Journal Issue: Opportunity in America Volume 16 Number 2 Fall 2006
Public Policy and the Intergenerational Transfer of Poverty
Policy proposals to reduce the intergenerational transfer of poverty focus on three broad areas: schools, neighborhoods, and families. Cecilia Elena Rouse and Lisa Barrow discuss the role of schools in their article in this volume. We briefly discuss research on the relationship between children's neighborhoods and their economic success as adults before turning to the role of families, particularly the relationship between parents' marital status, work, and religion and their children's chances of being poor as adults.
Surprisingly little is known about the effect of children's neighborhoods on their economic status as adults. Most researchers focus on how neighborhoods affect child or adolescent outcomes—outcomes that are only modestly correlated with the children's economic status as adults.3 In addition most of the research is “nonexperimental”—that is, its subjects are not randomly assigned to different neighborhood environments. Instead, the research simply compares children whose families live in different neighborhoods. Such an analytical approach, however, risks finding links between the children's outcomes and the neighborhoods themselves when the outcomes are instead due to something about the parents who choose to live in certain neighborhoods.4 A different approach taken by some researchers is to consider the correlation, or similarity, in outcomes of children growing up within a few blocks of one another. One study found that the correlation in the years of schooling of children living in the same neighborhood is around 0.1 (where perfect correlation would be 1), which suggests a fairly limited role for neighborhood influence—at least on average across a nationally representative sample.5
Even if neighborhoods have little effect on average, the consequences of growing up in America's most disadvantaged urban communities could be important for those at the bottom of the income distribution—a possibility that has generated particular concern in public discussions.6 Yet even here the influence of neighborhoods on many childhood outcomes may be surprisingly modest, at least according to available data from the U.S. Department of Housing and Urban Development's Moving to Opportunity (MTO) demonstration. The MTO program overcomes the self-selection problem by randomly assigning low-income, mostly minority families into groups that are offered different forms of treatment. It thereby creates substantial differences in neighborhoods among otherwise comparable groups of poor parents and children.
Although evaluations of MTO after four to seven years find that moving to less disadvantaged communities reduces risky and criminal behavior in girls, they find that such moves on balance increase these behaviors in boys and have no detectable effects on children's academic performance, such as achievement test results or the chance of dropping out of high school.7 It is possible that the benefits of moving away from very disadvantaged neighborhoods may become greater over time, or that the benefits may be more pronounced among children who were very young when they moved.8 But there is as yet no strong evidence that moving poor families to less disadvantaged areas will substantially change children's life chances.9
If moving children to better neighborhoods is unlikely to improve their lives significantly, it is reasonable to contemplate making changes in the families in which children are raised. Historically, recognizing that serious material deprivation could hurt children's life chances, antipoverty policy focused on changing the family environment by providing income transfers to poor families.10 But as the number of single mothers increased and welfare rolls began to grow, policymakers turned their attention to trying to discourage out-of-wedlock childbearing and to encourage mothers to work outside the home. The welfare reform legislation signed by President Bill Clinton in 1996 explicitly bases the need for attention to these two issues on their presumed effect on children's life chances.11 As Douglas Besharov notes, for most Americans welfare reform “was about reducing the deep-seated social and personal dysfunction associated with long-term dependency, thereby ultimately reducing poverty. For welfare reform to be a success on this measure will depend on whether the low-paying jobs taken by many women leaving welfare lead to better jobs, whether the household arrangements (and other sources of support) that have allowed mothers to leave welfare without working prove supportive and nurturing, and whether the eventual result is less dysfunctional behavior among parents and better outcomes for children.”12
More recently many commentators aiming to change the “culture of poverty” have added another goal: religious adherence. Senator Rick Santorum, chairman of the Senate Republican Conference, has said apropos of faith-based social welfare programs, “The whole idea of funding people of faith is not just to provide good human services. It's also to provide good human services with that additional touch, if you will, with that aspect of healing that comes through that spiritual interaction. . . . You can't ignore the importance of the spiritual part of someone's life and say you're going to solve their problems. You're throwing good money after bad.”13 The importance of religion in addressing poverty, like the promotion of work and marriage, inspires bipartisan agreement. In discussing faith-based social welfare programs several years ago, then–Vice President Al Gore argued that their “religious character . . . is so often key to their effectiveness,” although he noted that the government's job would not be to promote “a particular religious view.”14 Commentator William Raspberry notes, “Many of the problems that are most difficult to get at in our society today have to do with changing attitudes. . . . There are people who do these things and some of the most successful ones are those who go to changing the person from the inside. Religious organizations may be better equipped than most organizations to do that kind of thing.”15
Public debates on antipoverty policy devote more attention to changing parental culture than to approaches that would change specific parenting practices.16 Such debates also give relatively little attention to another family-oriented strategy that is beyond our focus: replacing rather than changing the child's home environment, for example, by sending the child to preschool and before- and after-school programs.17 As David Brooks notes, recently conservatives “have had free rein to offer their own recipe for social renewal: churches that restrain male selfishness, decency standards that check hedonism, social norms that discourage childbearing outside of wedlock. . . . Daniel Patrick Moynihan observed that the core conservative truth is that culture matters most [for poverty], and that the core liberal truth is that government can reshape culture.”18
In the next section we discuss in more detail the ways in which parental work, marriage, and religion—the most common indicators of “culture”—may affect children's educational attainment and future income, and we review what researchers have found about the likelihood that changing each of these indicators will reduce poverty in the next generation. Consistent with the beliefs of many policymakers, some research has documented large correlations between whether children lived in a two-parent family—or lived with at least one parent who worked—and their schooling and adult income. The simple correlation between parents' religious participation and children's schooling and income is less strong and less consistent. There is, however, little evidence to date that any of these relationships are causal—that, for example, living in a two-parent family in and of itself raises a child's educational attainment. We then consider what would happen to poverty in the children's generation if one could substantially change these indicators of culture among today's parents. Finally we discuss the implications for public policy.