Education people think, of course we have bridges and education that are both Human Capital. This is about, well maybe some of the things that we think of as just spending to help people out, you know, maybe if they go to low income families they actually might have quite powerful effects on the future. Thats what we will explore here. This is thinking about trances to low income families and what impact they might have and what does the research say about the impact they have on future Living Standards on growth. So we will invite kristin to come up. Thank you. Hello. Im kristin butcher. I tal talk about the assessment of transfer to longterm family hes. We are used to thinking of infrastructure in research or where there are upfront kofrt. Theres a nice picture of the big dig from my neck of the woods in boston. Looks costly. But maybe in terms of capacity or helping workers to get to their jobs and goods to get to market, theres a picture of it looking a lot more productive capacity like. But were really not used to thinking of transfers to low income families in that way. Mostly we think, im here to tell you, children are cute, and their suffering is acutely painful to watch so we think of the transfers of something as incurs and making sure that suffering is not too acute. But could these be thought of as investments in Human Capital . Do transfers to low income families actually change the productive capacities that children in those families attain when they become adults. And in this way are they then viewed like the other investments as something with an upfront cost but maybe a Long Term Benefit and maybe a benefit greater than those cost. These are certain domains of investments that we might or transfers that we might think about and think about whats the scope for these to be actual investments. This helps buffer from financial strain and the related stresses there. Things like food and nutrition programs, biggest one of which would be the snap program. Supplemental nutritional assistance program. And of course it provides more resources more generally. We also might think about Health Insurance. That insures or potentially insures access to health care and those things can prevent or treat ailments as they arise and provides more resours. Finally housing the is the other domain i will talk about. Cs. Finally housing the is the other domain i will talk about. Es. Finally housing the is the other domain i will talk about. That might insure no asbestos or lead paint in the walls. And that threaleads to a better neighborhood. This shows there is a link of better environments and later outcomes. People break this down into different periods. The inyoure touro period. The neonatal period may be for the different types of capacities or just a place where there might be sensitivities and there for those developments might be malleable, capacities might be malleable at those point. And researchers tied these things to different types of capacities that seem to be developed at each of these point. So the fundamental architecture we carry around with us seems to be developed quite early. Things that are insult to the fetus quite early seem to show up at a fairly profoundly later this life. Cognitive skills are shown to be malleable pretty early in childhood and noncognitive skills are malleable later through add less ept development. I must have been cold when ways doing this because it is all about sweat gland. Iways doing this because it is all about sweat gland. Ways doing this because it is all about sweat gland. Was doing this because it is all about sweat gland. Basically this is from james barker and it basically illustrates that were all born with approximately the same number of sweat glands and in that zero to three age if youre in a warm climate you develop the capacity to use them more. If youre in a colder climate, you dont. And later on you can cool yourself down if you were raised in that hotter environment. People think there are many other capacities of musehuman development that might be malleable in this way. There is starting to be a large body of literature that ties certain stimuli at different points in development to these later in life capacities. This goes through different types of simtimuli. Infectious disease, maternal stress. I dont have time go into the details, but i love the details. But all of these are sort of mounted on a really rigorous platform of trying to find out when there is a group that is a Treatment Group and control group. So youre not just saying, is it bad for your mom to be in an earthquake when she is pregnant with you . I think we all think, yeah. I dont need to be that convinced. But im trying to find a dwrup that group that is really similar but doesnt have that same stimuli. That is really similar but doesnt have that same stimuli. This group is very largely compelling that something happens. And later in life using these rigorous plat forms that theres a connection between what happens early in life and later. And it is plausible that poverty can affect nutrition, disease and stress in ways that could be in outero and later in childhood. Can transfers meaningfully alter these environment in a way that can effect these longterm capacities. Then the followon question of that is of course, are those benefits that are going to accrue down the line greater than the cost in that upfront investment. Parents might undo the transfer in some way so they might reduce labor supply if you give somebody a dollar, they might work a dollar less. It depends what they do with their time. It might look like you dont do very much because of the available resources to the household will remain relatively unchanged. Im talking theoretically at the moment there is a large and vast Empirical Literature that tries to look at all these links. So lots and lots and lots of research. Are in kind transfers the same as cash . That depend entirely on what the family would have done if they had cash. So if a family gives that child a vaccine and they were going to give the child the vaccine anyway then you give them cash. There is also correspondingly vast literature are what are the labor supply effects of these transfers. How do you sumt rise economics . The rest is commentary. But then also a question as to how much do they respond p. And if youre interested i will refer you to these volumes. I think in the interest of time i will skip ahead. Here is just one example as to why we might there there are big labor supply effects and other effects. This is the big picture. There is Family Income measured as a percent of the poverty line and on the vertical access is the share of children covered by Health Insurance. The pink line is 1987 and at the top in teal, i believe that is, we have 2012. What we see is that with the expansions in medicaid and state Childrens HealthInsurance Program we are doing away with that enormous dip that happened right around the poverty line in 1987. And somebody like an incentives mastermind to think that maybe family approaching that cutoff point and are worry about covering that children with Health Insurance might have had labor supply effect and the literature that exploits that across states and over time find that low income women are more likely to work when their children are not going to leave being insured as they do that. So these are offsetting effects but also maybe the case that low income families, parents build more capacity through working, learn on the job and if youre not working then youre kept that way and potentially even worse, maybe theres an intergenerational transmission of welfare dependency. Right . Were starting to see some really interesting results coming out of the scandinavian countries. Social scientist are pining for the fjords these days because they have rich data across generations and across massive data sets that allow us too get into this. There is evidence that when the family of origin has access to say Disability Insurance and if this case, that the later generation is more likely to participate in that and it is based on random assignment and judges adjudicating those cases. Pretty good evidence it is causal. Now what are the challenges to us understanding the longterm effects of the safety net that we have . There are two sources of those challenges. One is data and one is that correlation is not causation. Which i think is in my economist license that i have to mention that whenever i can. On the data front, if we want to see the longterm impacts across a range of these domains, we will have to wait until people are age 25 to look at completed education. Something completed fertility, age 35 to 40 perhaps. Peak earnings, something in p 5 to 50 range. 4p 5 to 50 range. 5 to 50 range. 5 to 50 range. So if you just look at this brief start data, big kinds of programs, only two of those up there are older than i am. And so, hopefully we will have to look for a while to see the impact on mortality. Then the other issue, if we have data that happened to you to connect when you are young, we need to worry, why did you get that . Its not enough to say, youve got to transfer when you were young and therefore and now you know you are doing better or worse because we dont know why the people got that transfer. We need to have some way of saying, is this person doing better than they otherwise would have and thats why we need the micro economist tool kit which really consists of randomized control trials, flip a coin, you get it, you dont. Differences and differences where we leverage the fact that a lot of times these policies are rolled out over different geographies, over time and we can say, hey, the people in this state can stand in for what would have happened to these people had they not gotten access to this program. I wont talk about regress, just continuity design. Okay, in the 2 04 i have left, i will talk about these very recent Research Papers i have that go back to the dawn of the safety net. What impacts do these have on the childrens longterm capacities. Interestingly in the last year there have been papers that come out across all four different domains. All of these are based on a really Rigorous Research design where there is plausible treatment and control groups. Can you plausibly say this is the effect of the program. This reaches back to the mothers mention program in 1911 to 1935. They look at people who applied for this program, all these people declared themselves to be inneed. Eligibility was you had to be low income or widow or having been abandoned by your husband and you had to have children. They look many years later at people who received it and the people who initially screened as being eligible but then for some reason along wait was discovered they had more resources so they were not eligible and they make comparisons. You can see a cross a large number of domains they find the people who received this compared to close matches who did not are doing better than a lot of domains. Diane is here in the audience. There is a lovely paper by her and hillary and doug almond who looks at the official rollout of food stamp answers s. In. A p. N in. A p. In. A p. N. A p. A a p. Pp. Though can look at that with people who had food stamps and compare that to the people with less time covered. They have look at the 0 to 5 sensitive period and that 0 to 5 years improved health, and economic self sufficiency. There are two new papers on Health Insurance. One leveraging expansions we saw on the graph about in 1980s and 90s comparing across people what did and didnt expand and they have linked that to irs records and found that Medicaid Eligibility for children increased income and payroll taxes paid. Decreased eitc receipt. Decreased mortality which is not when we think people will be dying. Still, its noteworthy. And raise the likelihood of going to college by age 22 for women. They are able to do a cost benefit analysis that could suggest that fwost wigovernment will recoup about 56 of every dollar spent by the time they reach 60. Government will recoup about 56 of every dollar spent by the time they reach 60. I will skip over this one but this looks at the very beginning of the Medicaid Program in the 1960s so we can see people a little bit older an there are dramatic impacts that there is a 7 return on investment. Finally housing. There is one longterm study that is a followup to the moving opportunity study. The moving topportunity add group who had section 8 vouchers and were allowed to take those to find their own housing. Another group had to go to low poverty neighborhood and had to have kounsling to do that. Following these folks up now, which some are in young adult hood, the researchers have found that the people who are under 13 when they were randomly assigned have quite striking beneficial outcomes. And interestingly people over 13 do not seem to have these kinds of outcomes. We are able to do a cost benefit analysis that if a child had two Young Children the increase and earnings and taxes from the earnings will pay for the program in the long run. So in conclusion, the research from this is sort of dawn of the social safety net programs is just starting to come out. Using r using rigorous methods to correlate between causation and really meshes quite nicely with this other literature growing about why the Early Childhood period might in fact be so sensitive and so important to invest in. And we are not always able to say in a really tightly specified cost benefit analysis that are the benefits greater than the cost and sometimes the best we can do is ask the question if the person got this are they doing better. So we are are a long way from really understanding a dose response and being able to rank all of these in terms of what is exactly the most productive. But those things that indeed are able to do a cost benefit analysis show cost benefit returns. This is always open to critique. That was then. This is now. Would we get the same benefit if we increased benefits. I will leave you with saying that in my neighborhood, in massachusetts, theres no evidence that parents think for their owner children that were at the flat of the curve. In terms of their own selves investing in childhood. Thank you. [ applause ] it just showed up on the screen. There we go. Im greg duncan from university of california irvine. Im visiting this year with the russ ill Sage Foundation in new york city. E ill Sage Foundationw york city. Ill Sage Foundation i york city. Ll Sage Foundation in york city. It is a pleasure to be here. I dont have big comments about the paper, just suggestions. So let me get started. The paper makes this point and kristin did too. This is not about labor supply. Labor supply is a second order of order of concern on this paper. Is to what extent the transfers have impacts years and decade ahead on the children growing up and families receiving transfers. Kristin highlighted growing evidence from neuro biology about the importance of early life experiences. In urto as well as the first few few yearyears. Long lasting impacts of these programs. And to paraphrase studies of longterm effect of Cash Transfers, food exam. Answers s and so forth show longterm health and attainment. Sexam. S and so forth show longterm health and attainment. Texam. S and so forth show longterm health and attainment. Aexam. S and so forth show longterm health and attainment. Mexam. S and so forth show longterm health and attainment. Pexam. S and so forth show longterm health and attainment. Sexam. S and so forth show longterm health and attainment. Xam. S and so forth show longterm health and attainment. Am. S and so forth show longterm health and attainment. M. S and so forth show longterm health and attainment. S and so forth show longterm health and attainment. S and m health and attainment. S and so forth show longterm health and attainment. and so forth show longterm health and attainment. and so it looks like the timing of receiving the transfer matters a lot, with earlier being better. There are tricky policy implication answers i want to think about those and finally im not quite as sold as kristin is about the robustness of the literature. But we will talk about that. So when the transfer is received seems to matter a lot. She talked about paper by diane and doug almond. This is my candidate best map ever of the united states. It is not red and green. Not red and blue. Its green. And it is this paper that tries to show the way the Food Stamp Program rolled out in the 196 os and 1970s. Usually when a program rolls out it come out at the same time nationally or in an entire state. In the case of food stamps, it was county specific. Dark green show says counties that and you see a lot of states and in the south appalachia where counties behave very differently within the same state. You could have kids in the same state and one county has food stamps well before the baby was conceived and another might be in a neighboring counties where food stamps didnt begin until the kield child was age 3 or 5 or 7. Child was age 3 or 5 or 7. We take advantage of the timing of when that was rolled out. With respect to the birth date. And then look 20, 30, 40 years later to see whether the timing of that roll out seemed to correlate with health and economic self sufficiency. So this paper entables you to track year by year according to the time when food stamps are introduce id into the countd i. This is oriented toward exactly that. On the lefthand side, you have kids whose who are conceived in counties where food stamps were arent there. As you move right, food stamps began later and later with respect to the food birth year. This is as spkts spekts of metabolic syndrome. That is bad. It is indicative of cardiovascul cardiovascular problems. This is taking kids, early middle childhood to almost adolescence as compare sob group. Lets consider their scores to be zero, the reference group. And we want to see what respect you had metabolic rates. Higher or lower relative to this group of kids. And introduce netd middd in mid mood. Minus point a at the beginning is half a standard deviation lower on this metabolic syndrome forward and so forth. 5a at the is half a standard deviation lower on this metabolic syndrome forward and so forth. At the b