Young Adult Choices and Poverty Reduction Ron Haskins Senior Fellow, The Brookings Institution Senior Consultant, The Annie E. Casey Foundation February 19, 2013
Overview • Trends in Poverty and Inequality • Why Are Poverty and Inequality So Stubborn? • Government Spending and Poverty Impacts • Pathways Out of Poverty and Inequality • Education • Family Composition • Work
Poverty Rates for All Children, Black Children, and the Elderly, 1959-2011 Beginning of War on Poverty Note: Poverty rates for black children from 1959-1974 are for black children in related families because data for all black children is unavailable over this period. Source: Census Bureau, Poverty Division, CPS ASEC, "Table 3. Poverty Status of People, by Age, Race, and Hispanic Origin: 1959 to 2011.”
Post-tax, Post-transfer Income in Thousands of 2007 Dollars, by Income Quintile, 1979 and 2007 (16%) Source: Congressional Budget Office, “Average After-Tax Household Income,” available at http://www.cbo.gov/publications/collections/collections.cfm?collect=13. Comprehensive household income equals cash income plus income from other sources, including in-kind benefits. Note: The numbers in parentheses are the percent increase in income between 1979 and 2007.
Percentage of Men with Fathers in the Bottom Fifth of the Earning Distribution that Remained in the Bottom Fifth, by Country Source: Markus Jäntti and others, “American Exceptionalism in a New Light: A Comparison on Intergenerational Earnings Mobility in the Nordic Countries, the United Kingdom, and the United States,” Discussion Paper 1938 (Bonn: IZA, 2006), table 4, p. 18, and table 12, p. 33. Notes: Sons were born around 1958, and earnings of both fathers and sons were observed near age forty. Sons’ earnings are generally measured between 1992 and 2002.
Why Are Poverty and Inequality So Stubborn? • Work Rates • Wages • Family Composition • Education • Other (Immigration, Technological Change, International Competition)
Federal Means-Tested Spending on Biggest Programs, 1962-2011 (Constant $2011)
The Impact of Taxes and Transfers on Poverty Rates Among Single-Parent Families Source: US House of Representatives, Committee on Ways and Means, 2008 Green Book, Appendix E, Table E-31. Note: The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are refundable tax credits designed to help lower income families, particularly single parent families.
Median Family Income of Adults Age 30-39 by Education Level, 1963-2011 Source: Income Figures from Brookings tabulations of data from the Annual Social and Economic Supplement to the Current Population Survey, 1964-2012. Adjusted to constant dollars using annual averages of the CPIAUCNS from FRED (https://research.stlouisfed.org/fred2).
Chances of Getting Ahead for Adult Children With and Without College Degree from Families of Varying Incomes Note: Income adjusted for family size. Source: Pew Economic Mobility Project, Pursuing the American Dream: Economic Mobility Across Generations, July 2012, Figure 15.
Trends in Performance on the National Assessment of Educational Progress (NAEP) for 13 Year Olds, 1971 or 1978 to 2008 Note: NAEP Scores are on a 0-500 scale. Scale scores for 2004 and 2008 use the revised assessment. Source: U.S. Department of Education, Institute of Education Sciences, National Center for Education Statistics, National Assessment of Educational Progress (NAEP), 1978, 1982, 1986, 1990, 1992, 1994, 1996, 1999, 2004, and 2008 Long-Term Trend Mathematics Assessments.
Students in the U.S. in International Comparisons, 2009 Out of 64 countries, the US: • Tied for 24th (with 12 others) in Mathematics • Tied for 19th (with 13 others) in Science • Tied for 10th (with 16 others) in Reading Various countries that scored higher than the US: Slovak Republic, Estonia, China, Japan, Slovenia, New Zealand, Finland, and Iceland Source: Department of Education, Institute of Education Sciences, National Center for Education Statistics, “Program for International Student Assessment (PISA) 2009 Results,” (http://nces.ed.gov/surveys/pisa/pisa2009highlights.asp).
Education Investments • Preschool • Average quality • Head Start • K - 12 • Teacher quality (Race to the Top) • i3 (Foundation Registry) • Literacy • Post-Secondary • Employment and training • Community college • Four-year college
Percent of Births to Unmarried Women, 1940-2011 Note: Data for 2011 is preliminary. Source: CDC, National Vital Health Statistics.
Percent of Children Living with Mothers Only, 1970-2011 Source: U.S. Census Bureau, Living Arrangements of Children, Table CH-1, available at http://www.census.gov/hhes/families/data/children.html.
Differences in Non-marital Births by Mother’s Education and Ethnicity Never-married Mothers, by Education, 1968-2008 Non-marital Births, by Ethnicity, 1970-2010 Source: (Education) Authors' tabulations from the March Current Population Survey; (Ethnicity) Source: National Center for Health Statistics, Table 1-17 Number and Percent of Births to Unmarried Women, by Race and Hispanic Origin: United States, 1940-2000; Rest of Data from National Vital Statistics Reports, Births for each Year, see http://www.cdc.gov/nchs/nvss/new_births.htm.
Family Dissolution During the First Five Years After the Birth of First Child 13% Source: Original analysis by the National Marriage Project (UVA) using National Survey of Family Growth data from 2000-2005.
Poverty Rates for Children in Female-Headed and Married-Couple Families, 1975-2011 Source: U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2011, Historical Tables, Table 4.
Investments in Family Composition • Reducing teen pregnancy • Reducing unplanned births for young adults • Encouraging marriage • Male employment • Churches and civil society
0 Norms 77% 4% 1-2 Norms 30% 23% Poor (< 100% poverty level) Middle class and above (> 300% poverty level) 3 Norms 2% 72% What Accounts for Success? Income Class, by Adherence to Social Norms, 2007 • The Three Norms • Complete high school • Work full time • Wait until age 21 and marry before children Source: Authors' calculations based on the U.S. Census Bureau, Annual Social and Economic Supplement to the Current Population Survey.