April 17, 2017

Hands up

One argument often made in defense of slashing programs for low income and working people is that these discourage or "disincentivize" work. However, as Neil Irwin makes clear in this New York Times article, it's often the other way around.

According to Irwin, "Certain social welfare policies, according to an emerging body of research, may actually encourage more people to work and enable them to do so more productively."

For example the Earned Income Tax Credit, a refundable credit for workers with low and moderate (by WV standards), is a huge boon to millions of families. Studies suggest that the EITC encourages workforce participation by rewarding work. One study found that by 1999, 460,000 more women heads of household were working that would have been the case without the EITC.

(There's been an effort in WV for several years to create a state version, but that hasn't happened yet.)

Child care subsidies are another case in point. Costs for this can easily exceed college expenses. And they usually hit families at a time when their earnings haven't peaked. We've had several scrapes in West Virginia aimed at holding the line on these subsidies.

It only makes sense in a state with the lowest workforce participation rates to do what we can to make work affordable.

Research also supports the long term benefit of SNAP (formerly food stamps). A study of the early days of food stamps, a program that was rolled out at different times around. the country, found that those children who received this kind of nutritional support were more likely to be working decades later than those who didn't.

Specifically, a study titled "Long Run Impacts of Childhood Access to the Safety Net" by
Hilary W. Hoynes, Diane Whitmore Schanzenbach  and Douglas Almond concluded that 

access to food stamps in utero and in early childhood leads to significant reductions in metabolic syndrome conditions (obesity, high blood pressure, heart disease, diabetes) in adulthood and, for women, increases in economic self-sufficiency (increases in educational attainment, earnings, income, and decreases in welfare participation).
This is another reason why expanding access to free school breakfasts and lunches to everyone is so important. This is one area in which West Virginia is a national leader.

Another intervention that pays huge dividends is early childhood education. Nobel economics laureate James Heckman assets that "Evidence shows that supplementing the family environments of disadvantaged children with educational resources is an effective and cost-efficient way to provide equal opportunity, achievement, and economic success."

These kinds of investments offer more promise of promoting shared prosperity than the current slash and burn approach to federal and state budgets.

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