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American women have made astounding progress in the labor market over the last 60 years. From 1950 to 2011, women’s labor force participation nearly doubled from 33.9 percent to 58.1 percent. Daughters’ wages grew relative to their mothers’ and relative to men’s. In 2014, women’s median wages were approximately 50 percent higher than what women earned a generation prior. Women earned 82 percent of what men earned in 2011, up from 62 percent in 1979. Bolstering these trends was a dramatic increase in women’s educational attainment. As we write this paper, women now outnumber men in earning every type of college and advanced degree–associate’s, bachelor’s, master’s, and doctoral.
It is tempting to end the story here. But in the shadow of this success, millions of working women are struggling. Women continue to hold the majority of low-paying jobs, constituting 64 percent of minimum-wage earners. A significant gap between male and female earnings remains. Women are twice as likely as men to work part time. Work disincentives in government benefits and high marginal tax rates on secondary earners disproportionately affect women’s labor supply, often causing them to leave the workforce or scale back the hours that they work. Across nearly every income quintile, women have a higher likelihood than men of being downwardly mobile, according to research by Brookings.
Economic risk is amplified for unmarried mothers, who constitute roughly a quarter of US households. Families led by an unmarried mother earn roughly $23,000 per year-a quarter of the median family income of married mothers, according to Pew Research. This is barely above the poverty line, making it difficult for mothers to provide for daily needs or child care, let alone invest in human capital for themselves or their children. Hoynes and colleagues found that the rise in single motherhood may entirely explain the increase in poverty in the US from the 1980s to 2004. Chetty and colleagues found that single motherhood is a very strong correlate of low intergenerational mobility, much more so than income inequality, education, or racial segregation. Kearney and Levine found that the perceived and actual lack of economic opportunity may be the reason so many young girls choose single motherhood in the first place.
Policies are needed to economically empower women in America and address the unique challenges that many working women face, such as child care costs, low-paying and low-promotion jobs, an unfair tax code, and single motherhood. In this paper, we begin by addressing problems currently facing female workers before discussing current solutions and their flaws. Lastly, we put forth policy proposals to begin the conversation on how to support women and help them create better lives for themselves and their families.
Problems Impeding Female Economic Opportunity
High child care costs, low-paying and low-promotion jobs, the structure of numerous tax and benefit programs, and raising a family on a single income are just a few of the economic challenges that disproportionately influence women. These factors reduce the rewards of women’s work and limit their workforce participation and advancement.
Child Care. Child care is a significant and growing expense for many families. In 2011, 61 percent of children under the age of five in the US were in some regular child care arrangement. Families with an employed mother and young children paid $143 per week on average for child care, up from $84 in 1985, according to the Census Bureau. This adds up to roughly 7 percent of family income being spent on child care. For families in poverty, child care can consume 30 percent or more of their monthly income. As the cost of child care increases, many mothers with young children may decide to leave the labor force to care for children or scale back the hours they work to balance household responsibilities.
There is a large literature showing the impact of child care costs on mothers’ labor market decisions, specifically that high child care costs are associated with less work, while subsidized child care costs are associated with more work. For example, using data from the 1999 National Survey of America’s Families, Blau and Tekin found that the child care subsidies in current welfare programs are associated with a 13-percentage-point increase in the likelihood of employment. Baker, Gruber, and Milligan studied the introduction of universal highly subsidized child care in Quebec in the late 1990s and found highly significant labor supply effects. Berger and Black evaluated the employment impact of two Kentucky child care subsidy programs in the early 1990s. They found that a weekly subsidy of $46 increased maternal employment by 8.4 to 25.3 percent.
Also, work effects are stronger on the extensive than the intensive margin, meaning the subsidies make it more likely that low-income single mothers work, but have little effect on hours worked. Compton and Pollak found that married women’s geographical proximity to their mothers or mothers-in-law improves their labor supply, which they use as a proxy of child care. Meyer and Rosenbaum found that higher expenditures on child care are associated with higher employment rates for single mothers.
On average, married mothers are more likely to leave the labor force because of child care costs than single mothers, largely because married mothers are more likely to have another wage earner in the household. In a review of the literature, Kimmel found that the estimated child price elasticities of employment for married women range anywhere from -0.74 to -0.2, with most estimates falling in the middle. This means that a 10 percent increase in child care costs is associated with a 7.4 percent decline in workforce participation. Kimmel found that most elasticity estimates for single mothers are close to zero. That said, low-income single mothers may be more sensitive to child care costs than single mothers generally, which can be attributed to welfare eligibility or a payment stream aside from work. In one of Kimmel’s earlier studies, she found that the labor supply elasticity of child care costs for low-income, unmarried white mothers can reach -0.35.
As this literature demonstrates, child care has a significant impact on female workforce participation. Consequently, the rising cost of child care limits economic opportunities available to women, who disproportionately leave the workforce as child care becomes more expensive or choose jobs with greater flexibility at the expense of pay and promotion.
The Gender Pay Gap. The gender pay gap has narrowed over time, but nonetheless still persists. Rising experience and educational investment alone explain approximately one-third of the narrowing of the wage gap from the 1980s to recent years, according to studies by Blau and Kahn and Weinberger and Kuhn. Although each new cohort of daughters into the labor force has fared better than their mothers, their earnings still do not surpass those of their fathers. In 2012, women earned 81 percent of the median pay of their male equivalents.
The question is whether the persistent wage gap stems from discrimination or from different professional and life choices made by women. For example, women are more likely than men to leave the labor force or cut back on hours worked for child-bearing, child-rearing, or household responsibilities.
Household responsibilities impact which careers women chose. England explained that women tend to choose “mother-friendly” jobs that maximize their earnings conditional on intermittent and flexible employment but sacrifice steeper wage trajectories in return. These responsibilities also impact women’s investment in on-the-job training and experience. Munasignhe, Reif, and Henriques found that women are less likely to invest in job-related skills because of their shorter expected workforce tenure.
When controlling for a wide variety of factors-educational attainment, work experience, occupation, career interruptions, part-time work, and overtime work-the US Department of Labor found that approximately three-fourths of the wage gap disappears. Using data from the National Longitudinal Survey of Youth, O’Neill found that work experience and part-time work explained roughly 40 percent of the wage gap. Occupational choices such as choosing a more flexible workplace explained an additional 25 percent. Time out of the labor force for child rearing and other family responsibilities explained 10 percent of the wage gap. Lastly, schooling, cognitive skills, and other testable factors accounted for all but 3 cents of the wage gap. Interestingly, O’Neill and O’Neill found that the wage gap actually becomes a wage premium when comparing the earnings of single childless women to single childless men ages 35-43.
Thus, although the level of discrimination is much smaller than what it initially appears to be, the gap that emerges from different professional choices is quite large. As such, policymakers should focus their attention on the latter. Additionally, it should be noted that in even the most critical study, an unexplained gender wage gap remains. This may be attributable to discrimination or other compensating variables such as different levels of benefits.
High Marginal Tax Rates and Other Federal Policies that Discourage Work. Many federal policies impose high marginal tax rates on women, which discourages their workforce participation. The Affordable Care Act (ACA) has added to the tax penalties that already exist in the tax code and acts as a disincentive to supply labor. According to research by Mulligan, the marginal tax rates from the ACA from phasing out the subsidy could reach 50 percent for some earners, after taking into account other benefit programs and marginal taxes. As per the Congressional Budget Office, the phaseout of the health insurance subsidies will result in an implicit tax on earnings, will reduce the total number of hours worked by about 1.5 to 2.0 percent between 2017 and 2024, and will lead to a reduction in aggregate compensation of about 1 percent.
These large declines in labor supply, whether they happen through cuts in hours or through fewer jobs, are likely to occur among low-wage workers. Given that the elasticity of labor supply for women is higher than for men and that women constitute a greater share of low-wage workers, it seems likely that women will disproportionately feel these effects.
Furthermore, married women face strong disincentives to work in the tax code. The disadvantageous tax treatment of a married couple’s income relative to two single individuals earning an equivalent amount has led to the notion of a marriage penalty. For example, Fichtner and Feldman pointed out that the tax code subsidizes single-worker families earning $60,000 while it taxes a two-earner household earning $60,000, which creates inequality among families earning identical wages. Dickert-Conlin found that most low-income couples are eligible for higher welfare benefits if they are separated rather than married. A recent study by Kearney and Turner shows how a family headed by a primary earner making $25,000 a year will take home less than 30 percent of a spouse’s earnings because of taxes and the phaseout of benefits.
Benefits aside, a single woman entering the workforce would pay a 10 percent tax rate on her first dollar earned, whereas a married woman entering the workforce would face a 25 percent tax rate if her husband earned $60,000. Between taxes, lost benefits, and the high cost of child care, some married mothers may actually lose money from working. As a result, they may choose to stay home.
Even Social Security carries work disincentives for married women. Social Security benefits are funded by a payroll tax and based on earnings. For married couples, Social Security benefits are based on whichever spouse earned more (which tends to be the husband). As a result, married women often receive the same Social Security benefits whether or not they work, but if they work, they are subject to a payroll tax. This, not surprisingly, discourages married women from working.
In addition to the structure of many tax and benefit programs, maternity leave policies may impede women’s work. As per data compiled by the Organization for Economic Cooperation and Development (OECD), of the 38 OECD countries, the US is the only one that does not mandate any paid leave for new mothers. In the vast majority of countries, either the government or the employer steps in to provide the financial support. The US does guarantee that at the time of birth of a new baby, parents can take 12 weeks off to look after the child without fear of losing their job. However, even on this count, the US ranks much lower than most other countries, with the median OECD country guaranteeing 13 months.
There is evidence that paid leave makes it easier for women to work and have higher lifetime earnings. Ruhm and Teague found that paid parental leave policies are associated with higher employment-to-population ratios and decreased unemployment for all workers. They also found that moderate paid leave periods-10 to 25 weeks-are associated with higher labor-force participation rates for women in these countries than unpaid leave. Consequently, the current level of paid leave offered to new parents in the United States may limit women’s participation and earnings potential.
Economic Challenges Facing Young, Low-Income Women. Despite the nearly 40 percent drop in teen childbearing over the past two decades, the US has one of the highest rates of teen birth in the industrialized world, according to Kearney and Levine. Substantial research suggests that teenage childbearing has lifelong economic consequences. It reduces the likelihood of graduating from high school by 5 to 10 percentage points, reduces annual incomes, and may increase the probability that the teenager will need cash assistance.
While a number of complicated factors contribute to teenage pregnancy rates, Kearney and Levine found that growing up in an environment where there is little chance of social and economic advancement can lead young women to have babies outside of marriage. Women with a disadvantaged background-who grew up in single-parent homes and poverty-are significantly more likely to give birth as teens than girls without these disadvantages. Panel Study of Income Dynamics data from 2003 show that in a sample of women ages 20 to 35, 24 percent gave birth before age 20, but among the subsample of women born into poverty, nearly 49 percent gave birth before the age of 20. This suggests that investing in young women’s economic opportunity is vital for their personal and professional trajectory.
A key component of young women’s economic success is education; however, significant disincentives toward education exist in the current system of welfare payments that may work against young women, particularly those with low incomes.
An interesting paper by Dave, Reichman, and Corman offers a look at these policies. The authors concluded that welfare reform in the mid-1990s, which put in place important and needed reforms for welfare recipients to work to receive benefits, may have led to a shift away from education. Using data from the Current Population Survey, they found that welfare reform increased the probability of high school graduation for teenage girls by 9-13 percent, but it reduced the probability that adult women (women over age 20) would attend high school or college by 20-25 percent.
Using variation across states in eligibility requirements and specific program rules, the authors found that states that supported schooling as an alternative to work were able to reduce the negative impact of welfare reform on education.
Low-skilled workers face particular challenges in today’s economy. Beginning in the 1980s, there has been downward pressure on the wages of low-skilled workers in the US. This trend has disproportionately impacted women, who comprise 64 percent of hourly workers earning the minimum wage or less. There is strong evidence that technological progress is likely the largest reason for the declining demand for low-skilled workers. This suggests not only that better education is needed, but also that wage support may be needed to soften the transition.
Current and Proposed Policy Solutions and Their Flaws
Many policies and policy proposals are targeted toward improving economic opportunity for working women. Unfortunately, many of these policies fail to provide the necessary support, are aimed at the wrong problem, or may make the situation worse.
Child Care Credits and Subsidies. A variety of government programs subsidize child care; however, none provide comprehensive support. The first is the Child Care and Development Fund (CCDF). This program is administered by the Department of Health and Human Services and provides block grants to the states to assist low-income families in attaining child care for children under the age of 13. For fiscal year 2014, the funding of CCDF was $5.3 billion.
Federal law states that children are eligible for services under CCDF if their family income is at or below 85 percent of the state median income; however, the majority of states set eligibility limits below that. Families currently on welfare, specifically Temporary Assistance for Needy Families (TANF), are usually given priority for the funds, leaving low-income families on the verge of welfare without service. Mezey, Schumacher, and Greeberg found that fewer than 30 percent of those leaving welfare were receiving a child care subsidy. According to a survey by the Department of Health and Human Services across 17 states, only 16 percent of income-eligible families were receiving subsidies.
The child care tax credit provides a tax credit ranging from 20 to 35 percent for eligible child care costs, up to $3,000 for one child and $6,000 for two or more children. The credit is nonrefundable, and as a result, many low-income families do not meet the eligibility requirements. Only 8 percent of benefits went to households with incomes less than $30,000 in 2006, according to an analysis by the Tax Policy Center. Additionally, the size of the credit is far below the average cost of child care and not indexed to inflation. In 2011, less than 6 percent of income returns claimed the credit, according to Internal Revenue Service (IRS) data. Education-related child care costs are not eligible for the tax credit.
There is also an employer-based child care tax exclusion. Under this exclusion, employees can set aside $5,000 from their pretax salary for child care expenses. Employers can choose whether or not they offer the exclusion. Higher-income families generally benefit more from the exclusion, since the excluded income avoids both income and payroll taxes.
Several other government support programs may offset the cost of child care, albeit indirectly. For example, the child tax credit is a tax credit of up to $1,000 per child under the age of 17. Presumably, this could be used to offset some of the costs of child care, but mostly for middle-class families. The Tax Policy Center shows that the largest beneficiaries are those with incomes between $75,000 and $100,000. Additionally, the earned income tax credit (EITC) may be used to offset child care-related expenses for low-income families, although it need not be. Regardless, these programs have failed to close the gap on the rising costs of child care, and the fact that up to 30 percent of family income is spent on child care is a signal that child care reform is much needed.
Female Wage Gap and Work Disincentives. To the extent that the wage gap reflects discrimination, some have proposed new antidiscrimination laws. The Paycheck Fairness Act, among other things, makes employers who violate sex discrimination prohibitions liable in a civil action suit for either compensatory or punitive damages. However, laws are already on the books against gender discrimination: the Equal Pay Act of 1963 and the Fair Labor Standards Act make it illegal to pay workers of different genders different amounts for the same job. It is unclear what additional benefits the Paycheck Fairness Act will bring, and it may decrease the number of women hired.
There is movement to provide paid leave to working women. California, New Jersey, and Rhode Island have paid maternity leave policies in place. There is movement at the federal level to do the same, although nothing has yet been passed. In 2013, Representative Rosa DeLauro (D-CT) and Senator Kirsten Gillibrand (D-NY) introduced the Family and Medical Insurance Leave Act (FAMILY Act), which promises to relieve the financial burden of taking unpaid time off, providing paid leave for nearly every US worker for up to 12 weeks of partial income for a worker’s own serious health condition, which includes pregnancy and childbirth recovery. Family leave is also paid for the serious health condition of a child, parent, spouse, or domestic partner; the birth or adoption of a child; and particular military caregiving and leave purposes. It enables workers to earn 66 percent of their monthly wages up to a capped amount. Additionally, the president’s fiscal year 2015 budget requests a $5 million State Paid Leave Fund.
However, providing more paid leave may reduce women’s wages. According to a Pew report that relies on OECD data, countries that offer more liberal parental leave policies have higher pay gaps among men and women ages 30 to 34. This is likely because the duration of benefits encourages women to leave the workforce for longer, which reduces their on-the-job training, work experience, and promotion potential. A paper by Ruhm suggests that while short periods of leave may have marginal impacts on females’ earnings, longer paid entitlements are associated with substantial wage reductions due to time taken out of the labor force. Additionally, the FAMILY Act is funded by a small increase in payroll taxes, which results in lower wages.
Lastly, to bolster wages, especially for low-skilled women, some have proposed raising the minimum wage. This was a central topic in a recent Senate Budget Committee hearing on “Expanding Economic Opportunity for Women and Families.” Women comprise 64 percent of hourly workers earning the minimum wage or less.
However, sizable evidence shows that raising the minimum wage would result in unemployment, especially among the low-skilled workers. In a review of the literature, Neumark and Wascher found that the vast majority of studies reveal negative employment effects of raising the minimum wage and “overwhelming evidence of stronger disemployment effects” for low-skilled workers. The Congressional Budget Office (2014) recently reported that raising the minimum wage to $10.10 would result in 500,000 lost jobs.
There is also evidence that impoverished workers constitute a small percentage of minimum-wage earners, suggesting that more targeted approaches may be warranted. Burkhauser and Sabia found that minimum-wage increases have tended to have no effect on state poverty rate, and only 11 percent of workers in poor households would benefit from raising the federal minimum wage from $7.25 to $9.50.
Reforms are needed to help working women improve economic opportunity for themselves and their families. Clearly, a healthy, vibrant economy would go a long way in improving women’s job choice, wages, and advancement. There is even evidence that a growing economy could reduce gender discrimination by increasing women’s job choices. As such, policies that may compromise economic growth or job creation, such as the ACA or minimum wage, should be carefully weighed, and policies that encourage growth should be vigorously pursued. Numerous pro-growth policies have been documented and proposed; consequently, we will not go into detail on those reforms in this paper.
While pro-growth policies should be the base of reform, they are far from the solution to improving working women’s opportunity. Even in periods of substantial economic growth, such as the late 1990s, women faced significant work disincentives, often as the direct result of federal policies. Tax and entitlement reform are sorely needed to encourage women’s labor force participation. Additionally, policies are needed to address some of the largest issues facing working women in the 21st century, specifically high child care costs, depressed wages, and the skills gap. What follows are detailed descriptions of these reforms.
A New System of Child Care Credits and Support. There is significant agreement on both sides of the political aisle that work is a vital component of economic opportunity and that work incentives are a vital part of assistance programs. Expanding support for child care accomplishes both objectives. Additionally, the lack of affordable child care options has a significant impact on women’s professional trajectories, keeping many women in low-paying, low-promotion jobs or out of the work force entirely.
We propose streamlining the current child care subsidies and tax credits, which are needlessly confusing, have low recipient rates, and leave out many low-income women who need them the most. The core of our proposal is to substantially increase the amount of the child care tax credit and make it refundable. This would reduce the need for CCDF, and those on welfare no longer would be given priority for child care over other low-income families. It would reduce the need for the employer-sponsored tax credit, making child care support available regardless of employer options. Policymakers should also consider supporting child care expenses for educational attainment-an important component of upward mobility-presuming education does not become a substitute for work. The costs of child care support could be offset in part by increased payroll and income tax collection from the increasing number of working mothers and reduced welfare enrollment.
Some may argue that child care tax credits or subsidies unfairly reward working parents over those who choose to stay home. However, this is incorrect. Recall that workers pay payroll and income taxes. Allowing tax relief for work-related expenses adds more neutrality, not less.
Others may point out that child care may reduce cognitive achievement in children. Baker, Gruber, and Milligan found that children in Quebec’s universal child care program are worse off in a variety of behavioral and health dimensions, including illness.
Quality of care may mitigate some of these effects, although more research is needed. For example, Keane and Bernal assess the cognitive outcomes from informal care (provided by family or neighbors) versus formal care (provided by a child care facility). The results are very different. The estimate of formal care on child test scores is positive but statistically insignificant, while an additional year of informal care causes a 2.6 percent reduction in test scores. This has implications for children from low-income families, who are twice as likely to be in informal care than formal care, likely because of cost.
Some have proposed increasing the child tax credit, which provides a tax credit of up to $1,000 per child, instead of providing funding for child care specifically. There are several benefits to this approach. More income is generally correlated with better outcomes for children, and reducing taxes on income may encourage work. However, the labor supply effects of directly offsetting child care costs appear to be even stronger, especially for low-income women. As such, we believe that directly offsetting the cost of child care is a better option for improving women’s economic outcomes in the long-run.
Reforming the EITC. A more targeted alternative than the minimum wage to relieving downward wage pressure is expanding the EITC, which primarily helps low-income single mothers. The EITC is a refundable tax credit and the largest cash payment to low-income families aside from food stamps. In 2014, the maximum credit is $5,460 for families with two children, $3,305 for families with one child, and $496 for those with no children.
The economic theory behind the EITC is that increasing the rewards of work will lead more people to enter the labor force. In a review of the literature, Eissa and Hoynes found overwhelming evidence that the EITC increases labor force participation for single mothers, with no discernible effect on hours worked. Meyer and Rosenbaum found that 60 percent of a 9-percentage-point increase in single mothers’ employment between 1984 and 1996 was due to expansions of the EITC and other tax changes. Eissa and Liebman found that the EITC expansion in the Tax Reform Act of 1986 significantly increased labor force participation, especially among less-educated women. Dickert, Houser, and Scholz estimated that EITC expansions in the 1990s moved more than half a million families from welfare to work.
The benefits of the EITC go beyond the period of direct receipt. Dahl, DeLeire, and Schwabish found that the earnings growth potential is higher for single mothers who claimed the EITC than those who did not. Dahl and coauthors found that the EITC increases the number of women who are eligible for Social Security retirement benefits and the amount these women receive. Retirement security is particularly important for women for reasons we will discuss later in the paper.
The EITC has also been found to improve children’s outcomes. This is part of a broader literature by Solon, Becker and Tomes, and others, which suggests that parents with greater earnings can invest more in their children, and thus children’s potential earnings are increased. Hoynes, Miller, and Simon found that $1,000 in EITC income is associated with 6.7 to 10.8 percent reduction in the low-birth-weight rate, a proxy for maternal investment, with larger impacts for births to African American mothers.
Morris, Duncan, and Rodrigues estimated that a $1,000 increase in annual income increases young children’s achievement by 5-6 percent of a standard deviation. Similarly, using data from the children of the National Longitudinal Survey of Youth, Dahl and Lochner found that a $1,000 increase in income as a result of the EITC raises children’s combined math and reading test scores by 6 percent of a standard deviation over two to three years.
Studies show that increased income has the greatest impact on children’s outcomes when they are young and when the family has a low income because the payments are disproportionately larger and more likely to reduce material duress. For these reasons and others, Neumark and Wascher contend that the EITC is a more effective antipoverty program than the minimum wage or welfare.
That said, the ETIC has several shortcomings that need to be addressed before an expansion is considered. First, there is a significant amount of fraud. The IRS reports that 21-26 percent of EITC claims are paid in error. Second, the EITC payment comes as a lump payment at the end of the year. More-frequent payments would benefit people living paycheck to paycheck. There is an Advance EITC payment program that allows a limited portion of EITC funds ($1,750 maximum) to be received as a regular part of one’s pay. But according to the Government Accountability Office, only 3 percent of eligible taxpayers used the Advance EITC program during 2002-04. Third, the EITC has significant disincentives for childless workers, who receive a much smaller payment, and also for married women, because it is calculated on the basis of family income, not individual income. This may discourage married women from working or even encourage single motherhood. The evidence for the former is substantial, while the evidence for the latter is mixed.
There is wide agreement that EITC should be more neutral with respect to family structure. Holtzblatt and Robelein propose adding a second-earner deduction to the EITC, which we have supported. Additionally, increasing the amount of the credit for childless workers would bring more parity between those with and without children. An expense is clearly associated with these expansions; however, increased payroll taxes, income taxes, and decreased welfare reliance could help offset some of these costs.
Lastly, modestly boosting the size of the ETIC payment could encourage more women to enter the workforce. To pay for this expansion, the phaseout could be made steeper. We say this with great caution because women’s labor supply elasticities tend to be much larger than men’s, suggesting they are more likely to phase out hours worked when faced with higher marginal tax rates. While this sensitivity can be observed across several policies, which we will describe, there is little to no evidence that the EITC discourages work during the phaseout of EITC benefits. As such, we believe this reform could encourage more women to enter the workforce without a noticeable reduction in hours worked.
Improving Opportunity for Young Girls through Education. Policymakers concerned about improving economic opportunity for women cannot turn a blind eye to the plight of many young, unwed mothers. Research shows that the increased availability of contraception has reduced the rate of teenage pregnancy, although contraception and other traditional policy prescriptions for reducing teenage pregnancy, such as sex education, are not panaceas.
Some have suggested increasing education around the economic consequences of teenage pregnancy, either through social media campaigns or in the classroom. New York City tried this approach. It was also the topic of a recent paper by Kearney and Levine titled, “The Impact of MTV’s 16 and Pregnant on Teen Childbearing.” Eighteen months after the show’s introduction, there was a 5.7 percent reduction in teen births, accounting for roughly one-third of the overall decline in teen births, with no significant increase in abortions. We believe these types of information campaigns are worth exploring.
However, to address the phenomenon of teenage pregnancy, we need a more holistic approach to the economic disadvantages that these girls face growing up in an environment of poverty and low expectations about their future. This begins with education.
In a recent paper, we emphasized school choice as an important tool for economic mobility of children born into low-income households. This is especially applicable for the children of unmarried mothers. Unmarried mothers earn about $23,000 a year, roughly a quarter of the median family income of married mothers. This income level limits the neighborhoods in which those families can live, and as such, the quality of schools their children can attend. We suggest open enrollment and a lottery system to allow these children an opportunity to attend the schools of their choice. Research suggests that school choice results in lower truancy rates for children entering their first-choice schools and in better scores in reading and math.
In a 2011 paper, Deming, Hastings, Kane, and Staiger studied the impact of a public school choice lottery in North Carolina’s Charlotte-Mecklenburg Schools (CMS) on college enrollment and degree completion. CMS implemented an open-enrollment scheme for public schools in 2002. Under this scheme, students were guaranteed admission to their local public school but were allowed to rank their top three schools in the district. If these schools were overenrolled, the decision of who would attend was made by a lottery. Students from low-income and poorly performing high schools actively participated in the program and often chose higher-performing high schools over their neighborhood schools.
The authors found a particularly significant impact of school choice on girls. Girls respond to the chance to attend a better school with higher grades and increases in college-preparatory course taking. Girls who attended their first-choice school were 14 percentage points more likely to complete a four-year college degree.
Another way to encourage the education of young women, especially those from low-income families, is to make school attendance by dependents an eligibility requirement for welfare programs. For example, one interesting study evaluated the impact of Wisconsin’s Learnfare program, a welfare waiver program that sanctioned the welfare benefits of families whose teenage children did not meet school attendance requirements. Dee found that Learnfare was extremely successful at targeting at-risk students and promoting school attendance among this group. Our policy suggestion is along the same lines. Currently, 15 states do not require dependents to be enrolled in school when their families are receiving TANF payments. We propose making this a priority.
In addition to these reforms, some may propose investment in early childhood education and development to improve education attainment, decrease welfare reliance, and increase lifetime earnings, especially for low-income children. However, studies show that the efficacy of prekindergarten programs is mixed. We believe that some of the same benefits can be attained at a lower cost with a child care expansion.
We end with three caveats. First, women have made incredible strides in the labor force and in education. We wholeheartedly celebrate this progress, and this study is in no way intended to downplay those advancements. Rather, our intention is to ensure this progress continues instead of slowing down.
Second, many current policies inadvertently create work and marriage disincentives that women disproportionately face. We recognize that many women may not choose to work outside the home or marry. We are seeking not to influence these women’s choices, but to maximize the choices available to women professionally and personally by removing many of the disincentives currently in place.
Last, by focusing on women, we do not mean to minimize the real economic challenges facing other demographics such as men or minority groups. Many of these reforms would help them too, and additional policy proposals should be considered that assist those groups.
That said, women face unique economic challenges, many of which have been complicated by current government policies. To improve economic opportunity in America, we must critically examine any and all factors that could hold back more than half of the population from full economic opportunity.
1. US Bureau of Labor Statistics, Women in the Labor Force: A Databook (2013), 1, www.bls.gov/cps/wlf-databook-2012.pdf.
2. Erin Currier et al., Women’s Work: The Economic Mobility of Women across a Generation (Pew Charitable Trusts, April 2014), 1, www.pewstates.org/uploadedFiles/PCS/Content-Level_Pages/Reports/2014/Womens-Work-Report-Economic-Mobility-Across-a-Generation.pdf.
3. US Bureau of Labor Statistics, Women in the Labor Force, 1.
4. National Center for Education Statistics, Advance Release of Selected 2013 Digest Tables (2013), http://nces.ed.gov/programs/digest/2013menu_tables.asp.
5. US Bureau of Labor Statistics, Characteristics of Minimum Wage Workers: 2012 (February 2013), www.bls.gov/cps/minwage2012.pdf.
6. US Bureau of Labor Statistics, Women in the Labor Force, 2.
7. Nada Eissa and Hilary Hoynes, “Taxes and the Labor Market Participation of Married Couples: The Earned Income Tax Credit,” Journal of Public Economics 88, no. 9-10 (2004): 1931-58.
8. Richard V. Reeves and Joanna Venator, Gender Gaps in Relative Mobility (Brookings Institution, November 12, 2013), www.brookings.edu/blogs/social-mobility-memos/posts/2013/11/12-gender-gaps-relative-mobility-reeves.
9. Kim Parker, Paul Taylor, and Wendy Wang, Breadwinner Moms (Pew Research Center, May 16, 2013), www.pewsocialtrends.org/files/2013/05/Breadwinner_moms_final.pdf.
10. Hilary Hoynes, Marianne E. Page, and Ann Huff Stevens, “Poverty in America: Trends and Explanations,” Journal of Economic Perspectives 20, no. 1 (Winter 2006): 47-68.
11. Raj Chetty et al., “Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility” (working paper, National Bureau of Economic Research, January 2014).
12. Melissa S. Kearney and Phillip B. Levine, “Why Is the Teen Birth Rate in the United States So High and Why Does It Matter?” Journal of Economic Perspectives 26, no. 2 (Spring 2012): 141-63.
13. Lynda Laughlin, Who’s Minding the Kids? Child Care Arrangements: Spring 2011 (US Department of Commerce, April 2, 2013), www.census.gov/prod/2013pubs/p70-135.pdf.
14. Costs vary on the basis of children’s ages, the number of children, the quality of care, and across state lines. For example, the average annual cost of full-time care for an infant in center-based care ranges from $4,863 in Mississippi to $16,430 in Massachusetts. See Laughlin, Who’s Minding the Kids?; and Child Care Aware America, Parents and the High Cost of Child Care (2013), http://usa.childcareaware.org/sites/default/files/cost_of_care_2013_103113_0.pdf.
15. Laughlin, Who’s Minding the Kids? 15.
16. This literature includes Susan L. Averett, Elizabeth H. Peters, and Donald M. Waldman, “Tax Credits, Labor Supply, and Child Care,” Review of Economics and Statistics 79, no.1 (1997): 125-35; Mark C. Berger and Dan A. Black, “Child Care Subsidies, Quality of Care, and the Labor Supply of Low-Income, Single Mothers,” Review of Economics and Statistics 74, no. 4 (November 1992): 635-42; April Brayfield, Child Care Costs as Barrier to Women’s Employment (US Department of Labor, September 1992); Peter Cattan, “Child-Care Problems: An Obstacle to Work,” Monthly Labor Review (October 1991): 3-9; Rachel Connelly, ‘‘The Importance of Child Care Costs to Women’s Decision Making,” in The Economics of Child Care, ed. David M. Blau (New York: Russell Sage Foundation, 1991), 87-118; Anne Johansen, Arleen Liebowitz, and Linda Waite, “The Importance of Child Care Characteristics to Choice of Care,” Journal of Marriage and the Family 58, no. 3 (1996): 759-72; Jean Kimmel, “The Effectiveness of Child Care Subsidies in the Welfare to Work Transition of Low-Income Single Mothers,” American Economic Review 85, no. 2 (1995): 271-5; Jean Kimmel, “Child Care Costs as a Barrier to Employment for Married and Single Mothers,” Review of Economics and Statistics 80, no. 2 (May 1998): 287-99; Jean Kimmel, “The Role of Child Care Assistance in Welfare Reform,” Employment Research 1, no. 2 (1994): 1-4; Karen Oppenheim Mason and Karen Kuhlthau, “The Perceived Impact of Child Care Costs on Women’s Labor Supply and Fertility,” Demography 29, no. 4 (November 1992): 523-43; Marcia K. Myers and Theresa Heitze, “The Performance of the Child-Care Subsidy System,” Social Review 73, no. 1 (March 1999): 37-64; Martin O’Connell and David Elliot Bloom, “Juggling Jobs and Babies: America’s Child Care Challenge,” Population Trends and Public Policy, no. 12 (February 12, 1987); Harriet B. Presser and Wendy Baldwin, “Child Care as a Constraint on Employment: Prevalence, Correlates, and Bearing on the Work and Fertility Nexus,” American Journal of Sociology 85, no. 5 (March 1980): 1202-13; David C. Ribar, “Child Care and Labor Supply of Married Women: Reduced Form Evidence,” Journal of Human Resources 27, no. 1 (Winter 1992): 134-65; and David C. Ribar, “A Structural Model of Child Care and Labor Supply of Married Women,” Journal of Labor Economics 13, no. 3 (July 1995): 558-97.
17. David Blau and Erdal Tekin, “The Determinants and Consequences of Child Care Subsidies for Single Mothers,” Journal of Population Economics 20, no. 4 (May 2003): 719-41.
18. Michael Baker, Jonathan Gruber, and Kevin Milligan, “Universal Childcare, Maternal Labor Supply, and Family Well-Being,” Journal of Political Economy 116, no. 4 (2008): 709-45.
19. Berger and Black, “Child Care Subsidies, Quality of Care.”
20. Janice Compton and Robert A. Pollak, “Family Proximity, Childcare, and Women’s Labor Force Attachment” (working paper, National Bureau of Economic Research, December 2011).
21. Bruce D. Meyer and Dan T. Rosenbaum, “Making Single Mothers Work: Recent Tax and Welfare Policy and Its Effects,” Quarterly Journal of Economics 116, no. 3 (August 2001): 1063-114.
22. Kimmel, “Child Care Costs as a Barrier.”
23. Kimmel, “The Effectiveness of Child Care Subsidies.”
24. Peter Kuhn and Catherine Weinberger, “The Narrowing of the US Gender Earnings Gap, 1959-1999: A Cohort-Based Analysis” (working paper, National Bureau of Economic Research, March 2006).
25. Francis D. Blau and Lawrence M. Kahn, “Gender Differences in Pay,” Journal of Economic Perspectives 14, no. 4 (Fall 2000).
26. US Bureau of Labor Statistics, Women in the Workforce.
27. Jacob Mincer and Solomon Polachek, “Family Investments in Human Capital: Earnings of Women,” in Marriage, Family, Human Capital and Fertility, ed. Theodore W. Schultz (UMI, 1974); and June E. O’Neill and Dave O’Neill, What Do Wage Differentials Tell Us about Labor Market Discrimination? (working paper, National Bureau of Economic Research, April 2005).
28. England found that women choose more “mother-friendly” jobs, which maximize their earnings conditional on intermittent and flexible employment, but trade off on-the-job training, higher earnings, and steeper wage trajectories to do so. See Paula England, “Gender Inequality in Labor Markets: The Role of Motherhood and Segregation,” Oxford Journal of Social Politics 12, no. 2 (2005): 264-88.
29. Lalith Munasinghe, Tania Reif, and Alice Henriques, “Gender Gap in Wage Returns to Job Tenure and Experience,” Labour Economics 15, no. 6 (December 2008): 1296-316.
30. Natalia A. Kolesnikova and Yang Liu, Gender Wage Gap May Be Much Smaller Than Most Think (Federal Reserve Bank of St. Louis, October 2011).
31. June E. O’Neill, The Disappearing Gender Wage Gap (National Center for Policy Analysis, June 22, 2012), www.ncpa.org/pub/ba766.
32. June E. O’Neill and Dave M. O’Neill, The Declining Importance of Race and Gender in the Labor Market: The Role of Federal Employment Policies (Washington, DC: AEI Press, 2012).
33. Reeves and Venator, Gender Gaps in Relative Mobility.
34. Casey Mulligan, “Average Marginal Labor Income Tax Rates under the Affordable Care Act” (working paper, National Bureau of Economic Research, August 2013).
35. US Congressional Budget Office, Labor Market Effects of the Affordable Care Act: Updated Estimates (February 2014), www.cbo.gov/sites/default/files/cbofiles/attachments/45010-breakout-AppendixC.pdf.
36. Jason J. Fichtner and Jacob Feldman, “Taxing Marriage: Microeconomic Behavioral Responses to the Marriage Penalty and Reforms for the 21st Century” (working paper, Mercatus Center, September 2012).
37. Stacy Dickert-Conlin, “Taxes and Transfers: Their Effects on the Decision to End a Marriage,” Journal of Public Economics 73 (1999): 217-40.
38. Melissa S. Kearney and Lesley J. Turner, Giving Secondary Earners a Tax Break: A Proposal to Help Low- and Middle-Income Families (Brookings Institution, December 2013), www.brookings.edu/~/media/research/files/papers/2013/12/04%20proposal%20help%20low%20income%20families%20kearney/04%20proposal%20help%20low%20income%20families%20kearney.pdf.
39. Fitchtner and Feldman, “Taxing Marriage.”
40. Sita Slavov, “Social Security’s War on Working Wives,” Real Clear Markets, October 17, 2012, www.realclearmarkets.com/articles/2012/10/17/social_securitys_war_on_working_wives_99940.html.
41. Gretchen Livingston, “Among 38 Nations, U.S. Is the Outlier When It Comes to Paid Parental Leave,” Pew Research Center, December 12, 2013, www.pewresearch.org/fact-tank/2013/12/12/among-38-nations-u-s-is-the-holdout-when-it-comes-to-offering-paid-parental-leave/.
42. Jutta M. Joesch, “Paid Leave and the Timing of Women’s Employment before and after Birth,” Journal of Marriage and Family 59, no. 4 (November 1997).
43. Christopher J. Ruhm and Jackqueline L. Teague, “Parental Leave Policies in Europe and North America” (working paper, National Bureau of Economic Research, March 1995).
44. Kearney and Levine, “Why Is the Teen Birth Rate in the United States So High and Why Does It Matter?”
45. Jason M. Fletcher and Barbara L. Wolfe, “Education and Labor Market Consequences of Teenage Childbearing: Evidence Using the Timing of Pregnancy Outcomes and Community Fixed Effects,” Journal of Human Resources 44, no. 2 (2009).
46. Melissa S. Kearney and Phillip B. Levine, “Explaining Recent Trends in the U.S. Teen Birth Rate” (working paper, National Bureau of Economic Research, March 2012).
47. Lloyd D. Grieger, Robert F. Schoeni, and Sheldon Danzinger, “Accurately Measuring the Trend in Poverty in the United States Using the Panel Study of Income Dynamics,” Journal of Economic and Social Measurement 34, no. 2-3 (2009): 105-17.
48. Dhaval M. Dave, Nancy E. Reichman, and Hope Corman, “Effects of Welfare Reform on Educational Acquisition of Young Adult Women” (working paper, National Bureau of Economic Research, November 2008).
49. Jason R. Abel and Richard Deitz, “Job Polarization and Rising Inequality in the Nation and the New York-Northern New Jersey Region,” Current Issues in Economics and Finance 18, no. 7 (2012).
50. US Bureau of Labor Statistics, Characteristics of Minimum Wage Workers.
51. See International Monetary Fund, World Economic Outlook (2007), 31-65; and Organization for Economic Cooperation and Development, Offshoring and Employment: Trends and Impacts (2007).
52. Karen E. Lynch, The Child Care and Development Block Grant: Background and Funding (Congressional Research Service, September 2012), http://greenbook.waysandmeans.house.gov/sites/greenbook.waysandmeans.house.gov/files/2012/documents/RL30785%20v2_gb.pdf.
53. Nancy Burstein and Jean I. Layzer, Patterns of Child Care Use among Low-Income Families (National Study of Child Care for Low-Income Families, September 2007), www.acf.hhs.gov/sites/default/files/opre/patterns_childcare.pdf.
54. Jennifer Mezey, Mark Greenberg, and Rachel Schumacher, The Vast Majority of Federally-Eligible Children Did Not Receive Child Care Assistance in FY 2000 (Center for Law and Social Policy, October 2002), www.clasp.org/resources-and-publications/archive/0108.pdf.
55. Jeffrey Rohaly, Reforming the Child and Dependent Care Tax Credit (Tax Policy Center, 2005), www.taxpolicycenter.org/UploadedPDF/411474_child_tax.pdf.
56. Elaine Maag, “Taxation and the Family: How Does the Tax System Subsidize Child Care Expenses?” in The Tax Policy Briefing Book: A Citizens’ Guide for the 2012 Election and Beyond (Tax Policy Center, January 12, 2013), www.taxpolicycenter.org/briefing-book/key-elements/family/child-care-subsidies.cfm.
57. Leonard E. Burman and Laura Wheaton, Who Gets the Child Tax Credit? (Tax Policy Center, October 17, 2005), www.taxpolicycenter.org/UploadedPDF/411232_child_tax_credit.pdf.
58. Paycheck Fairness Act, S.84, 113th Cong. (January 23, 2013), http://beta.congress.gov/bill/113th-congress/senate-bill/84.
59. Diana Furchtgott-Roth, The Employment Effect of the Paycheck Fairness Act (Hudson Institute, November 2010), www.hudson.org/content/researchattachments/attachment/836/dfr_paycheck_fairness.pdf.
60. National Partnership for Women and Families, The Family and Medical Insurance Leave Act (February 2014), www.nationalpartnership.org/research-library/work-family/paid-leave/family-act-fact-sheet.pdf.
61. US Department of Labor, FY 2015 Department of Labor Budget in Brief (2014), www.dol.gov/dol/budget/2015/PDF/FY2015BIB.pdf.
62. Gretchen Livingston, The Link between Parental Leave and the Gender Pay Gap (Pew Research Center, December 20, 2013), www.pewresearch.org/fact-tank/2013/12/20/the-link-between-parental-leave-and-the-gender-pay-gap/.
63. Christopher J. Ruhm, “The Economic Consequences of Parental Leave Mandates: Lessons from Europe,” Quarterly Journal of Economics 108, no. 1 (February 1998): 285-317.
64. National Partnership for Women and Families, The Family and Medical Insurance Leave Act.
65. US Bureau of Labor Statistics, “Table 7. Employed Wage and Salary Workers Paid Hourly Rates with Earning at or below Prevailing Federal Minimum Wage by Age and Sex, 2012 Annual Averages,” 2012, www.bls.gov/cps/minwage2012tbls.htm#7.
66. One clear exception is a study by Card and Krueger of fast food restaurants in New Jersey and Pennsylvania both before and after the 1992 increase in the New Jersey state minimum wage. They found that the minimum wage actually increased employment. See David Card and Alan B. Krueger, “Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania,” American Economic Review 84, no. 4 (September 1994): 772-93.
67. David Neumark and William Wascher, “Minimum Wages and Employment” (working paper, Institute for the Study of Labor, January 2007).
68. Douglas W. Elmendorf, The Effects of a Minimum-Wage Increase on Employment and Family Income (US Congressional Budget Office, February 2014), www.cbo.gov/publication/44995.
69. Richard B. Burkauser and Joseph J. Sabia, “Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?” Southern Economic Journal 76, no. 3 (January 2010): 592-623.
70. In Gary Becker’s model of discrimination, he finds that employer discrimination can only flourish if the supply of employers is smaller than the demand for labor or if the discriminating employers do not face much competition. See Gary S. Becker, The Economics of Discrimination (Chicago: University of Chicago Press, 1971).
71. Alan D. Viard, The Child Care Tax Credit: Not Just Another Middle-Income Tax Break (AEI, September 27, 2010), www.aei.org/files/2010/09/27/On-the-Margin-Sep-27-2010.pdf.
72. Michael Baker, Jonathan Gruber, and Kevin Milligan, “Universal Childcare, Maternal Labor Supply, and Family Well-Being,” Journal of Political Economy 11, no. 4 (2008): 709-45.
73. In a review of the literature, Waldfogel concludes that more research is needed to assess the outcomes on children of various types of child care. See Jane Waldfogel, “Childcare, Women’s Employment, and Child Outcomes,” Journal of Population Economics 15, 527-48.
74. Laughlin, Who’s Minding the Kids?
75. Zachary Goldfarb, “Breaking: Obama to Propose Expanding EITC and Child Tax Credit in Budget,” Washington Post, March 3, 2014.
76. Adam Carasso and Elaine Maag, “Taxation and the Family: What Is the Earned Income Tax Credit,” in The Tax Policy Briefing Book: A Citizens’ Guide for the 2012 Election and Beyond (Tax Policy Center, January 12, 2013), www.taxpolicycenter.org/briefing-book/key-elements/family/eitc.cfm.
77. Nada Eissa and Hilary Hoynes, “Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply,” Tax Policy and the Economy 20 (2006): 73-110, www.nber.org/papers/w11729. Also see Stacy Dickert, Scott Houser, and John Karl Scholz, The Earned Income Tax Credit and Transfer Programs: A Study of Labor Market and Program Participation (National Bureau of Economic Research, January 1995); Nada Eissa and Jeffrey B. Liebman, “Labor Supply Response to the Earned Income Tax Credit,” Quarterly Journal of Economics 111, no. 2 (May 1996): 605-37; David T. Ellwood, “The Earned Income Tax Credit,” National Tax Journal 53, no. 4 (December 2000): 1063-105; Jeffery Grogger, “The Behavioral Effects of Welfare time Limits,” American Economic Association 92, no. 2 (2003); V. Joseph Hotz and John Carl Scholz, The Earned Income Tax Credit (National Bureau of Economic Research, May 11, 2002); Michael P. Keane and Robert Moffit, “A Structural Model of Multiple Welfare Program Participation and Labor Supply,” International Economic Review 39, no. 3 (August 1998); Meyer and Rosenbaum, “Making Single Mothers Work”; and Nada Eissa, Austin Nichols, and Jesse Rothstein, Tax-Transfer Schemes and Wages: The Earned Income Tax Credit (National Bureau of Economic Research, 2005).
78. Bruce D. Meyer and Dan T. Rosenbaum, “Welfare, the Earned Income Tax Credit and the Labor Supply of Single Mothers,” Quarterly Journal of Economics 116, no. 3 (August 2001): 1063-114.
79. Eissa and Liebman, “Labor Supply Response to the Earned Income Tax Credit.”
80. Stacy Dickert, Scott Houser, and John Karl Scholz, “The Earned Income Tax and Transfer Programs: A Study of Labor Market and Program Participation,” in Tax Policy and the Economy, Volume 9, ed. James M. Poterba (Cambridge, MA: MIT Press, January 1995).
81. Molly Dahl, Thomas DeLeire, and Jonathan Schwabish, Stepping Stone or Dead End? The Effect of the EITC on Earnings Growth (Institute for the Study of Labor, April 2009), http://ftp.iza.org/dp4146.pdf.
82. Molly Dahl et al., The Earning Income Tax Credit and Expected Social Security Retirement Benefits among Low-Income Women (US Congressional Budget Office, March 2012).
83. Gary Solon, “Intergenerational Mobility in the Labor Market,” Handbook of Labor Economics 3, no. 3 (1999): 1761-800; and Gary Becker and Nigel Tomes, “An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility,” Journal of Political Economy 87, no. 6 (December 1979): 1153-89.
84. Hilary Hoynes, Douglas L. Miller, and David Simon, “Income, the Earned Income Tax Credit and Infant Health” (working paper, National Bureau of Economic Research, July 2012).
85. G.J. Duncan, P.A. Morris, and C. Rodrigues, “Does Money Really Matter? Estimating Impacts of Family Income on Young Children’s Achievement with Data from Random-Assignment Experiments,” Developmental Psychology 47, no. 5 (September 2011): 1263-79.
86. Gordon Dahl and Lance Lochner, “The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit,” American Economic Review 102, no. 5 (August 2012): 1927-56.
87. Duncan, Morris, and Rodrigues, “Does Money Really Matter?”; Priscilla Alderson, Young Children’s Rights Exploring Beliefs, Principles and Practice (London: Jessica Kingsley, 2008); Eric Dearing, Kathleen McCartney, and Beck A. Taylor, “Does Higher-Quality Early Child Care Promote Low-Income Children’s Math and Reading Achievement in Middle Childhood?” Child Development 80, no. 5 (September/October 2009): 1329-49; and Greg J. Duncan and Katherine Magnuson, “The Long Reach of Early Childhood Poverty,” in Pathways (Winter 2011): 22-27.
88. David Neumark and William Wascher, “The Effect of New Jersey’s Minimum Wage Increase on Fast-Food Employment: A Re-evaluation Using Payroll Records,” American Economic Review 90, no. 5 (2000): 1362-96.
89. See Internal Revenue Service, Fraud (April 10, 2014), www.eitc.irs.gov/Tax-Preparer-Toolkit/faqs/fraud. Even with high levels of error, Zelenak found that enforcement for the EITC is stronger than other antipoverty transfer programs such as food stamps and TANF. This suggests that tax-based administration of welfare may produce superior and more cost-effective results than welfare-based administration. See Lawrence Zelenak, “Tax or Welfare? The Administration of the Earned Income Tax Credit,” UCLA Law Review 52, no. 6 (2005): 1867-917, http://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2269&context=faculty_scholarship.
90. Internal Revenue Service, EITC Eligibility and Rules Outlined (August 18, 2012), www.irs.gov/uac/EITC-Eligibility-Rules-Outlined.
91. US Government Accountability Office, Low Use and Small Dollars Paid Impede IRS’s Efforts to Reduce High Noncompliance (August 2007), www.gao.gov/assets/270/265295.pdf.
92. Robert Moffitt writes that virtually any economic model of marriage predicts that the offer of a benefit to an individual contingent entirely based on whether he or she is unmarried and has children will induce behavior that leads to a higher incidence of such events. See Robert Moffitt, “The Temporary Assistance for Needy Families Program,” in Means Tested Transfer Programs in the United States, ed. Robert A. Moffitt (Chicago: University of Chicago Press, 2003), 291-364; Eissa and Hoynes, “Taxes and the Labor Market Participation of Married Couples”; and David T. Ellwood, “The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements,” National Tax Journal 53, no. 4 (December 2000): 1063-105.
93. Stacy Dickert-Conlin and Scott Houser, “EITC and Marriage,” National Tax Journal 55, no. 1 (March 2002): 25-40.
94. Janet Holtzblatt and Robert Rebelein, “Measuring the Effect of the EITC on Marriage Penalties and Bonuses” (working paper, Northwestern University/University of Chicago Joint Center for Poverty Research, 2000). Also see Aparna Mathur and Abby McCloskey, Fostering Upward Economic Mobility in the Unites States (AEI, March 2014), www.aei.org/papers/economics/fostering-upward-economic-mobility-in-the-united-states/.
95. Isabel Sawhill and Quentin Karpilow, A No-Cost Proposal to Reduce Poverty and Inequality (Brookings Institution, January 2014), www.brookings.edu/~/media/research/files/papers/2014/01/09%20no%20cost%20proposal%20to%20reduce%20poverty%20inequality%20sawhill/no%20cost%20proposal%20sawhill.pdf.
96. Kearney and Levine, “Why Is the Teen Birth Rate in the United States So High and Why Does It Matter?”
97. Nan Astone, Steven Martin, and Lina Breslav, Innovations in NYC Health and Human Services Policy: Teen Pregnancy Prevention (Urban Institute, February 2014), www.urban.org/UploadedPDF/413058-nyc-teen-pregnancy-prevention.pdf.
98. Melissa S. Kearney and Phillip B. Levine, “Media Influences on Social Outcomes: The Impact of MTV’s 16 and Pregnant on Teen Childbearing” (working paper, National Bureau of Economic Research, January 2014).
99. Mathur and McCloskey, Fostering Upward Economic Mobility in the United States.
100. Reeves and Venator, Gender Gaps in Relative Mobility.
101. David J. Deming et al., “School Choice, School Quality, and Postsecondary Attainment” (working paper, National Bureau of Economic Research, September 2011).
102. Thomas Dee, “Conditional Cash Penalties in Education: Evidence from the Learnfare Experiment,” Economics of Education Review 30, no. 5 (October 2011): 924-37.
103. For example, see Albert Wat, Dollars and Sense: A Review of Economic Analyses of Pre-K (Pew Charitable Trusts, May 2007), www.pewstates.org/uploadedFiles/PCS_Assets/2007/PEW_PkN_DollarsandSense_May2007.pdf.
104. Katherine A. Magnuson, Christopher J. Ruhm, and Jane Waldfogel, “Does Prekindergarten Improve School Preparation and Performance?” (working paper, National Bureau of Economic Research, 2004).
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