[homeles_ot-l] 1) What Happens When the Poor Receive a Stipend? 2) What Causes Poverty in the First Place?

[Linda Lalonde]

Hi folks,



The article below demonstrates the positive effects of putting $$ into the hands of poor families. I found the rejection by the authors of the study that providing community services, with the same dollar value as the direct grants, was influential in the turnaround very odd. In addition to it showing a narrowness on their part that makes me wonder about the true 'scientific method' of their study, it defies reason that outside factors, whatever they may be, didn't influence the children. The results from the Manitoba Mincome experiment in the '70's also that giving poor families actual money changed lives. Wonder how long until this filters through the minds of the decision makers. Maybe it's time for some new decision makers!!

Another interesting article is at http://www.theatlanticcities.com/jobs-and-economy/2014/01/americans-are-deeply-divided-over-what-causes-poverty-first-place/8186/. It looks at the opinions of the rich and not so rich about whether poverty or wealth is the fault of the individuals themselves or of their circumstances. I know you'll never guess how this turns out - you'll have to read the article. I won't give away the ending.

Linda.
 
"Pay attention to where you are going because without meaning you might get nowhere."  A. A. Milne



 
What Happens When the Poor Receive a Stipend?
By MOISES VELASQUEZ-MANOFF 
 
New York Times January 18, 2014
 
http://opinionator.blogs.nytimes.com/2014/01/18/what-happens-when-the-poor-receive-a-stipend/
 
Growing up poor has long been associated with reduced educational 
attainment and lower lifetime earnings. Some evidence also suggests a higher 
risk of depression, substance abuse and other diseases in adulthood. Even for 
those who manage to overcome humble beginnings, early-life poverty may leave a 
lasting mark, accelerating aging and increasing the risk of degenerative disease 
in adulthood.
 
Today, more than one in five American children live in poverty. How, if at 
all, to intervene is almost invariably a politically fraught question. 
Scientists interested in the link between poverty and mental health, however, 
often face a more fundamental problem: a relative dearth of experiments that 
test and compare potential interventions.
 
So when, in 1996, the Eastern Band of Cherokee Indians in North Carolina’s 
Great Smoky Mountains opened a casino, Jane Costello, an epidemiologist at Duke 
University Medical School, saw an opportunity. The tribe elected to distribute a 
proportion of the profits equally among its 8,000 members. Professor Costello 
wondered whether the extra money would change psychiatric outcomes among poor 
Cherokee families.
 
When the casino opened, Professor Costello had already been following 1,420 
rural children in the area, a quarter of whom were Cherokee, for four years. 
That gave her a solid baseline measure. Roughly one-fifth of the rural 
non-Indians in her study lived in poverty, compared with more than half of the 
Cherokee. By 2001, when casino profits amounted to $6,000 per person yearly, the 
number of Cherokee living below the poverty line had declined by half.
 
The poorest children tended to have the greatest risk of psychiatric 
disorders, including emotional and behavioral problems. But just four years 
after the supplements began, Professor Costello observed marked improvements 
among those who moved out of poverty. The frequency of behavioral problems 
declined by 40 percent, nearly reaching the risk of children who had never been 
poor. Already well-off Cherokee children, on the other hand, showed no 
improvement. The supplements seemed to benefit the poorest children most 
dramatically.
 
When Professor Costello published her first study, in 2003, the field of 
mental health remained on the fence over whether poverty caused psychiatric 
problems, or psychiatric problems led to poverty. So she was surprised by the 
results. Even she hadn’t expected the cash to make much difference. “The 
expectation is that social interventions have relatively small effects,” she 
told me. “This one had quite large effects.”
 
She and her colleagues kept following the children. Minor crimes committed 
by Cherokee youth declined. On-time high school graduation rates improved. And 
by 2006, when the supplements had grown to about $9,000 yearly per member, 
Professor Costello could make another observation: The earlier the supplements 
arrived in a child’s life, the better that child’s mental health in early 
adulthood.
 
She’d started her study with three cohorts, ages 9, 11 and 13. When she 
caught up with them as 19- and 21-year-olds living on their own, she found that 
those who were youngest when the supplements began had benefited most. They were 
roughly one-third less likely to develop substance abuse and psychiatric 
problems in adulthood, compared with the oldest group of Cherokee children and 
with neighboring rural whites of the same age.
 
Cherokee children in the older cohorts, who were already 14 or 16 when the 
supplements began, on the other hand, didn’t show any improvements relative to 
rural whites. The extra cash evidently came too late to alter these older 
teenagers’ already-established trajectories.
 
What precisely did the income change? Ongoing interviews with both parents 
and children suggested one variable in particular. The money, which amounted to 
between one-third and one-quarter of poor families’ income at one point, seemed 
to improve parenting quality.
 
Vickie L. Bradley, a tribe member and tribal health official, recalls the 
transition. Before the casino opened and supplements began, employment was often 
sporadic. Many Cherokee worked “hard and long” during the summer, she told me, 
and then hunkered down when jobs disappeared in the winter. The supplements 
eased the strain of that feast-or-famine existence, she said. Some used the 
money to pay a few months’ worth of bills in advance. Others bought their 
children clothes for school, or even Christmas presents. Mostly, though, the 
energy once spent fretting over such things was freed up. That “helps parents be 
better parents,” she said.
 
A parallel study at the University of North Carolina at Chapel Hill also 
highlights the insidious effect of poverty on parenting. The Family Life 
Project, now in its 11th year, has followed nearly 1,300 mostly poor rural 
children in North Carolina and Pennsylvania from birth. Scientists quantify 
maternal education, income and neighborhood safety, among other factors. The 
stressors work cumulatively, they’ve found. The more they bear down as a whole, 
the more parental nurturing and support, as measured by observers, 
declines.
 
By age 3, measures of vocabulary, working memory and executive function 
show an inverse relationship with the stressors experienced by parents.
 
These skills are thought important for success and well-being in life. 
Maternal warmth can seemingly protect children from environmental stresses, 
however; at least in these communities, parenting quality seems to matter more 
to a child than material circumstances. On the other hand, few parents managed 
high levels of nurturing while also experiencing great strain. All of which 
highlights an emerging theme in this science: Early-life poverty may harm, in 
part, by warping and eroding the bonds between children and caregivers that are 
important for healthy development.
 
Evidence is accumulating that these stressful early-life experiences affect 
brain development. In one recent study, scientists at the Washington University 
School of Medicine in St. Louis followed 145 preschoolers between 3 and 6 years 
of age for up to 10 years, documenting stressful events — including deaths in 
the family, fighting and frequent moves — as they occurred. When they took 
magnetic resonance imaging scans of subjects’ brains in adolescence, they 
observed differences that correlated with the sum of stressful events.
 
Early-life stress and poverty correlated with a shrunken hippocampus and 
amygdala, brain regions important for memory and emotional well-being, 
respectively. Again, parental nurturing seemed to protect children somewhat. 
When it came to hippocampal volume in particular, parental warmth mattered more 
than material poverty.
 
The prospective nature of both studies makes them particularly compelling. 
But as always with observational studies, we can’t assume causality. Maybe the 
children’s pre-existing problems are stressing the parents. Or perhaps less 
nurturing parents are first depressed, and that depression stems from their 
genes. That same genetic inheritance then manifests as altered neural 
architecture in their children.
 
Numerous animal studies, of course, show that early life stress can have 
lifelong consequences, and that maternal nurturing can prevent them. Studies on 
rats, for example, demonstrate that even when pups are periodically stressed, 
ample maternal grooming prevents unhealthy rewiring of their nervous systems, 
favorably sculpting the developing brain and making the pups resilient to stress 
even in adulthood.
 
Yet in observational human studies, it’s difficult to rule out the 
possibility that the unwell become poor, or that some primary deficiency 
stresses, impoverishes and sickens. This very uncertainty is one reason, in 
fact, that Professor Costello’s findings are so intriguing, however modest her 
study size. A naturally occurring intervention ameliorated psychiatric outcomes. 
A cash infusion in childhood seemed to lower the risk of problems in adulthood. 
That suggests that poverty makes people unwell, and that meaningful intervention 
is relatively simple.
 
Bearing that in mind, Randall Akee, an economist at the University of 
California, Los Angeles, and a collaborator of Professor Costello’s, argues that 
the supplements actually save money in the long run. He calculates that 5 to 10 
years after age 19, the savings incurred by the Cherokee income supplements 
surpass the initial costs — the payments to parents while the children were 
minors. That’s a conservative estimate, he says, based on reduced criminality, a 
reduced need for psychiatric care and savings gained from not repeating grades. 
(The full analysis is not yet published.)
 
But contrary to the prevailing emphasis on interventions in infancy, 
Professor Akee’s analysis suggests that even help that comes later — at age 12, 
in this case — can pay for itself by early adulthood. “The benefits more than 
outweigh the costs,” Emilia Simeonova, a Johns Hopkins Carey Business School 
economist and one of Professor Akee’s co-authors, told me.
 
Not all changes in the Cherokee’s “natural experiment” were benign, 
however. For reasons neither Professor Costello nor Professor Akee can explain, 
children who were the poorest when the supplements began also gained the most 
weight.
 
Another analysis, meanwhile, found that more accidental deaths occurred 
during those months, once or twice a year, when the tribe disbursed supplements. 
The authors attributed that, in part, to increased drinking, as well as to 
buying cars and traveling more.
 
Then there’s the broader context of gaming, an often contentious issue 
around the country. Opponents often cite the potential for increases in crime, 
problem gambling and bankruptcies. And some early studies suggest these concerns 
may have merit.
 
But Douglas Walker, an economist at the College of Charleston who has done 
some consulting for pro-gaming organizations, says many of the studies on gaming 
have methodological problems. Increased criminal behavior may simply be a 
function of more visitors to the casino area, he says. If the population 
increases periodically, it’s natural to expect crime to rise proportionally. 
“The economic and social impacts of casinos are not as clear, not as obvious as 
they seem,” he said.
 
So Professor Costello’s findings are not necessarily a sweeping endorsement 
of Native American gaming, and casinos generally. Rather, they suggest that a 
little extra money may confer long-lasting benefits on poor children. And in 
that respect, the Cherokee experience is unique in several important ways.
 
First, this was not a top-down intervention. The income supplements came 
from a business owned by the beneficiaries. The tribe decided how to help 
itself. Moreover, the supplements weren’t enough for members to stop working 
entirely, but they were unconditional. Both attributes may avoid perverse 
incentives not to work.
 
Also, fluctuations in the casino business aside, the supplements would 
continue indefinitely. That “ad infinitum” quality may both change how the money 
is spent and also protect against the corrosive psychological effects of chronic 
uncertainty.
 
And maybe most important, about half the casino profits went to 
infrastructure and social services, including free addiction counseling and 
improved health care. Ann Bullock, a doctor and medical consultant to the 
Cherokee tribal government, argues that these factors together — which she calls 
the exercising of “collective efficacy” — also may have contributed to the 
improved outcomes. She describes a “sea change” in the collective mood when the 
tribe began to fund its own projects. A group that was historically 
disenfranchised began making decisions about its own fate.
 
“You feel controlled by the world when you’re poor,” she said. “That was 
simply no longer the case.”
 
Professor Costello and Professor Akee don’t entirely agree. They think cold 
hard cash made the real difference. For one thing, Professor Akee says, outcomes 
started improving as soon as the supplements began, before many of the 
communitywide services went into effect.
 
If that’s the primary takeaway, then we have some thinking to do. Some 
people feel that “if you’re poor, it’s because you deserve it,” Professor 
Costello said. “If you’re sick, it’s because you deserve it,” she said.
 
But if giving poor families with children a little extra cash not only 
helps them, but also saves society money in the long run, then, says Professor 
Costello, withholding the help is something other than rational.
 
“You’re not doing it because it pains you to do it,” she said. “That’s a 
very valuable lesson for society to learn.”
 
Moises Velasquez-Manoff is a science writer and the author of “An Epidemic 
of Absence.”
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