Monday, January 23, 2006

Dr. Jones: Poverty programs don't impact poverty (apparently)

I'm in an NBER abstract mood today: Hoynes, Page and Stevens find that when the labor market is good, poverty falls (natch), but when welfare programs gets stingier, poverty doesn't rise (or fall, apparently).

On the first link (jobs and poverty), it's hard to separate cause and effect, so I'll leave that for another day--but I'll just note in passing that it implies that if markets are allowed to work better, that may help reduce the poverty and hopelessness that we've seen in the Paris banlieus (Note to France: a $10 an hour minimum wage is a great way to make sure that millions of young people are out of the workforce, with lots of free time on their hands!).

On the second link--I just never get tired of noticing the dog that did not bark: The riots that didn't happen after Clinton ended welfare as we know it--the crime that didn't spike up when the welfare checks ran out, the babies that didn't starve to death when mommy had to go to work and couldn't get decent day care. I learned a lot about the mislaid pessimism of cultural conservatives (who really thought that you "can't change the culture of poverty") and the mislaid fear of the left (who thought the poor really would rio--er, rise up against their oppressors).

Turns out, if you cut the checks off, most folks get a job, and most of the rest nag their family for a little more cash. Markets--together with civil society--found a way out of the end of welfare.

Here endeth the lesson.

Posted by Garett Jones to Right Economy at 11/12/2005 05:24:00 PM


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