DC Accepted Papers Paper:
Sources of Resourcefulness: The Culture of Poverty As a Productive Adaptation to Economic Uncertainty
*Names in bold indicate Presenter
Poor communities in industrialized societies appear to share common characteristics such as unmarried cohabitation, female-headed households, and informal resource-sharing, contradicting middle-class values of personal savings and stable marriages. The unresolved question about these unstable family structures is whether they are a cause or effect of poverty.
The policy debate over welfare programs partially turns on this question. One side argues that government assistance is needed to ease the economic stresses that destabilize poor families, while the other side argues that welfare benefits targeting unstable families undermine the stabilizing institution of marriage.
This presentation seeks to resolve this debate by offering and testing a unique hypothesis. Because people in poverty react to incentives, perhaps unstable family structures are not a detriment for these low-income households but are, instead, a source of flexibility and resourcefulness. By measuring average levels of household wealth, I show that flexibility is better than structure for households facing the economic uncertainty of poverty.
My analysis uses a novel difference-in-difference methodology. Rather than measuring how different groups change by different amounts over time, my model measures how different groups (above vs. below the poverty line) experience different outcomes based on important differences (traditional vs. non-traditional family structures). Specifically, I examine the connection between family structure and resourcefulness (i.e., wealth) by examining how differences in wealth associated with “unstable” family structures differ between households above and below the poverty line. I apply this methodology using the Survey of Consumer Finances, collected by the U.S. Federal Reserve Bank between 2001 and 2016. This survey claims to be the most detailed measure of wealth for American households. Though I have supportive evidence from the Survey of Consumer Finances, I also plan to apply this model to data from the Survey of Income and Program Participation, collected by the U.S. Census Bureau.
This analysis finds that unstable, non-traditional family structures are associated with a decline in wealth for families above the federal poverty line but, interestingly, these same non-traditional family structures are associated with greater wealth for families below the poverty line. This means that the tendency for families in poverty to avoid stable marriage is not the product of deficient morals but is rather a productive adaptation to the economic uncertainty of poverty. These findings explain why families in poverty are hesitant to engage in stable family structures and also why mainstream families (above the poverty line) view this behavior as irresponsible—for them, it would be irresponsible (but it is not irresponsible for households in poverty).
I present these findings graphically and more fully explore their implications in the article “Are Unstable Families a Productive Adaptation to Poverty?: Evidence From the Poverty Culture” for the Georgetown Public Policy Review (available here: http://gppreview.com/2019/12/09/poverty-culture-evidence/).
The above analysis is the subject my graduate thesis, and I would be glad to share my Stata code, research, and full thesis upon request.
The policy debate over welfare programs partially turns on this question. One side argues that government assistance is needed to ease the economic stresses that destabilize poor families, while the other side argues that welfare benefits targeting unstable families undermine the stabilizing institution of marriage.
This presentation seeks to resolve this debate by offering and testing a unique hypothesis. Because people in poverty react to incentives, perhaps unstable family structures are not a detriment for these low-income households but are, instead, a source of flexibility and resourcefulness. By measuring average levels of household wealth, I show that flexibility is better than structure for households facing the economic uncertainty of poverty.
My analysis uses a novel difference-in-difference methodology. Rather than measuring how different groups change by different amounts over time, my model measures how different groups (above vs. below the poverty line) experience different outcomes based on important differences (traditional vs. non-traditional family structures). Specifically, I examine the connection between family structure and resourcefulness (i.e., wealth) by examining how differences in wealth associated with “unstable” family structures differ between households above and below the poverty line. I apply this methodology using the Survey of Consumer Finances, collected by the U.S. Federal Reserve Bank between 2001 and 2016. This survey claims to be the most detailed measure of wealth for American households. Though I have supportive evidence from the Survey of Consumer Finances, I also plan to apply this model to data from the Survey of Income and Program Participation, collected by the U.S. Census Bureau.
This analysis finds that unstable, non-traditional family structures are associated with a decline in wealth for families above the federal poverty line but, interestingly, these same non-traditional family structures are associated with greater wealth for families below the poverty line. This means that the tendency for families in poverty to avoid stable marriage is not the product of deficient morals but is rather a productive adaptation to the economic uncertainty of poverty. These findings explain why families in poverty are hesitant to engage in stable family structures and also why mainstream families (above the poverty line) view this behavior as irresponsible—for them, it would be irresponsible (but it is not irresponsible for households in poverty).
I present these findings graphically and more fully explore their implications in the article “Are Unstable Families a Productive Adaptation to Poverty?: Evidence From the Poverty Culture” for the Georgetown Public Policy Review (available here: http://gppreview.com/2019/12/09/poverty-culture-evidence/).
The above analysis is the subject my graduate thesis, and I would be glad to share my Stata code, research, and full thesis upon request.
