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FOCUSING ON SUCCESS: PATHWAYS OUT OF CHILDHOOD POVERTY

FOCUSING ON SUCCESS: PATHWAYS OUT OF CHILDHOOD POVERTY. Presentation at the UMBC Public Policy Forum September 21, 2007. OVERVIEW OF PRESENTATION. Background Objectives of study Data Outcomes examined Childhood characteristics (independent variables) examined Results

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FOCUSING ON SUCCESS: PATHWAYS OUT OF CHILDHOOD POVERTY

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  1. FOCUSING ON SUCCESS: PATHWAYS OUT OF CHILDHOOD POVERTY Presentation at the UMBC Public Policy Forum September 21, 2007

  2. OVERVIEW OF PRESENTATION • Background • Objectives of study • Data • Outcomes examined • Childhood characteristics (independent variables) examined • Results • How are adult outcomes related to childhood characteristics? • What if we could improve childhood conditions? • Policy implications

  3. BACKGROUND • Project funded by the Ford Foundation • Investigators included: • Nancy Augustine, GWU • George Galster, Wayne State U. • Marv Mandell, UMBC • Dave Marcotte, UMBC • Hal Wolman, GWU

  4. Objectives of Study • Identify the childhood determinants of adult outcomes • What are the policy implications in terms of what can be done to increase life chances of children who grow up in relative disadvantage?

  5. DATA • Panel Study of Income Dynamics (PSID) • All children born into PSID sample households between the years 1967 and 1974 • Outcomes measured in 1998 and 1999 • In 1999, sample members were 25-32 years old

  6. OUTCOMES EXAMINED • Not having a child prior to age 18 • Completing high school • Completing college • Being employed in 1999 • Being employed or in school—in 1999 • Hours worked in 1998 • Earned income during 1998 • Owning a home in 1999

  7. CHILDHOOD CHARACTERISTICS OF PRIMARY CONCERN • Poverty status • The frequency with which the child’s family changed residence • The extent to which the child grew up in an owner-occupied housing unit • Owner-occupancy rate in the neighborhoods in which the child grew up

  8. OTHER CHILDHOOD CHARACTERISTICS EXAMINED • % of childhood spent with two parents • Background and social characteristics of the child’s household head and spouse, including: • Level of education • Religion • Place of birth (city, suburb, rural) • Whether they had ever served in the armed forces • Other economic circumstances during childhood such as: • Employment status of the parent or household head and spouse • Occupation status of the parent or household head and spouse

  9. OTHER CHILDHOOD CHARACTERISTICS EXAMINED (continued) • Measures of family expectations and behaviors such as whether the household head reported to the interviewer that he/she: • Belonged to a union • Participated in social clubs • Read the newspaper every day • Attended religious services regularly • Knew neighbors by name • Planned ahead • Trusted people • Neighborhood poverty rate

  10. METHODOLOGICAL CHALLENGES • Establishing causality • Numerous control variables • Instrumental variable estimation to address unmeasured variables • Indirect as well as direct effects • Simulations looking at the effect of increasing one particular characteristic while holding all other childhood characteristics constant

  11. REGRESSION ESTIMATES: DETERMINANTS OF ADULT EARNINGS Controlling for other variables, the following characteristics had independent and statistically significant positive effects on earnings as a young adult: • Proportion of years during childhood that the child did not spend in poverty • Proportion of years during childhood that the individual lived with two parents • College graduation

  12. Probability of Completing High School -475.5 0.119 Probability of Completing College 66.92 -3.13 0.188 1.25*** Proportion of Childhood Spent in Poverty Probability of Not Having a Child Prior to Age 18 Annual Hours Worked, 1999 Log of Earned Income, 1998 -145.1 .000114** -8.078** -0.1 33.357 -.807 0.385*** -1.72** FIGURE 2: DIRECT AND INDIRECT EFFECTS OF YEARS LIVED BELOW POVERTY DURING CHILDHOOD ON EARNED INCOME AS YOUNG ADULT Numbers shown are estimated regression coefficients. * p<.10; ** p<.05; *** p<.01

  13. Probability of Completing High School -588.95 0.095 Probability of Completing College -3.907* 23.405 0.092 1.177** Probability of Not Having a Child Prior to Age 18 Residential Stability During Childhood Annual Hours Worked, 1999 Log of Earned Income, 1998 3.796 -142.78 0.000129** -0.01 47.47 1.724 0.423*** -1.269 FIGURE 5: DIRECT AND INDIRECT EFFECTS OF RESIDENTIAL STABILITY DURING CHILDHOOD ON EARNED INCOME AS YOUNG ADULT Numbers shown are estimated regression coefficients. * p<.10; ** p<.05; *** p<.01

  14. Probability of Completing High School -102.464 0.112 Probability of Completing College 48.51 -2.138 0.123 1.184*** Family Home Ownership During Childhood Probability of Not Having a Child Prior to Age 18 Annual Hours Worked, 1999 Log of Earned Income, 1998 2.288 -174.38 0.000111** -0.13 43.835 -0.12 .407*** -0.545 FIGURE 6: DIRECT AND INDIRECT EFFECTS OF FAMILY HOME OWNERSHIP DURING CHILDHOOD ON EARNED INCOME AS YOUNG ADULT Numbers shown are estimated regression coefficients. * p<.10; ** p<.05; *** p<.01

  15. Probability of Completing High School 0.816 0.12 Probability of Completing College 37.38 1.295*** 0.127 0.047 Mean Neighborhood Owner Occupancy Rate During Childhood Probability of Not Having a Child Prior to Age 18 Annual Hours Worked, 1999 Log of Earned Income, 1998 0.028 -197.01 0.000107** 0.109 25.78 -0.004 0.41*** 0.011 FIGURE 7: DIRECT AND INDIRECT EFFECTS OF MEAN NEIGHBORHOOD OWNER OCCUPANCY RATE DURING CHILDHOOD ON EARNED INCOME AS YOUNG ADULT Numbers shown are estimated regression coefficients. * p<.10; ** p<.05; *** p<.01

  16. SIMULATION RESULTS—I

  17. SIMULATION RESULTS—II

  18. SIMULATION RESULTS—III

  19. POLICY IMPLICATIONS • Some important intermediate and adult outcomes can be improved by increasing: • the number of years during childhood spent in a household that is above the poverty line • Residential stability • the homeownership rate of the neighborhood in which the child grows up • the percentage of years spent growing up in an owner-occupied house • Graduation from college would also improve adult outcomes.

  20. POLICY IMPLICATIONS (continued) • Income: transfers, tax system, programs aimed at increasing earnings • Housing policy: quite a bit is currently being done to encourage homeownership for the poor; however, all existing programs are aspatial in design, which is an important limitation if neighborhood owner occupancy rate is important • Education policy: post-secondary education (especially college graduation) has a much greater impact than high school graduation alone

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