to which that's a factor But you do have this complexity where you know on the one hand if you have your your big box employer Who's sending you the forms they might even have folks who are letting you know that you qualify for the EITC If you're on your own You may or may not know this be aware of it. So I think that's also kind of a running issue Those are the sorts of things you'd want to confront To get participation up Yeah The next question At 6% michigan's EITC is very small When compared with DC's 40% is there a low point cutoff where an EITC policy just isn't even worth it Or are there other benefits to having an EITC policy even if it falls at a lower rate? So my own view and I think opinions would vary here, but my own view is that I mean If the EITC is offsetting tax liability for for low and moderate wage workers That still seems like sensible public policy And if you have that architecture in place, I mean i'm a fan of the policy So if you have that architecture in place Then it can be ratcheted up over time, right? So, you know, my own view is that look there's a political economy process that we're operating within And you guys are what 20% at one point So You know six is less than 20, but I think it's still it still matters I do think that it starts to raise an interesting question about A program that's now defunct called advanced EITC So advanced EITC was giving filers the option to receive the earned income credit more or less on a monthly basis My sense is that it wasn't heavily hiked. There wasn't a lot of information about it So there's quite a bit of low participation. I mean, I'm depending with the wide brush here, but It might raise the question about whether or not at sufficiently high or low levels Do some families then maybe prefer figure? Well, you know, this isn't that big of a bump at tax time Maybe I do want to kind of smooth out on the order of You know 25 bucks a month or something like that. Maybe I'd rather have that so I don't think six is too small to be meaningful No six is greater than zero In your earlier map some of the poorest states in the country in appalachia west virginia mississippi For example, uh looked like they did not have the EITC Credit at the state level. Do you know why that is? And as a follow-up, do you have any advice or best practices? You would suggest to these states who would want to implement an EITC or states who would want to improve their credit Yeah, so I don't know that I'll I'll lend Think about how I want to say this. I mean, this is consistent with A range of social policies That in the labor market context kind of skewed towards being a bit less generous. So this would have a broader conversation about You know sort of unionization worker protections wage theft minimum wages EITC And if you were pretty confident about this if you would kind of run that that very parsimonious regression on where are the states that have higher minimum wages above the national average States that have supplemental EITCs The south is going to come in as a negative there so That's just kind of how it's been I think that As far as Guidance goes. I think that at the same time You've got the EITC as being a relatively popular social policy intervention across The ideological spectrum If you looked at Paul Ryan's big poverty Recommendation plan from maybe two or so years ago He speaks glowingly about EITC expansions and so Think what you will about the the Ryan opportunity grants and that idea Um It does signal that among the things you might find some support for Any EITC could have some relative traction I guess the other point to make though is that there's substantial heterogeneity within the southeast And so I mentioned here that Montgomery County, New York City, they have EITCs It's worth mentioning that There's cities that are trying to do minimum wages There are probably cities within the south Birmingham comes to mind that tried to do this They actually got shot down by the state legislature. I guess I mean to say that The tax base may or may not be designed for a city to do this But I do think that there's substantial kind of diversity of thought within the southeast such that you you probably do have quite a bit of support for this Just a matter of whether or not you can get that done through a Through a governor and a legislature So you showed us earlier a graph that depicted a decrease in inequality For those who earned more it earned more because of the EITC What are your thoughts on how it has impacted affordability? And has there been has the gap in affordability, especially when it comes to housing and food? At all been reduced because of the EITC So I think that in dc We don't know this is the kind of thing that you know the research team we want to do more work on a subset of the team did Do a study on this back in 2016 we were specifically trying to understand Whether the combined EITC dc and federal reduced basically mobility out of a a transitioning neighborhood Secularly people would refer to it as gentrifying neighborhood and we basically found that the answer was no the credit doesn't seem to buffer against You know low and moderate incomes moving out of these these neighborhoods that are getting more and more expensive So and I think this is consistent with the the scale of price increases so Many of the professoriate in washington dc don't actually live in washington dc and You know housing benefits are not an entitlement So just because you qualify for a voucher doesn't mean you get one and there's big housing affordable housing shortages in dc mayor bowser was just proposing to Ratchet up money into the sort of the housing assistance fund from 100 million to 130 million And while that sounds like a big number What it translates to translates to in terms of actual units and There's more work to be done there. Yeah Good questions Are undocumented workers eligible for EITC? And if so, how do they claim it? That is a good question That I am actually not sure about And so that's one of those that thank you to the audience or someone online. I'm going to go back and look into that one I mean from the purposes of the tax office, they need a valid tax idea or social So it's You know, you can't rule out in a sense that That this is coming to folks. Um, but but i'm not sure. Yeah, it's a good question DC recently eliminated its 60 month time limit for tanf recipients How should the city prioritize efforts to expand safety net programs like tanf and the eitc Which may serve different populations sure well I mean, I think in part DC and the other states let's let's let's pretend DC is a state right now Uh, the dc and the other states are also constrained by federal tanf policy that hasn't done much to update the size of the actual block grant itself Um, and so if you think about what these block grants look like in 1996 dollars that they've really not Uh, gone up much of it all they haven't had you know, we keep on pushing tana for form You know down the road a bit further right and kicking the can So, you know part of my response is that you know part of dc's ability to do more For its residents through these programs is also tied to having a You know a tanf program that kind of allows for the resources there That's said I like the fact that relative to other states dc tends to In my view put quite a bit of the the block grant into actual cash assistance Kind of a again. I was alluding to this earlier Many states after 1996 maybe especially the late 90s If you looked at the proportion of the block grant allocated to the so-called basic assistance That's actual cash Many states went from allocating 70 or 80 percent to basic till well under maybe 20 15 percent Nice work by uh, marianne bitler and hillary hoins looking at this in a hamilton paper. So I guess what i'm saying is I think dc's doing relatively well On tana. I think they're doing relatively well on eitc My own opinion is that kind of the missing link here is housing and and so This isn't a paper about housing But the the questioner questioner rightly notes that How did these things all work together? I think and there's four people here who would speak to this Even more authoritatively In general we're getting out of the business of Running public housing in the u.s. More voucher based systems many of the low low-income and affordable housing Interventions who work with You know private developers and so you get these deals where you had a You had a plot of land where maybe a hundred low-income workers Had housing and with the new development Oftentimes it'll be some some sub component of that maybe maybe 30 maybe 50 right so You worry about that sort of piece. So, you know, if I had to wave a wand that's a Big focus on affordable housing would be key Single mothers experience meaningful costs associated with working which as we know is a requirement for the eitc Including transportation and especially child care costs, which are very high Is the benefit of the eitc large enough to offset these costs? I don't think so. By the way, these are like really hard questions I don't think so though. Um, I think that this is one of these examples where metaphorically um, you know Advil's a great medicine Advil is not going to solve your broken ankle though and sometimes like Metaphorically meaning that we push something to do more than it's designed to do Again, tana for form. We could do more on cash assistance. Housing right now is not an entitlement You could think about some interesting proposals One from Jim Ziliak at Kentucky Also a hamilton project paper Where he proposes bumping up food stamp benefits snap benefits and he links it to Higher transportation costs that the the food basket and calculations for how we design snap It's really thought of in a time period when more families Poor and non-poor we're going to do more and more food preparation at home Uh commuting times are probably a bit lower. I mean stylized Kind of fact in dc. There's been some great kind of research and reporting Looking at you know people who ride this popular bus line 16th street and these are kind of second and third shift workers and they document how Folks are taking two and even three hours to get home in maryland So I think that the answer is No, the eitc in my opinion isn't enough But there's other programs that could be beefed up to maybe meet that need Given that The eitc necessitates that the beneficiary work It often leaves out people who often don't have the resources to find work And by extension cannot receive eitc benefits Are there ways that we can improve on eitc or rebrand it reframe it Restructure it so that those who consistently look for employment opportunities But don't find them Can receive the help they need Yeah, no, I think that's a great question. And again You all were here as witnesses. This is not a talk about tana, but nonetheless I do think this is another case where Cash welfare pro the traditional welfare program temporary assistance for needy families That question to me Really kind of maps into things that that program can do so for example What are the structures in place to allow for and provide for job training right now? It's something like typically 12 months of education Can be counted as a work activity and if you start to think about Some of the certificates that people could sort of actionably get into to increase their work readiness for You know sort of a high quality job Some of them might take a bit more than 12 months What type of safety net do we provide for job training right now? Believe it or not You don't have a lot of coordination in all states between what's called wiowa within the department of labor they provide sort of educational opportunities and job training for Disadvantaged workers economically disadvantaged workers. You don't have a lot of coordination with TANF in some states and You know, I've argued this in a little policy brief from a few years ago If you think about your own story You or maybe some of the friends you had did benefit from Scholarships maybe family and friends Who would even provide some safety net While you were training and upgrading your skills. Maybe you have access to student loans So I think that part of the question about How we get people who are not working into work involves bringing the bear the TANF program Using that in innovative ways And there's also been some interesting work Including some stuff out of AEI Where the policy prescriptions for TANF even include jobs of last resort So, you know There's been a lot of talk about federal job guarantees among other kind of progressive policy interventions This isn't that but it does kind of get at the questioner's point that You know, what do you do for people who maybe are discouraged who are like trying to work? But they're having a hard time finding it So I think it's a great question Thank you so much for all your responses today. We have one final question What are possible drivers of increasing inequality starting in 2009 in the balanced panel? So I think this is something We don't know for sure If you think about 2009 nationally you have Kind of the core of the big economic recession That was occurring in the country And yet DC Do in part federal stimulus Really didn't experience the recession In that way At least in the city And in fact, you could maybe argue that there was there were more resources ramped up In the city at that time period But I also think this is where a standard economic model kind of struggles to fully account for the fact that you had rapid development of other amenities Restaurants housing, there's just been a broader secular move to the city And that's not just DC. That's um, that's all sorts of cities throughout the country and and so with that said This sort of set into motion In my view at least part of the inequality story And so I think part of that is just a broader move back to cities But I would also argue that Given our interest in the inequality trends, like this is something we actually want to help with and want to understand better So it's a great question Okay Except for the sparty reference I couldn't help it Yeah, thank you all