204 research outputs found
Segregation and the Black-White Test Score Gap
No full textThe mid-1980s witnessed breaks in two important trends related to race and schooling. School segregation, which had been declining, began a period of relative stasis. Black-white test score gaps, which had also been declining, also stagnated. The notion that these two phenomena may be related is also supported by basic cross-sectional evidence. We review existing literature on the relationship between neighborhood- and school-level segregation and the test score gap. Several recent studies point to a statistically significant causal relationship between school segregation and the test score gap, though in many cases the magnitude of the relationship is small in economic terms. Experimental studies, as well as methodologically convincing non-experimental studies, suggest that there is little if any causal role for neighborhood segregation operating through a mechanism other than school segregation.
When Are Ghettos Bad? Lessons from Immigrant Segregation in the United States
No full textRecent literature on the relationship between ethnic or racial segregation and outcomes has failed to produce a consensus view of the role of ghettos; some studies suggest that residence in an enclave is beneficial, some reach the opposite conclusion, and still others imply that any relationship is small. This paper presents new evidence on this relationship using data on first-generation immigrants in the United States. Using average group characteristics as instruments for segregation, controlling for individual characteristics and both metropolitan area and country-of-origin fixed effects, we estimate impacts of residential concentration that vary with group human capital levels. Residential concentration can be beneficial, but primarily for more educated groups. The mean impact of residential concentration varies across measures, which may illuminate some of the causal mechanisms relating segregation to outcomes.
The Academic Achievement Gap in Grades 3 to 8
No full textUsing data for North Carolina public school students in grades 3 to 8, we examine achievement gaps between white students and students from other racial and ethnic groups. We focus on successive cohorts of students who stay in the state's public schools for all six years, and study both differences in means and in quantiles. Our results on achievement gaps between black and white students are consistent with those from other longitudinal studies: the gaps are sizable, are robust to controls for measures of socioeconomic status, and show no monotonic trend between 3rd and 8th grade. In contrast, both Hispanic and Asian students tend to gain on whites as they progress through these grades. Looking beyond simple mean differences, we find that the racial gaps in math between low-performing students have tended to shrink as students progress through school, while racial gaps between high-performing students have widened for black and American Indian students.
The New Promised Land: Black-White Convergence in the American South, 1960-2000
No full textThe black-white earnings gap has historically been larger in the South than in other regions of the United States. Since 1970, however, the male annual earnings gap outside the South has increased %u2013 dramatically, when the analysis factors in non-participants %u2013 while the gap within the South has narrowed, to the point where 2000 Census figures indicate significantly lower racial inequality in the South. Three proposed explanations for this trend focus on changing patterns of selective migration, labor market trends including reduced discrimination and the decline of manufacturing employment, and reductions in school segregation and school resource disparities in the South relative to the North. Evidence suggests that selective migration can explain about 40% of the South%u2019s relative advance, and virtually all of the relative advance after 1980. Earlier declines can be attributed in large part to reduced industrial segregation and other labor market advances in the South. Relative improvements in school quality for Southern blacks explain at most 20% of the overall trend.
Teacher Credentials and Student Achievement in High School: A Cross-Subject Analysis with Student Fixed Effects
No full textWe use data on statewide end-of-course tests in North Carolina to examine the relationship between teacher credentials and student achievement at the high school level. The availability of test scores in multiple subjects for each student permits us to estimate a model with student fixed effects, which helps minimize any bias associated with the non-random distribution of teachers and students among classrooms within schools. We find compelling evidence that teacher credentials affect student achievement in systematic ways and that the magnitudes are large enough to be policy relevant. As a result, the uneven distribution of teacher credentials by race and socio-economic status of high school students -- a pattern we also document -- contributes to achievement gaps in high school.
Federal Oversight, Local Control, and the Specter of "Resegregation" in Southern Schools
No full textAnalyzing data for the 100 largest school districts in the South and Border states, we ask whether there is evidence of "resegregation" of school districts and whether levels of segregation can be linked to judicial decisions. We distinguish segregation measures indicating the extent of racial isolation from those indicating the degree of racial imbalance across schools. For the period 1994 to 2004 the trend in only one measure of racial isolation is consistent with the hypothesis that districts in these regions are resegregating. Yet the increase in this measure appears to be driven by the general increase in the nonwhite percentage in the student population rather than policy-determined increases in racial imbalance. Racial imbalance itself shows no trend over this period. Racial imbalance is nevertheless associated with judicial declarations of unitary status, suggesting that segregation in schools might have declined had it not been for the actions of federal courts. This estimated relationship is subject to a lag, which is in keeping with the tendency for courts to grant unitary status only if districts agree to limit their own freedom to reassign students.
THE EFFECT OF THE FIRST-TIME HOMEBUYER TAX CREDIT ON HOME PRICES IN LOW AND MODERATE INCOME COMMUNITIES
No full textThe Center for Responsible Lending (CRL) is a Durham-based organization that works to promote homeownership and economic opportunity for low and moderate income communities and communities of color, which traditionally have been underserved by financial markets. Because of the steep decline in housing prices across the country, but especially in low and moderate income communities, CRL is interested in examining policies that can support housing prices in order to protect homeowner equity.
The First-Time Homebuyer Tax Credit was a program that made a maximum 8,000, this amount would represent a larger share of the purchase price of lower priced homes compared to higher priced ones. When we see a house bought/sold during the Credit, in markets with relatively inelastic supply, we would expect the incidence of the Credit to go to sellers, as they would command a higher price. In markets with relatively more elastic supply, we would not expect prices to rise as much, and as a result, home buyers would gain relatively more from the Credit.
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Specifically, this paper examines the effect that the Credit had on houses prices in 16 major metropolitan areas before, during, and after the Credit. Through descriptive analysis, we see that these 16 metropolitan areas saw very different price movements before, during and after the Credit. In some markets, notably those that saw very high growth in the run-up to the housing crisis (e.g. California, and the Southwest), saw a steep decline in prices leading up to the Credit, and big jump during the Credit, and continued steep decline after the Credit. Other markets saw much more tempered price movements throughout. Also, some cities saw very different price movements based on the price tier. For example, the low price tier in Minneapolis saw a significant increase during the Credit period, but a much smaller increase in the middle and high tiers of the market. Overall, prices moved very differently depending on the city and market segment.
I then turn models that control for other factors that may be influencing house prices, such as employment, income, population, and supply side constraints like housing permits and starts. Although the results vary base on the specific model used, this analysis concludes that the Credit did indeed have a significant effect on prices. Generally, the strongest effect of the Credit can be seen in the lower priced segments of the housing market, as the Credit represented a larger share of the purchase price of these types of houses. However, mid- and higher priced markets also generally saw an increase in price associated with the Credit. However, the effect of the Credit was short-lived. When the Credit expired in May 2010, house prices continued their decline. In short, it appears as though the Credit stimulated short term demand for housing, and may have increased the supply of housing, as well.
One notable finding is that the increase in prices appears to be fairly significant, and perhaps, much more than we would expect from simple economic theory. This may indicate that
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homebuyers were motivated to get the Credit just for its own sake, even though in some cases, they may have been better off waiting for the market to cool, and for prices to fall even further
Household Willingness to Pay for Improved Energy Efficiency in the U.S. Rental Housing Market
No full textIn the United States, the built environment is responsible for nearly 37 percent of the nation’s total energy consumption and around 70 percent of its electricity use. Residential buildings account for almost 21 percent of GHGs emitted in the U.S. Approximately 30 percent of homes in the U.S. are rental units and over 98 million U.S. residents are renters. This number is expected to increase by 360,000–470,000 annually between 2010 and 2020. Therefore, successful strategies for reducing energy consumption and GHG emissions must address energy efficiency in the residential sector, including rental housing. In addition to environmental implications, residential energy inefficiency is an economic issue. Home energy costs have been rising over the last several decades. Because energy represents a significant portion of housing-related expenses, efficiency stands to play a large role in the future of housing costs for individuals and communities.
In the rental housing market, the split incentive problem is often described as a barrier to more energy efficient units. Landlords must pay the upfront cost for efficiency upgrades while tenants benefit in the form of reduced utility costs. However, in recognition of this benefit, tenants may be willing to pay a premium for their rent. If tenants are willing to pay significantly higher costs for more efficient housing,
incentives are not truly split. Rather, landlords and developers lack full information about their return on investment for improved energy efficiency. Conversely, if tenants are not willing to pay a premium for improved levels of energy efficiency, additional strategies will likely be needed to address the split incentive problem and reduce this market failure.
Hedonic regression results using a sample of 692,846 households participating in the 2010 American Community Survey suggest that households in the U.S. rental market are not willing to pay a premium for improved energy efficiency. Therefore, the split incentive problem represents an important barrier to overcome in order to improve energy efficiency in rental housing. Additionally, results suggest that there is variation in the value tenants place on efficiency for different segments of the rental market. Households living in larger rental units are willing to pay significantly more for improved energy efficiency than residents of smaller units. As a result of variation in household willingness to pay, improving efficiency in rental housing may require different approaches for different market segments. Developing effective solutions that reduce supply side and demand side barriers to improved energy efficiency will help to align incentives and regulate behavior to provide tenants with more energy efficient rental housing. Implications and strategies for Rocky Mountain Institute’s Superefficient Housing Initiative are explored
Incentivizing Responsible Small-Dollar Lending in Low-Income Communities
No full textPOLICY QUESTION: “Based on results of pilot programs and policies implemented in other parts of the country, how can New York City/State best support and incentivize responsible small-dollar lending in low-income communities?” RECOMMENDATION: Design a borrower’s card system to collect information about consumers’ borrowing and repayment behaviors, to encourage lenders to extend loans to low-income individuals in need, and to incentivize consumers to take ownership of their own financial behavior. PROBLEM STATEMENT: In many states, the payday lending market has operated to meet the strong consumer demand for short-term small-dollar loans. In the realm of small-dollar lending, the payday lending market provides access for low-income individuals who might be classified as higher risk consumers, likely due to blemished credit histories. Lenders compensate for this higher risk by charging a higher interest rate, which would allow for the possibility that the borrower does not repay the loan. However, though the payday lending market is competitive, significant information asymmetries exist for both the lender and the borrower, which leave lenders unable to discern between high-risk and low-risk consumers, and leave borrowers with an unclear understanding of the terms of the loans and often, with increased amounts of debt. The reliance on payday loans poses significant problems for borrowers, however. Research has shown that consumers often are unable to repay within a single pay period and thus have to roll over their loan for another borrowing period, and accrue another fee. Therefore, for many borrowers, what starts off as a short-term loan turns into long-term payments because of rollover and chronic borrowing patterns. Furthermore, within the industry, only a few states seem to have a standardized database housing information on borrowing and repayment history for payday loan consumers. The lack of a centralized system makes it difficult to keep track of where consumers are originating their loans, how often they are taking out payday loans, and their true ability to repay. More responsible loan programs are characterized by a variety of criteria to ensure access to credit without trapping borrowers in additional debt. These characteristics include annual percentage rate caps, extended loan terms, multiple installment payment plans, proper underwriting of loans based on a borrower’s ability to repay, and financial counseling or a savings component. The tension in designing an alternative program is in balancing consumer need and incentive, market failures in information asymmetries, and business profitability concerns in order to meet the demand for these loans while not encouraging or incentivizing unscrupulous or predatory behavior. CRITERIA: 1) Minimize risk associated with consumers’ ability to repay loans: This criterion aims to reduce the risk associated with a consumer’s ability to repay by either better assessing consumer riskiness or ensuring that whatever consumer risk does exist does not prohibit or limit the potential for the loan to be repaid. 2) Provide incentive for lenders to make loans with a positive expected value: A viable alternative will provide the incentive for lenders to rationally extend a loan by reducing consumer risk, allowing lenders to better examine consumer risk, or by guaranteeing that they will be compensated for the risk associated with the population they are serving. 3) Provide incentive for consumers to improve behavior: A viable alternative should provide a mechanism by which consumers choose to improve their own repayment behavior, in order to ensure lenders receive the return on the loans that they make and continue to provide access to the small-dollar loans. 4) Maximize sustainability of program implementation: Any recommended program design should consider factors of sustainability, such as cost considerations, simplicity of implementation, political pushback, or scalability concerns. ALTERNATIVES: The following alternatives provide plausible program designs for a responsible small-dollar lending program. Each alternative is weighted against the specific criteria identified above. 1) Use a referral process to provide loans to approved low-income and/or high-risk consumers. 2) Design a borrower’s card system to collect information about consumers’ borrowing and repayment behaviors. 3) Fund a loan loss reserve pool to back loans made to low-income and/or high-risk consumers
Essays on Food Insecurity and Food and Nutrition Assistance Policy in the United States
No full textThesis (Ph.D.)--University of Washington, 2021This dissertation investigates many facets of means-testing in the United States through the lens of public food assistance. In Chapter 1, I speak to the literature on “administrative burden,” or individual-level barriers to means-tested program participation. Previous studies debate the extent to which administrative barriers inhibit take-up of means-tested programs. I study two application streamlining initiatives intended to simplify the Supplemental Nutrition Assistance Program (SNAP) application process in the United States through the reduction of transaction and information costs. The two initiatives differ along the dimension of in-person versus mail-based interactions with clients. Using two-way fixed effects and alternative difference-in-difference estimators, I estimate an overall 4.3 percentage point (19.3 percent) average treatment effect of application streamlining on SNAP participation. Further analysis of the two implementation models suggests a stronger effect of in-person interactions with clients (25.8 percent), compared to off-site outreach (15.2 percent). However, different approaches appear to be more effective for different eligible populations: there is suggestive evidence that off-site outreach could have a stronger effect for population subgroups experiencing mobility-related barriers to take-up. As such, this study points to the importance of understanding the behaviors and barriers to take-up experienced by specific target populations when designing initiatives intended to improve enrollment in means-tested programs. In Chapter 2, I speak to current discourse around the association between household food insecurity and disability status. Disability is a known risk factor for food insecurity, even when accounting for household income. However, the mechanisms driving the relationship between disability and food insecurity remain underexplored. Using the National Household Food Acquisition and Purchase Survey, I test the extent to which food store choice (representing food access) mediates the association between disability and food insecurity in the United States. The analysis is complicated by the notion that food insecurity also influences food store choice. Nevertheless, multivariate regression findings suggest that food access is not a significant driver of high rates of food insecurity among households where disabilities are present. This chapter has been accepted for publication in Physiology & Behavior (Charnes, forthcoming).
In Chapter 3, I address questions surrounding the cause of the SNAP benefit cycle – a phenomenon in which SNAP benefits (disbursed on a monthly basis) are typically spent all at once within the first few days of receipt. The disbursement of Supplemental Nutrition Assistance Program (SNAP) benefits is associated with a decline in food spending and caloric consumption over the SNAP month, resulting in a range of adverse consequences. However, there is a lack of consensus about the underlying cause of the SNAP benefit cycle. Building upon work conducted by Tiehen, Newman, and Kirlin (2017), I use the National Household Food Acquisition and Purchase Survey to examine SNAP households’ acquisitions of free food patterns across the SNAP month. I conclude that a steady state of free food acquisitions across the month is primarily attributable to benefit inadequacy.
Although the three chapters are situated within distinct sets of literature, they jointly point to the importance of public food assistance for Americans in need. This dissertation was written during the Trump Presidency, which was characterized by movements to drastically cut the social safety net – followed by the COVID-19 pandemic, its associated recession, and movements to rebuild the safety net in the early years of the Biden Presidency. The three essays highlight the conditions that have led to current proposals to transition to a universal structure for SNAP and other safety net programs
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