Trends in the Economic Status of the Aged and the Implications for State Policy

This paper examines recent trends in the economic status of the elderly. Particular attention is given to shifts in the income composition of older households and why these shifts have taken place. It is shown that most of these shifts are attributable, either directly or indirectly, to Social Security and private pension policies. The data also reveal that the income mix of poor older households differs greatly from that of more affluent older households. This has implications for the formulation of policies to improve the economic status of the elderly in poverty. Unfortunately, the current policy environment, characterized by large federal deficits, places severe constraints on developing federal programs to aid poor older persons. Thus, it is likely that state governments will need to take increasing responsibility for programs targeted to the aged poor. The paper concludes by considering the potential effectiveness of such programs.     

Foster care and the earned income tax credit

Foster care is a source of significant costs to both governments and foster children. Policies that provide income support to households potentially reduce entry into foster care via reducing child maltreatment and improving child behavior. As part of the American Recovery and Reinvestment Act in 2009 (ARRA2009), the federal government expanded the earned income tax credit (EITC), which is an important income support program for low-income working households. Using state-level data, we investigate the impact of this EITC expansion on state-level foster care entry rates. Typically, states with state-level EITC match federal EITC spending at a specific rate, meaning that increases in federal EITC spending increase state-level spending as well. We find that expansion of EITC decreased foster care entry rates by 7.43% per year in states with a state-level EITC, relative to those without. In models that separately examine foster care entry rates by age of the child, we find that the ARRA2009 had different effects on foster care entry based on the child’s age. We find that ARRA2009 decreased foster care entry rates for children age 11–15 by nearly 12% in states with a state EITC and it decreased foster care entry rates for children age 16–20 by roughly 17% in states with a state EITC, relative to states without a state EITC.     

Income Changes and Cognitive Stimulation in Young Children's Home Learning Environments

Early home learning environments are the result of interactions between the developing children and the opportunity structures provided by their families. Income is one of several resources that affect the cognitive stimulation that children experience. Using data from the National Longitudinal Survey of Youth (N= 2,174) this study examines the influence of household income on cognitive stimulation during the transition to school (aged 3–4 years to 7–8 years). Cross‐sectional and longitudinal fixed effects regressions are estimated to examine income's effect. Household income was positively related to the level of cognitive stimulation in children's home environments across both sets of analyses. Home environments of children in low‐income households were particularly sensitive to income changes over time. The implications of these results for programs and policies that reduce disparities in school readiness are discussed.     

Barriers to Economic Security: Disability,Employment, and Asset Disparities in Canada

Although ample research shows that people with disabilities face significant labor market barriers, questions remain about whether and how disadvantages in employment and earnings contribute to economic insecurity. We use 1999 to 2012 Canadian Survey of Financial Security data to study disparities in nonhousing assets, which include household savings, stocks, and pensions, across households with and without disabilities. We find that households where the respondent or their spouse reported a disability held 25 percent less in nonhousing assets after accounting for key employment, education, and demographic factors. Demonstrating the more complicated relationship between disability, employment, and assets, these direct effects were further strengthened by disability's indirect effects on assets through its relationship with employment income.     

Individual Pension Plans in Spain: How Expected Change in Future Income and Liquidity Constraints Shape the Behavior of Households

Understanding the motives that underlie Spaniards’ retirement saving decisions is important because many, if not most, future retirees will need to rely on personal savings to maintain a decent standard of living. The governor of the Bank of Spain has stated recently that the current public pension system will not guarantee an adequate pension to the citizens, advising to save now for retirement. In this debate on public pensions, and the complementary role that private pensions might play in Spain, this article has shed light on the decision of Spanish households to engage in individual pension plans and it has identified which factors determine the total amount saved in such retirement plans. Using micro data from the Bank of Spain (Survey of Household Finances 2011), the analysis has revealed that the expectations of lower future income, along with preferences for the financial risk and education, exert an important influence on the likelihood of enrolling in a private pension plan. University education minimizes the myopic behavior of households in the sense of making them more forward-looking and cautious in the face of their future well-being. Additionally using Heckman’s methodology to correct for the problem of selection bias, our results have revealed that liquidity constraints affect negatively the total amount of money saved for retirement.     

Promoting Fathers' Engagement With Children: Preventive Interventions for Low‐Income Families

Few programs to enhance fathers' engagement with children have been systematically evaluated, especially for low‐income minority populations. In this study, 289 couples from primarily low‐income Mexican American and European American families were randomly assigned to one of three conditions and followed for 18 months: 16‐week groups for fathers, 16‐week groups for couples, or a 1‐time informational meeting. Compared with families in the low‐dose comparison condition, intervention families showed positive effects on fathers' engagement with their children, couple relationship quality, and children's problem behaviors. Participants in couples' groups showed more consistent, longer term positive effects than those in fathers‐only groups. Intervention effects were similar across family structures, income levels, and ethnicities. Implications of the results for current family policy debates are discussed.     

Emergency Saving and Household Hardship

Households with limited income and wealth often struggle to access the financial liquidity needed to address unexpected expenses or income drops. Emergency savings can act as form of insurance against such economic shocks and reduce the risk of hardships that influence family wellbeing. Prior research has established that threshold amounts of liquid assets can reduce the risk of economic hardship. This study used a measure of self-reported emergency saving behavior to examine whether households who reported saving for emergencies were less likely to experience subsequent economic hardships in a longitudinal sample of households in disadvantaged neighborhoods from the Annie E. Casey Foundation’s Making Connections project. Results across a range of regression models suggest that households who saved for emergencies experienced slightly less overall hardship and were less likely to report several specific hardships, such as food insecurity and having a phone disconnected, three years later. This study supports the idea that small, unrestricted savings may play a protective role for low-income households.     

Immigration and the Family Circumstances of Mexican‐Origin Children: A Binational Longitudinal Analysis

Using data from the birth cohort of the Early Childhood Longitudinal Study (n = 1,200) and the Mexican Family Life Survey (n = 1,013), this study investigated the living arrangements of Mexican‐origin preschool children. The analysis examined children's family circumstances in both sending and receiving countries, used longitudinal data to capture family transitions, and considered the intersection between nuclear and extended family structures. Between ages 0–1 and 4–5, Mexican children of immigrants experienced significantly more family instability than children in Mexico. They were more likely to transition from 2‐parent to single‐parent families and from extended family households to simple households. There were fewer differences between U.S. children with immigrant versus native parents, but the higher level of single parenthood among children of natives at ages 0–1 and the greater share making transitions from a 2‐parent to a single‐parent family suggest ongoing erosion of children's family support across generations in the United States.     

Effects of federal programs on children: Absolute poverty, relative poverty, and income inequality

Since the 1996 welfare reform, federal spending on means-tested programs targeting the poorest children has decreased, while programs that benefit children in low-income working families have been expanded substantially. With this background, this study examined changes in the antipoverty and anti-inequality effects of children's programs between 1995 and 2007 using data from the Annual Social and Economic (ASEC) Supplements to the Current Population Survey (CPS). The findings suggest that although the poverty-reduction effects of the federal child programs increased between 1995 and 2007, the programs' effects on the reductions of children's absolute poverty gaps, relative poverty rates, relative poverty gaps, and income inequality all decreased. More importantly, the antipoverty effects of the federal child programs were most weakened for the poorest children (i.e., those in female-headed, immigrant, and nonworking families) between 1995 and 2007.     

Long-Term Care

This study examines the redistributive effects of public pensions on old-age income inequality, testing whether public pensions function as the “great equalizer.” Unlike the well-known alleviating effect of public pensions on old-age poverty, the effects of public pensions on old-age income inequality more generally have been less examined, particularly outside Western countries. Using repeated cross-sectional data of elderly Koreans between 1998 and 2010, we applied Gini coefficient decomposition to measure the impact of various income sources on old-age inequality, particularly focusing on public pensions. Our findings show that, contrary to expectations, public pension benefits have inequality-intensifying effects on old-age income in Korea, even countervailing the alleviating effects of public assistance. This rather surprising result is due to the specific institutional context of the Korean public pension system and suggests that the “structuring” of welfare policies could be as important as their expansion for the elderly, particularly for developing welfare states.     

New evidence on the role of remittances on healthcare expenditures by Mexican households

Using Mexico’s 2002 wave of the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH), we find that international remittances raise health care expenditures. Approximately 6 pesos of every 100 peso increment in remittance income are spent on health. The sensitivity of health care expenditures to variations in the level of international remittances is almost three times greater than their sensitivity to changes in other sources of household income. Furthermore, health care expenditures are less responsive to remittance income among lower-income households. Since the lower responsiveness may be partially due to participation of lower-income households in public programs like PROGRESA (now called Oportunidades), we also analyze the impact of remittances by health care coverage. As expected, we find that households with some kind of health care coverage—either through their jobs or via participation in PROGRESA—spend less of remittance income increments on health care than households lacking any health care coverage. Hence, remittances may help equalize health care expenditures across households with and without health care coverage.     

Household Finance and Food Insecurity

Despite repeated expansions of federal food assistance, food insecurity and hunger continue to affect many Americans. While job loss and poverty are among major contributors, theoretical and empirical literature suggest that households’ ability to borrow and save might provide a buffer protecting from food insecurity. Using data from the Panel Study of Income Dynamics, we tested whether liquidity constraint, asset inadequacy, and insolvency risk defined based on financial ratios could predict household food insecurity separately from the effects of income and program participation. Results showed that a household’s liquidity constraint and asset inadequacy were linked with increased risk of food insecurity at all income levels, although the association was strongest among poor households and those with incomes slightly above the federal food assistance eligibility threshold. Unlike indications from qualitative literature, financial constraint appeared to be an exogenous determinant of household food insecurity. Implications for financial practitioners and policymakers are discussed.     

Saving regret and procrastination

In countries, where a substantial proportion of retirement income rests on savings, there is much concern that a sizeable fraction of the population reaches retirement with insufficient financial resources. We define saving regret as the wish in hindsight to have saved more earlier in life. We measured saving regret and possible determinants in a survey of U.S. households in which respondents were aged 60–79. We find high levels of saving regret, affirmed by some 58%. Saving regret exhibits significant and plausible correlations with personal characteristics and wealth: Married, older, healthier and wealthier respondents are less likely to report saving regret, suggesting the measure’s validity. We find only weak evidence for correlations between saving regret and measures of procrastination: persons with traits associated with procrastination express saving regret about as often as those without those traits.     

Family labor supply,taxation and saving in an imperfect capital market

This paper combines income and expenditure with time use data to provide a unique picture of the labor supply, household production, saving and consumption decisions of two-adult households over a life cycle defined in terms of the presence and ages of children. The study also draws on data for household borrowing and lending, direct and indirect benefits and taxes to calibrate a “family” life cycle model at the core of which is the hypothesis that households face a borrowing interest rate that rises with the amount of non-collateral based borrowing. The household members jointly choose time paths of time use, consumption and saving over their life cycle in the face of this capital market imperfection. Importantly, households are shown to differ significantly in their saving behavior in a way that depends on secondary earner labor supply, with a strong positive association between saving and the income of the second earner. The results differ sharply from those of the existing literature.     

UNRAVELING THE ECONOMIC PARADOX OF FEMALE-HEADED HOUSEHOLDS IN MEXICO: The Role of Family Networks

An extensive amount of research has shown that female-headed households are among the most disadvantaged in the United States. By contrast, households headed by single mothers in Mexico have median per capita income levels that are the same or higher than those headed by men and are no more likely to be living in poverty. These findings are surprising, given the many disadvantages that Mexican women face in the labor market and the added difficulties for single mothers of managing work and family life. We propose four explanations for the relatively high income levels of female-headed households in Mexico: (1) female heads' more advanced stage in the life course compared to male heads, (2) the greater financial support they receive from extended family members, (3) the international migration of the partners of female heads, and (4) a selection process whereby only women with sufficient income head their own households, while others move into households headed by someone else. Using a nationally representative survey we find that economic transfers from relatives living within the country and abroad, as well as a selection effect explain female-headed households' relatively high income.     

Migration,development and remittances in rural Mexico

The argument is that remittances to Mexico from migrants in the US contribute to household prosperity and lessen the balance of payments problem. The purpose of this article is to provide an overview of the incentives and constraints to development and individual economic well-being in rural Mexico. Examination is made of the financial amount of remittances, the use of remittances, the impact on development of remittances, models of migration, and migration historically. The viewpoint is that migration satisfies labor needs in developed countries to the detriment of underdeveloped countries. $2 billion a year are sent by illegal migrants from the US to Mexico. This sum is 4 times the net earning of Mexico's tourist trade. 21.1% of the Mexican population depend in part on money sent from the US. 79% of illegal migrants remitted money to relatives in Jalisco state. 70% of migrant families receive $170/month. In Guadalupe, 73% of families depended on migrant income. In Villa Guerrero, 50% of households depended on migrant income. Migrant income supported 1 out of 5 households in Mexico. Money is usually spent of household subsistence items. Sometimes money is also spent on community religious festivals, marriage ceremonies, and education of children or improved living conditions. Examples are given of money being used for investment in land and livestock. Migration affects community solidarity, and comparative ethic, and the influence on others to migrate. Employment opportunities are not expanded and cottage and community industries are threatened. Land purchases did not result in land improvements. Migration models are deficient. There is a macro/micro dichotomy. The push-and-pull system is not controllable by individual migrants. The migration remittance model is a product of unequal development and a mechanism feeding migration. Mexican migration has occurred since the 1880's; seasonal migration was encouraged. There was coercion to return to Mexico after the economic recession of World War I; the door was firmly closely during the Great Depression of 1929-35. The 1980 estimates of illegal Mexican migrants totaled 2-9 million, which is the largest flow in the world. US industrial presence and Mexican development have reinforced migration flows. Regional and international capitalist requirements govern migration.     

The Importance of Governance Levels in Alternative Food Networks: The Case of Red Meat Inspection Rules

Focusing on U.S. red meat inspection regulations, in the context of alternative food networks (AFNs), we explore the implications of different levels of governmental governance for the number of red meat slaughter establishments in the United States. We argue that disaggregating “the state” makes possible a more nuanced consideration of the effects of different tiers of governance. We use regression analysis with data for 40 U.S. states over 40 years to examine the effects of state (subnational) inspection programs and implementation of the federal Hazard Analysis and Critical Control Point (HACCP) regulations on the number of slaughter establishments by type. In this analysis we test two common beliefs among AFN actors: that state inspection helps, and HACCP hurts, small slaughter establishments. It also allows us to make a case for disaggregating governance tiers as we find that state inspection programs and HACCP have significant and opposite effects on the number of federally and non–federally inspected slaughter establishments. Our analysis supports the belief that state inspection is important to small slaughter establishments, but does not support the belief that HACCP has had a negative effect on them. Our conclusion is that agrifood scholars need to pay attention to different forms of governmental governance even with the increased focus on private and third‐party certifications.     

Institutional determinants of saving: implications for low-income households and public policy

There is an emerging policy and academic discussion, supported by a growing body of empirical evidence, regarding the potentially positive effects of asset accumulation in low-income households. However, at least two questions precede this discussion: Can the poor save? And, if so, how can programs and policies promote saving by the poor? This paper begins to address these questions by examining the effects of institutional variables on saving behavior. We posit that four institutional variables—institutionalized saving mechanisms, targeted financial education, attractive saving incentives, and facilitation—promote saving. However, low-income households are substantially less likely to have access to these institutions, a phenomenon that may help explain their below-average saving rates. This discussion has implications, especially as policy-makers consider various proposals to increase the saving rates of low- and middle-income Americans.