Building Better Social Programs: How Evidence Is Transforming Public Policy 0190945575, 9780190945572

Table of contents :
cover
Building Better Social Programs
Copyright
Contents
Introduction
PART I
1 The Welfare State on Autopilot
2 Wednesday’s Children
3 Poor Policy
4 Starving the Beast
PART II
5 Nurse-​Family Partnership
6 The Abecedarian Project
7 Year Up
9 Abdul Latif Jameel Poverty Action Lab
8 Arnold Ventures
PART III
10 American Development Accounts
11 Up$tart
12 A Refundable Volunteer Tax Credit
13 In$ync
14 Silver Bullets and Other Obstacles
15 Innovation
INDEX

Citation preview

Building Better Social Programs

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Building Better Social Programs How Evidence Is Transforming Public Policy

David Stoesz, PhD, MSW

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1 Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries. Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America. © David Stoesz 2020 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above. You must not circulate this work in any other form and you must impose this same condition on any acquirer. Library of Congress Cataloging-​in-​Publication Data Names: Stoesz, David, author. Title: Building better social programs : how evidence is transforming public policy /​David Stoesz. Description: New York : Oxford University Press, 2019. | Includes bibliographical references and index. | Identifiers: LCCN 2019032562 (print) | LCCN 2019032563 (ebook) | ISBN 9780190945572 (hardback) | ISBN 9780190945596 (epub) | ISBN 9780190945589 (updf) | ISBN 9780190945602 (online) Subjects: LCSH: Social service—United States. | Social work administration—United States. | United States—Social policy. Classification: LCC HV91 .S686 2019 (print) | LCC HV91 (ebook) | DDC 361.6/​10973—dc23 LC record available at https://​lccn.loc.gov/​2019032562 LC ebook record available at https://​lccn.loc.gov/​2019032563 9 8 7 6 5 4 3 2 1 Printed by Integrated Books International, United States of America

No one ever made a decision because of a number. They need a story. Daniel Kahneman

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CONTENTS

Introduction  1 PART I. Prelude 1. The Welfare State on Autopilot   17 2. Wednesday’s Children   35 3. Poor Policy   58 4. Starving the Beast   80 PART II. The Movement 5. Nurse-​Family Partnership  

107

6. The Abecedarian Project   124 7. Year Up   139 8. Arnold Ventures   159 9. Abdul Latif Jameel Poverty Action Lab   175 PART III. Equitable America 10. American Development Accounts   199 11. Up$tart  

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12. A Refundable Volunteer Tax Credit   235 13. In$ync  

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14. Silver Bullets and Other Obstacles   271 15. Innovation   Index  311

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Introduction

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n September 25, 2017, an 11-​year old boy we’ll call Manuel was taken to the emergency room of the hospital in Farmington, New Mexico, a small city serving the Four Corners region. In addition to a patch of hair ripped from his head, Manuel had bruises covering much of his body, ligature marks on his neck, and black eyes so swollen that he couldn’t wear his eyeglasses properly. Initially, Manuel explained that the injuries were from tripping while practicing soccer, but, while his foster mother and a social worker stood by, Manuel whispered to a hospital security guard, “Help me.” Hospital staff promptly called the police. With his sister, Manuel had been placed six months earlier in a home licensed to provide Treatment Foster Care (TFC), which provided more intensive care for children with behavioral problems. A subsequent investigation by a detective from the Farmington Police Department determined that the boy had been “starved, forced to eat his own vomit, and made to exercise till his body gave out.” The detective concluded that Manuel’s injuries were not due to a soccer mishap but a vicious beating by the foster mother using a metal rod from a bedframe after the boy missed a math problem. A teacher later confirmed that Manuel’s sister also feared retaliation from the foster mother. Subsequently, the foster mother was charged with four felonies: three for child abuse and another for bribing a witness. Manuel’s case highlighted problems New Mexico encountered with a 5-​year 44% increase in children placed in foster care after the state’s Children, Youth, and Families Department (CYFD) had contracted out services to 11 private companies, costing the state $25,000 per child. While the companies were required to adhere to rigorous standards, including an

Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

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independent evaluation by SAFE (Structured Analysis Family Evaluation), CYFD’s process often omitted crucial information. In Manuel’s case, crucial information missed included repeated allegations of family violence involving his foster parents.1 The irony of Manuel’s case was that TFC had evolved decades before as an evidence-​based intervention, ensuring better care at less cost than traditional foster care. Pioneered in Oregon, TFC was one of a handful of interventions evaluated using randomized controlled trials (RCTs) in which youth were assigned either to a family trained in behavioral management while being closely supervised, or to congregate foster care. In 1991, researchers had conducted an RCT involving foster youth engaged in delinquent behavior to determine if TFC yielded better outcomes than congregate care. The TFC study found that youth in TFC subsequently reported half as many delinquent infractions, and that TFC operated about 60% of the cost of congregate care.2 As the evidence-​ based program movement gained momentum and state officials had to address fiscal austerity, interventions like TFC that promised superior outcomes at reduced costs became attractive. By 2017, the Washington State Institute for Public Policy, which maintains a comprehensive inventory of evidence-​based interventions, noted that the costs per participant in multidimensional TFC, $10,766, were eclipsed by benefits, $19,951.3 But, as Manuel’s experience demonstrated, external factors subverted optimal outcomes:  at significant cost to CYFD, foster children under the care of the State of New Mexico were seriously harmed. Explanations for government failure often feature the usual suspects: lag in state appropriations to address increasing demand for care, privatization of services as state government attempts to become more efficient, and social stratification of care that leaves poorer families dependent on an inferior public sector. Clearly, these factors were evident in the experience of Manuel and his sister; furthermore, the intransigence of the professional community should be included, since child welfare professionals represent state authority in social care. When an underresourced state agency entrusts care for vulnerable citizens to vendors that it is unable to adequately supervise, the only measure of accountability rests with professional staff. It is paradoxical that professionals do not exploit optimal interventions, insofar as the professional monopoly granted by state government through licensing laws presumes the professional community will make public well-​ being a paramount concern. In the United States, professions are independent of government, as are the universities that manage professional training programs. Thus, as autonomous entities, professions are free to

[ 2 ] Introduction

accredit their own training programs, establish curricula, hire and promote faculty, credential graduates, and provide postgraduate courses to ensure that graduates periodically upgrade their knowledge and skills. But what happens when professions, instead of striving to optimize interventions affecting the public, opt for a retrograde status quo? This question is all the more compelling with the advent of evidence-​ based policy. During the latter decades of the 20th century, researchers representing the applied social sciences began mounting RCTs in order to determine interventions that delivered constructive, efficient outcomes. The Coalition for Evidence-​based Policy, established in 2001, evaluated the quality of interventions in several fields, and it was incorporated in the Laura and John Arnold Foundation (now Arnold Ventures) in 2015. Subsequently, President Obama signed legislation establishing the Commission on Evidence-​based Policymaking in 2016. Concurrently, the Evidence-​ based Policy Collaborative, representing prominent foundations and think tanks—​ the Urban Institute, the American Enterprise Institute, the Pew and MacArthur Foundations, the Brookings Institution—​was organized to encourage rigorous research at all levels of government.4 By 2020, a half-​century after field experiments demonstrated efficacy in pharmacy, medicine, and public health, evidence-​based policy has reached a crescendo, extending across federal and state agencies. “Today hundreds of randomized evaluations are being undertaken by all sorts of different organizations and on virtually every subject of importance to policy, including education, health, governance, the environment, and empowerment,” observed authors of a primer on RCTs.5 Given the benefits of evidence-​based policy, to say nothing of the movement’s trajectory, child welfare’s remove is as inexplicable as its consequences would be perverse. Afflicted by suboptimal performance despite a state-​granted monopoly to human service professions and affiliated university training programs, often subsidized by the federal government via Pell Grants and student loans as well as grants to professional training programs, American child welfare became a backwater where maltreated children from troubled families were subjected to intuitive interventions, provided by professionals not only ignorant of state-​of-​the-​art research but also incapable of mounting field experiments, and the harm inflicted was conveniently obscured by client confidentiality protocols and government failure to report administrative data. In the case involving Manuel and his sister, TFC was compromised by state failure to supervise private contractors as well as by professional failure to insist on the best interventions for defenseless children.

Introduction 

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In this respect, social work, a profession that pretends to promote child welfare, represents a disturbing illustration of bypassing contemporary standards of research. Specifically, in 2013 and 2014 the National Child Welfare Workforce Institute (NCWWI) was established by the U.S. Children’s Bureau and select university training programs, and it distributed $20.5  million over 5  years for social work programs accredited by the Council of Social Work Education (CSWE). While the propriety of restricting funding to CSWE training programs is open to question, since the Social Security Act does not authorize designating funds to specific professions, social work’s skepticism about RCTs is not in doubt, as noted by three leaders in social work overseeing child welfare training: “Not only would conducting an RCT of NCWWI programs in their early stages of development and implementation be wholly inappropriate and premature, but it would be exceedingly costly to execute on a national scale.” “The reality is that even the most elegant RCTs are extremely difficult to implement in child welfare settings, often for logistical and ethical reasons.” “Perhaps ideal, RCT studies in any discipline (including medicine) are rare and difficult to design and implement . . . the ethics of research and practice in the social sciences makes the design and implementation of RCT studies quite questionable, especially in cases of child abuse and neglect.”6 Yet, as Eileen Gambrill argued, denial of rigorous research in a profession committed to social benefit leaves propaganda as a convenient default, foisting ersatz nostrums on a susceptible public.7 Paradoxically, at the very time RCTs were gaining credibility for demonstrating positive, cost-​effective outcomes in any number of fields, among them TFC in child welfare, social work, a dominant presence in the field, remained obdurate in its resistance.8 Arguably, among the casualties of child welfare’s abnegation of RCTs would be Manuel and his sister. The purpose of Building Better Social Programs is to explore the merits of evidence-​based policy and the challenges facing the movement, and to place evidence-​based policy within the larger context of public policy. An apercu of what follows is divided into three parts. Part I, “Prelude,” explores national variations in social infrastructure aimed at protection of citizens against an array of risks. The Human Development Index, the Better Life Index, and the Human Capital Index suggest that some nations, such as the United States, underperform given their wealth, while better outcomes are achieved by less affluent countries. Chapter  1, “The Welfare State on Autopilot,” examines the emergence of the American welfare state, an outgrowth of the Progressive movement. A  progressive luminary, Abraham Flexner, institutionalized

[ 4 ] Introduction

science in American medicine, elevating physicians to full-​ status professionals. Through the Social Security Act of 1935, federal social programs complemented gender roles of the era, supporting primarily male breadwinners through social insurance, leaving inferior public assistance for nonworkers, especially the disabled and mothers. Critically, federal policy accommodated state preferences, attenuating minority rights. During the 1960s, protracted poverty prompted President Johnson’s War on Poverty; however, the rapid expansion of public assistance programs sparked criticism from conservatives. Complementing bureaucratic expansion, management information systems evolved to account for expenditures, although outcomes were ignored. Chapter  2, “Wednesday’s Children,” explores the limits of empiricism in public policy, as illustrated by child welfare. Over a half-​century, a nonsystem of programming emerged, an ersatz collection of uncoordinated services that, however well intended, often harmed children and families. Child welfare, presumed to be an entitlement, abjured evidenced-​ based policy, opting for intuitive understanding of troubled families. By the 20th century’s end, however, research on the benefits of investments in children, especially the minority poor, changed the narrative by focusing on child development. Chapter 3, “Poor Policy,” reviews the welfare reform of 1996, which was justified on the basis of outcome research regarding welfare families and work as well as training programs. As antipoverty research gained credibility, public policy was crafted, indeed choreographed, by prominent politicians, not least of which was Governor, then President, Bill Clinton. Carrying a conservative imprint, the 1996 welfare reform legislation provided employment opportunity for many poor households but left a subset in dire poverty. The impressive volume of research undergirding welfare reform was conducted primarily by private research organizations. Chapter  4, “Starving the Beast,” recounts conservative efforts to contain entitlement spending by constraining taxes, preempting expansion of social programs. Conceived in California via Proposition 13, tax policy as a means to control social spending was highlighted by Grover Norquist of Americans for Tax Reform, ultimately leading congressional Republicans to sign his “no new tax” pledge. In the absence of tax increases, the ballooning federal debt required interest payments that the federal government was obliged to pay to retain the full faith and credit of the U.S. Government. Reductions in tax revenues paralleled rising economic inequality, with wealth gravitating toward the super-​rich and fueling the expansion of foundations and think tanks, which elected to make evidence-​based policy a priority.

Introduction 

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Part II, “The Movement,” reviews seminal evidence-​based programs, which have been highly rated by the Laura and John Arnold Foundation. Following Joseph Schumpeter’s theory of “creative destruction,” evidence-​ based policy represents a disruptive innovation in social policy. The narrative of five organizations central to the evidence-​based movement is amplified by interviews with several luminaries. Chapter 5, “Nurse-​Family Partnership,” describes a program established by David Olds and shows that nurses visiting first-​time mothers generated long-​term individual and social benefits in Elmira, Memphis, and Denver. By 2017, the federal Maternal, Infant, and Early Childhood Home Visiting Program approached one million home visits, delivering positive outcomes for low-​income mothers and their children. Chapter  6, “The Abecedarian Project,” recounts Craig Ramey’s experiment with intensive early childhood education. Begun in North Carolina, Abecedarian was subsequently replicated in eight cities, providing impetus for reevaluating Head Start as well as propelling the early childhood education movement. Chapter 7 covers Year Up, a program that provides training in information technology and financial services to give 18-​to 24-​year-​olds an advantage in employment. By its third year, Year Up graduates attained incomes $7,000 more than those of the control group. Most of the cost of Year Up is borne by employers, with community colleges providing credit to encourage graduates to continue their education. Chapter 8, “Arnold Ventures,” recounts how the Coalition of Evidence-​ based Policy was absorbed by the Laura and John Arnold Foundation. Along with other foundations, such as Pew/​MacArthur Results First and the Washington State Institute for Public Policy, Arnold Ventures expanded the evidence-​based policy movement, culminating with the Evidence-​based Policymaking Act of 2018. Chapter 9 describes the Abdul Latif Jameel Poverty Action Lab (J-​PAL) at MIT, which was initially an initiative for mounting RCTs in developing countries but which shifted its focus to North America. Subsequently, J-​ PAL has assembled an impressive stable of researchers in the United States and abroad. The J-​PAL/​MIT MicroMasters program attracts students from around the planet to hone rigorous research skills at a world-​class research institution. Part III, “Equitable America,” presumes that evidence-​based programs are unlikely to reach scale unless they are embedded in an agenda benefiting blue-​collar households and communities. The 2016 presidential election was the culmination of middle-​American resentment toward elitist social engineering, personified by Hillary Clinton. While liberals are inclined to

[ 6 ] Introduction

dismiss Trump’s base as representing ethnonationalist populism, it’s more likely that the president’s postelection campaign rallies reprise a collective middle finger from the denizens of flyover country flipped to their compatriots from the Acela corridor spanning the East Coast and the Left Coast. Deaf to the saner sensibilities of middle America, a liberal technocracy, which has promoted evidence-​based policy, is apt to fuel continual resentment in the absence of efforts to ameliorate stagnant opportunity for working-​class households. Chapter  10 describes Up$tart, which bundles applications for social benefits for low-​income college students, stabilizing family finances, increasing likelihood of graduating, and accelerating upward mobility. Complementing efforts by Single Stop and Benefit Data Trust, Up$tart initially integrated the Free Application for Federal Student Aid, the Earned Income Tax Credit, and Supplemental Nutrition Assistance for students eligible for Pell Grants, and subsequently expanded to include the Child Tax Credit, Supplemental Security Income, and Veterans Benefits. Chapter 11 describes American Development Accounts (ADAs), an expansive policy to increase the wealth of blue-​collar workers. Modeled after default Individual Retirement Accounts instituted in Illinois, California, and Oregon, ADAs would automatically enroll young workers in savings accounts, matched according to wages, in order to build wealth. Thus, ADAs complement income strategies to remedy economic inequality by focusing on wealth. Chapter 12, “A Refundable Volunteer Tax Credit,” discusses a tax credit that addresses rising inequality while building on the Earned Income Tax Credit and the Child Tax Credit. The Refundable Volunteer Tax Credit would ensure a minimum wage for workers serving in local government and nonprofit organizations, including volunteer fire fighters, librarians, coaches for athletic teams, and band conductors, among others. Such a strategy would revitalize urban, suburban, and rural communities struggling to maintain a depleted infrastructure. Chapter  13 describes In$ync, which proposes collaborations between colleges and employers to prepare young adults for high-​tech jobs. Replacing the traditional vocational education model with an information age high-​ tech model addresses unmet employment needs while avoiding the tuition debt and low-​wage problem besetting undergraduate education. Chapter  14, “Silver Bullets and Other Obstacles,” critiques proposals from the progressive left, including Universal Basic Income, free public college, and Medicare for All. Aside from being ruinously expensive, such proposals are likely to alienate blue-​collar voters committed to the work

Introduction 

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ethic. Attending to the working-​class in flyover country is essential for expansion of the evidence-​based movement. Chapter  15, “Innovation,” reviews the resistance to evidence-​ based policy vis-​à-​vis behavioral economics as well as the position of a typical agency executive director. Four recommendations are proposed to expand the evidence-​ based movement:  deploying and testing programs in flyover country, increasing the role of RCTs in federal tiered funding, replicating the J-​PAL/​MIT MicroMasters for domestic policy, and awarding a “randomista” prize for outstanding contributions to rigorous research in social policy. Several acknowledgments are in order, especially authorities on evidence-​ based policy who consented to be interviewed about their work: Jon Baron of Arnold Ventures Mary Ann Bates of J-​PAL North America David Callahan of Inside Philanthropy Sara Dubé of Pew/​MacArthur Results First John Floretta of J-​PAL, Communications and Policy Peter Germanis of the Department of Health and Human Services Ron Haskins of the Brookings Institution and Co-​ Chair of the Presidential Commission on Evidence-​based Policymaking Stephanie Lee of the Washington State Institute for Public Policy Jim Manzi of the Manhattan Institute and The Foundry David Olds of the University of Colorado, Denver Craig Ramey of Virginia Technical University Bruce Thyer of Florida State University Garrett Warfield of Year Up With respect to publishing Building Better Social Programs, Dana Bliss, editor at Oxford University Press (OUP), has shepherded several projects in recent years, most recently The Dynamic Welfare State (2017) and its sequel The Investment State (2018), which included a segment on evidence-​based policy. OUP found anonymous reviewers willing to examine early drafts of the prospectus; I thank them for their comments. Among my colleagues, I’ve appreciated the support of Howard Karger, William Epstein, Catherine Born, and Michael McMullan, social policy analysts capable of “thinking outside the box.” An earlier draft of “American Development Accounts” (Chapter  10 herein) was posted by the Progressive Policy Institute, for which I thank Will Marshall and Anne Kim. Funding for this project was provided by the Smith Richardson Foundation.

[ 8 ] Introduction

I owe a special debt to my collaborators at Up$tart, the company featured in Chapter  11. Ona Porter, long an activist in New Mexico, introduced me to several major players and institutions that proved indispensable for the start-​up. Richard Bailey, Jr., the President of Northern New Mexico College, has been an inspiration as an academic administrator, not only providing leadership to a college on the brink of closure, but also seeing fresh opportunities for a largely Hispanic and Native American student body. Tom Chepucavage, a software engineer with an MBA, provided essential instruction in the world of start-​ups, facilitated any number of meetings with venture capital firms, and helped troubleshoot software glitches. Tracy Clark made a quick transition from managing fossil fuel exploration in the Texas “oil patch” to higher education in New Mexico. Finally, gracias a Fernanda Priego, graphic artist extraordinaire, who has visualized Up$tart from inception. Launching a start-​up is no easy task, but no one could have finer colleagues than those founding Up$tart. Given government’s maintenance of uncoordinated “silo” programs and the nonprofit sector’s glacial movement on issues of poignant urgency, the plight of low-​income college students would have simply been protracted in the absence of a savvier strategy, such as Up$tart. Finally, any exercise in policy projection, as in Part III, invites criticism. A  striking paradox of the evidence-​based movement has been that, although outcome data evaluating program performance are retrospective, at some point, innovators took it upon themselves to chart a new path in social programming, assuming the risk of investing time and resources in projects that might well have failed. In that vein, the proposals advanced benefit working-​class Americans, an essential constituency if the evidence-​ based movement is to expand. Comments toward advancing options in social policy are invited: [email protected] Any errors in what follows are mine alone. David Stoesz Santa Fe

NOTES 1. Ed Williams, “Missteps, Gaps Found in N.M. Treatment Foster Care System,” Santa Fe New Mexican, May 6, 2018, p. 1. 2. Patrician Chamberlain and Kevin Moore, “Models of Community Treatment for Serious Juvenile Offenders,” in Jonathan Crane, ed., Social Programs That Work (New York: Russell Sage Foundation, 1998), pp. 258–​76.

Introduction 

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3. http://​www.wsipp.wa.gov/​BenefitCost/​Program/​20 4. https://​www.evidencecollaborative.org/​about-​collaborative 5. Rachel Glennerster and Kudai Takavarasha, Running Randomized Evaluations: A Practical Guide (Princeton, NJ: Princeton University Press, 2013), p. vii. 6. David Stoesz, “The Child Welfare Cartel, Redux,” Research on Social Work Practice, 2016, vol. 26, no. 5, 519–​24. 7. Eileen Gambrill, “Evidence-​Informed Practice: Antidote to Propaganda in the Helping Professions?” Research on Social Work Practrice, 2010, vol. 20, no. 3, 302–​20. 8. In most professions, graduate study requires a research thesis, a demonstration that the student commands the essential knowledge and methods to be an independent practitioner capable of contributing to the profession, but social work’s accrediting authority, the Council on Social Work Education (CSWE), fails to require graduate programs to make the research thesis mandatory or even as an elective for research-​capable graduate students. Since the creation of CSWE over a half-​century ago, the result has been generations of Masters of Social Work graduates who are ignorant of research, if not averse to empirical methods.

[ 10 ] Introduction

PART I

Prelude With the rise of industrial economies, generating unprecedented surpluses for nations to invest in their populations, conceptual schemes evolved to explain and justify how the investments should best be made, providing the rationale for a vast array of social programs. Early in the last century, advocates of national progress—​organized under different causes, such as Fabian Socialism in the United Kingdom and Progressivism in the United States—​used worker rights, social justice, and economic progress as a means to advance the notion that the national government should protect citizens from risks imposed by an economy based on heavy manufacturing. Expanding Bismarck’s legacy of insurance for German workers, leaders configured and promoted the idea of the welfare state, through which the national government ensured goods and services as a right of citizenship, establishing entitlements for broad swaths of the population. As nations adopted quite different policies to define their welfare states, Gosta Esping-​Anderson differentiated the “social democracies” of Scandinavia, providing universal programs to citizens, from “corporate states” of southern Europe, where sectarian values shaped government policy, and “liberal states” of the United Kingdom and the United States, where public assistance was established in a misalliance with social insurance.1 Yet, by century’s end, this formulation was found lacking; fundamentally Eurocentric, it excluded the burgeoning economies of Asia. Even the welfare states of the West were confronted with hostility among their citizens, who often marched under banners unfurled by an ethnonationalist right. On the defensive, liberals hewed to historic commitments, even as their credibility eroded. Thus, the seventy-​fifth anniversary issue of The Economist called for a reevaluation of liberal endorsement of the welfare state. “Liberal reformers have become liberal insiders, satisfied

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beneficiaries of the world they have helped to build,” the editors intoned. “Perhaps the best-​founded part of today’s reaction against liberalism is the outrage people feel when its nostrums are imposed on them with condescending promises that they will be better for it.”2 If liberals doubted the depth of disenchantment with the social programs of their welfare states, Brexit and the election of Donald Trump as U.S. President would disabuse many of that conceit. But, a parallel problem in assessing the adequacy of social provision also became evident: the reliance on economic data alone to portray well-​being. This myopia coincided with the emergence of international organizations capable of aggregating data from various institutions deemed essential for national prosperity. Accordingly, the United Nations crafted the Human Development Index (HDI), first presented in 1990, complementing per capita gross national income with two important factors:  education and longevity. In so doing, the HDI demonstrated that some poorer countries fared better than their wealthier counterparts, but also that national prosperity changed significantly over time, as evident in China’s rise and sub-​Saharan Africa’s fall. For 2018, the top three countries ranked by the HDI were Norway, Switzerland, and Australia, while the United States and United Kingdom placed thirteenth and fourteenth, respectively.3 Subsequently, the Organisation for Economic Co-​ operation and Development presented a Better Life Index (BLI), which has 11 factors: in addition to income, health, and education, it includes housing, jobs, community, environment, civic engagement, life satisfaction, safety, and work–​life balance. The BLI offered a more comprehensive portrait of development, although variables for less-​developed nations were often unavailable, or, as in the case of work–​life balance, arguably irrelevant. For 2017, the top three countries of the BLI were Norway, Denmark, and Australia, while the United States registered eighth and the United Kingdom, sixteenth. Rankings of national prosperity, apparently, change according to the component variables selected.4 Most recently, the World Bank created a Human Capital Index (HCI) to chart the prospects that a “child born today can expect to attain by age 18, given the risks [of] poor health and poor education that prevail in the country where she lives.” Comprised of three variables—​survival, health, and education—​the HCI harkens back to the HDI, although the variables are more poignant in focusing on the young. The 2018 HCI ranks the top three countries as Singapore, South Korea, and Japan, leaving the United Kingdom in fifteenth place and the United States in twenty-​fourth.5 Since the HDI and BLI have been included in previous books, the HCI data dispersion warrants further examination.

[ 12 ] Prelude

Perhaps most glaring is the distance in prosperity between the First-​ World welfare states of Europe, North America, and Australia and what was once known as the Third World, states lagging in development, such as in sub-​Saharan Africa. Among the latter, retrograde technology is often offered as a culprit: without advanced technologies, developing countries are dependent on the aid of First-​World nations. In this respect, the unconditional grants of the 20th century in the form of direct government assistance have been superseded by conditional grants around specific targets, implied by the Millennium Development Goals to end poverty by 2015,6 followed by 17 Sustainable Development Goals to make the world more prosperous by 2030.7 As might be suspected, the complexity of associating development with multiple variables generates an ambiguous portrait:  while wealthier nations of the West prosper (North America, Europe), the “rise of the rest” (East and South Asia) is as conspicuous as lagging prosperity in sub-​Saharan Africa.8 Since the latter decades of the 20th century, then, data have become the shorthand for the development narrative, although they are suboptimal, insofar as empirical indicators tend to obliterate texture, level subtlety, and offer false assurance of equivalence. Initially generated to describe and perfect First-​World welfare states, empirical methods, especially randomized controlled trials (RCTs), have been mounted internationally by researchers committed to advancing human well-​being. If there is a distinction worth making between RCTs in developing nations and field experiments in established welfare states, it would be that the funding and personnel implications involving the latter are that much more profound, indeed. As portraits of development have changed, so have methods been transformed. The Abdul Latif Jameel Poverty Action Lab (J-​PAL) at the Massachusetts Institute of Technology rejected the presumption that First-​ World technology—​in this case evidence-​based policy—​is poorly suited for Third-​ World conditions. Founded in 2003 to conduct RCTs in developing nations, J-​PAL subsequently flipped the narrative by announcing an initiative to conduct RCT’s in First-​World North America. Evidence-​based policy is relevant to social interventions regardless of a nation’s wealth. The United States often punches below its weight with respect to financial resources. Other nationalities fare as well as, if not far better than, Americans with regard to human capital:  Australia, Sweden, Finland, Canada, and Ireland are in the top ten, while third-​tier America keeps company with France, Serbia, Poland, and Estonia. In other words, American performance, at least with regard to its youth, is notably below par. Explanations for a substandard state of affairs can be attributed to

P r e l u de  

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the nation’s fiscal commitment to seniors over children, the erosion of unions’ protection of working-​class families, and a persistent conservative vector in the polity. Another factor is worth exploring as well: imprudent expenditures for programs that are inefficient or, worse, inflict harm on citizens, an unanticipated outcome that could be corrected by evidence-​ based policy. Can the American welfare state benefit appreciably from systematically mounting field experiments intended to make social programs more effective (delivering desirable outcomes) and efficient (becoming more cost-​effective)? Deployment of RCTs originated in healthcare after World War II. Studies to test streptomycin to treat tuberculosis and the Salk vaccine to treat polio yielded significant public health benefits. Extrapolating from the Food and Drug Administration’s mandate to require RCTs for new drugs and medical procedures, social interventions were subjected to testing through field experiments, among them Perry Preschool, the Nurse-​ Family Partnership, and the Abecedarian Project, which have become iconic. Meanwhile, RCTs informed public officials determined to reform welfare during the 1990s; under Chapter 1115 of the Social Security Act, alternatives to Aid to Families with Dependent Children could be deployed providing the demonstrations were fiscally neutral and structured as field experiments. Subsequently, welfare waiver experiments, begun during the Reagan Administration and continuing under Presidents Clinton and Bush, generated substantial data undergirding the 1996 Welfare Reform Act.9 Regardless of how encouraging the outcomes of field experiments mounted by advocates of evidence-​ based policy were, the movement encountered constraints. Foremost, proponents were soon disabused of the possibility of radical realignment of social programming. Based on lessons learned from a massive experiment on the Negative Income Tax, Nobel laureate James Heckman concluded that RCTs are logically incapable of assessing variations within study populations or extrapolating to the evolution of multiple-​stage programming, let alone generalizing to other fields of interest.10 Such limitations notwithstanding, RCTs have proliferated, sufficient to populate archives of systematic reviews, including the Campbell Collaboration, the Washington State Institute of Public Policy inventory, the Pew/​MacArthur Results First initiative, and the California Evidence-​ Based Clearinghouse for Child Welfare. RCTs have also become standard methods in American business. Jim Manzi reported that Capital One ran 60,000 tests in 2000, and that Google mounted 12,000 RCTs in 2009.11 Field experiments are routinized in order to optimize product placement, to determine consumer preference, and to evaluate customers’ experiences, a process managed subliminally through

[ 14 ] Prelude

proprietary algorithms. In a relentlessly competitive marketplace, RCTs are now ubiquitous. If RCTs are unlikely to revolutionize social programming, can they become an instrument for significant improvement through determining interventions that are effective as well as efficient? The case for incremental benefits in social policy generated by RCTs is already compelling in the public and commercial sectors. As social policy evolves from interventions premised on intuition and guesswork to those evaluated rigorously, essential stakeholders stand to benefit:  consumers who are dependent on social programs, taxpayers who are subsidizing interventions, and public officials who are pledged to promote the public interest. In this respect, evidence-​based policy may represent a decisive moment in the evolution of the American welfare state. Yet, a larger promise emerges:  RCTs can be instrumental in weeding out programs that damage citizens, replacing them with evidence-​based programs that are beneficial. Among harmful programs—​foster care, juvenile detention, inner-​city public education, and the separation of children from parents seeking asylum at the southern border—​the casualties have often been poor minorities of color. Indeed, critics from the left and right have correctly identified such damaging programs as neocolonial, benefitting professionals at the expense of the underclass. The long-​term consequences of such interventions not only compromise the prosperity of minority families and their communities, but also obligate the public to future costs for remediation. In this respect, evidence-​based policy can represent a disruptive innovation, a corrective aligned with an animating American value—​social justice—​with a distinctive American philosophy—​ pragmatism. Systematic reassessments of suspect programs via RCTs, through which innovative interventions are compared to conventional services, promise to upgrade social services. Thus, the evidence-​based policy movement, which is already producing incremental improvements in social care, can also be put to larger purpose: evolving the next generation of services constituting the American welfare state.

NOTES 1. Gosta Esping-​Anderson, The Three Worlds of Welfare Capitalism (Cambridge, UK: Polity Press, 1990). In recognition of this inadequacy, Esping-​Anderson subsequently published Why We Need a New Welfare State (New York: Oxford University Press, 2002). 2. 1948/​2018. “A Manifesto for Renewing Liberalism,” The Economist, September 15–​21,  2018.

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3. http://​hdr.undp.org/​en/​2018-​update 4. http://​www.oecdbetterlifeindex.org/​#/​11111111111 5. The Human Capital Project (Washington, DC: World Bank, 2018), p. 1. https://​ openknowledge.worldbank.org/​bitstream/​handle/​10986/​30498/​33252. pdf?sequence=4&isAllowed=y 6. http://​www.un.org/​millenniumgoals/​bkgd.shtml 7. https://​www.un.org/​sustainabledevelopment/​development-​agenda/​ 8. https://​www.washingtonpost.com/​business/​2018/​10/​11/​us-​ranks-​th-​men-​ nd-​women-​when-​it-​comes-​helping-​residents-​reach-​their-​potential/​?utm_​ term=.2b846cad3cd5 9. John Baron, “A Brief History of Evidence-​Based Policy,” in Annals of the American Association of Politics and Social Sciences, 678, July 2018. 10. James Heckman, “Randomization and Social Program Evaluation,” National Bureau of Economic Research, Working Paper 107, 1991. 11. Jim Manzi, Uncontrolled (New York: Basic Books, 2012).

[ 16 ] Prelude

CHAPTER 1

The Welfare State on Autopilot

T

he origins of the American welfare state can be traced to the Progressive Era, when disparate institutions evolved to address the dislocations attendant with industrialization, urbanization, and immigration. Fundamentally, democratic capitalism served as the political economy for the nation’s evolving social infrastructure:  markets would distribute goods, and citizens’ representatives could alter policy through legislation. Burgeoning markets accompanying the shift from agriculture to manufacturing, complemented by demographic shifts from farms and villages to cities, as well as by immigration, generated unprecedented wealth that could be put to public benefit. At the same time, wild oscillations in the economy prompted a public response in the form of federal regulations on capital and markets. The Great Depression, which disabused the most ardent defenders of localism and laissez-​faire, expanded federal authority and benefits to distressed citizens and communities, introducing the welfare state as a governmental institution. By the beginning of the 21st century, trade associations intent on privatization viewed government social programs as an opportunity for institutional expansion, which benefited their members. Thus, four sets of institutions would emerge with quite different auspices and objectives:  foundations to promote progress, federal agencies to regulate the economy, government social programs to serve the needy, and corporations profiting as intermediaries. As a result, while the welfare state is often proscribed as a governmental institution, it has evolved in alliance with foundations, regulatory agencies, and corporations, which provide essential, complementary functions. These institutional networks

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not only continue to modify the nation’s social infrastructure, but also, as would be expected in an open society, are subject to constant criticism. Each has made important contributions to understanding of public affairs and, more specifically, the emergence of evidence-​based policy.

FOUNDATIONS

A signal institution of the Progressive Era, foundations were created by “captains of industry,” were dedicated to public benefit, and were funded by unprecedented wealth generated from manufacturing, transportation, and extractive industries. The stupendous growth in manufacturing, attributed to inventions that transformed the economy after the Civil War,1 capitalized companies that commanded markets and, in so doing, larded the accounts of owners, often individuals of such spectacular wealth that the era became known as the Gilded Age. The American economy, unrestrained by government, expanded exponentially, attaining a global presence. One historian imagined, The typical Englishman woke to the ring of an Ingersoll alarm, shaved with a Gillette razor, combed his hair with Vaseline tonic, buttoned his Arrow shirt, hurried downstairs for Quaker Oats, California figs, and Maxwell House coffee, commuted in a Westinghouse tram (body by Fisher), rose to his office in an Otis elevator, and worked all day with his Waterman pen under the efficient glare of Edison light bulbs.2

Massive wealth posed an opportunity as well as a burden, prompting titans of industry to configure methods for diverting capital to public works, which, at the same time, dissuaded reformers from confiscating their riches by taxation. Hence, President Theodore Roosevelt voiced alarm about “the malefactors of great wealth.” In 1889, Andrew Carnegie published a pamphlet, “The Gospel of Wealth,” contending that, rather than consigning fortunes to heirs or the poor, the prudent course was to endow institutions. With alacrity, Carnegie diverted millions of dollars to establish what became Carnegie Mellon University and over two thousand municipal libraries spanning the nation.3 John D. Rockefeller, similarly inclined but unsuccessful at convincing Congress to charter an eponymous foundation, resorted to the State of New York, which granted the foundation a charter in 1913.4 Progressive reformers looked askance at foundations, noting the hypocrisy of antilabor sentiment most conspicuous in Carnegie’s union busting

[ 18 ] Prelude

at his Hempstead steel plant, which claimed the lives of 16 workers, and also suspecting tax evasion by “robber barons.” Yet, early foundations introduced progress where government had been loath to tread.5 In the first decade of the 20th century, under the direction of Paul Kellogg, the Russell Sage Foundation funded the first extensive survey of the condition of immigrant workers in Pittsburgh,6 the majority of whom were working for Carnegie, who almost certainly looked askance at the Russell Sage Foundation’s intrusion into his domain. In 1909, the Rockefeller Sanitary Commission announced an initiative to eradicate hookworm from Southern field workers. Field hands were overwhelmingly black, and neither the Southern states nor the federal government had placed field hands as a public health priority, even though up to 40% of Mississippi schoolchildren were infected by a the hookworm parasite, which caused retardation but which could be prevented by wearing shoes and using privies.7 A seminal foundation project was the Carnegie Foundation’s support of Abraham Flexner’s famous Bulletin Number Four, which was published in 1910. Alarmed about the failure of medical education, which included dozens of diploma mills, the American Medical Association assigned Flexner to investigate the quality of physician training programs. After site visits at medical schools, Flexner reported that almost half were inadequate, lacking libraries, laboratories, and proficient faculty. Flexner insisted that medical education required science as a foundation, essentially necessitating universities as the locus of physician training.8 Following Flexner’s investigation, state medical associations were able to close the substandard training programs. Having moved physician training from the barbershop to the university, Flexner was invited to speak to the 1915 meeting of the National Conference on Charities and Corrections on the topic of whether social work was a profession. To the chagrin of the audience, Flexner concluded social work was not a profession because its methods were not scientific: Professions involve essentially intellectual operations with large individual responsibility; they derive their raw material from science and learning; this material they work up to a practical and definite end; they possess an an educationally communicable technique; they tend to self-​organization; they are becoming increasingly altruistic in motivation.9

Although nascent organizations serving the poor were supported by august foundations during the Progressive Era, such as the Russell Sage Foundation,10 social work remained ambivalent about science as a basis for professional practice, going so far as to abandon empiricism in favor

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of postmodernism late in the 20th century. Flexner concluded his career founding and directing the Institute for Advanced Study at Princeton University. America’s first Golden Age of Philanthropy was replicated by a second a century later when the digital technology of the information age produced another generation of mega-​ foundations, often named after their founders: Bill Gates, Warren Buffett, Mark Zuckerberg, Michael Bloomberg, Larry Ellison, and Jeff Bezos. In 2010, the Gates Foundation established the Giving Pledge, soliciting philanthropists to promise to expend their wealth in eradicating poverty and disease; by decade’s end, 150 had joined. The wealth of the new generation of foundations is striking, representing $6.6 trillion in donations over the next two decades.11 Reprising progressive reformers’ concerns about plutocratic influence in public affairs, criticism that new foundations would subvert democracy called into question philanthropists’ proper role in relation to government. The argument favoring foundations is threefold:  First, government may underserve or even damage citizens through retrograde programs, which foundations are free to investigate and to repair.12 Second, the majoritarian requirement for public policy not only ratifies the status quo but also establishes a high hurdle for creative, progressive programs. Third, the possibility of discovering new solutions to intransigent social problems is only possible via a private sector willing to risk investing in innovation.13 With respect to evidence-​based policy, Arnold Ventures established a beachhead in “disruptive philanthropy,” promising to fund any credible field experiment across an array of fields.14

FEDERAL REGULATION

Hallmarks of the Progressive Era would be the emergence of federal regulations to curb corruption in the polity and economy. Prior to the deployment of the social safety net, immigrants to America—​Irish, Jews, Italians, Slavs, Germans—​were left to their own devices to survive, at once evolving community-​based ethnic organizations for social support, but all too often resorting to back alleys, such as Hell’s Kitchen.15 As charity proved inadequate, big-​city political machines moved into the vacuum, dispensing jobs, distributing holiday dinners, and bribing city vendors. New  York’s Boss Tweed perfected the political machine, attracting the attention of muckraking journalists seeking to uncover municipal corruption. In one incident, Lincoln Steffens exposed the escapades of George Washington Plunkett, a Tammany Hall drone, who retorted, “Steffens means well, but

[ 20 ] Prelude

like all reformers, he don’t know how to make distinctions. He can’t see no difference between honest graft and dishonest graft and, consequently, he gets things all mixed up.”16 Efforts to reform municipal government led to New  York City’s establishing a civil service system, in which employees were assessed according to merit as opposed to political fealty. The assassination of President Garfield by a man who was angry because he had not received a patronage appointment provided the catalyst for the Pendleton Civil Service Reform Act of 1883 establishing merit as a basis for federal employment. Merit-​based civil service further propelled nascent professional organizations—​ the American Economic Association founded in 1885, the American Psychological Association in 1892, the American Political Science Association in 1906—​to place members in fledgling government bureaucracies.17 Municipal corruption was pedestrian compared to the “money trusts” that emerged in industry and banking. Dynastic wealth derived from monopoly capital had to be obscured, managed, and exploited, a service that powerful financial institutions were eager to provide. Unlike the local enterprises that coexisted with local government, as portrayed in de Tocqueville’s Democracy in America, industrialization begot enormous productive capacity that tended toward monopoly. Toward the end of the 19th century, trusts had expanded to communications (AT&T), meatpacking (Swift), electric lighting (General Electric), and tobacco (American Tobacco Company). Of the 50 or so trusts of the Progressive Era, Standard Oil, owned by John D. Rockefeller, became iconic, controlling 80% of oil production and 90% of pipelines; in effect, by controlling the fuel and lubricant of rapidly expanding manufacturing, Rockefeller had the economy by the throat.18 In order to evade legal reprisal, Rockefeller had organized Standard Oil as a “trust,” with its stock controlled by an independent board, not subject to Congressional interference. In 1890, the Sherman Antitrust Act was passed to prevent the formation of monopolies in business; significantly, professions were exempt from oversight. Forsaking public well-​being in favor of corporate profits, companies engaged in exploitive practices, which resulted in the creation of federal agencies to protect consumers, such as the Food and Drug Administration in 1906 and the Federal Trade Commission in 1914. Conceived during the Progressive Era, the regulatory state would blossom with the maturation of an industrial economy, especially during the New Deal with the addition of the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Farm Credit Administration in 1933, as well as during the 1970s with the addition of the Environmental Protection Agency in

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1970, the Federal Election Commission in 1971, and the Drug Enforcement Administration in 1973. Assigned to the Executive Branch, but designed to operate independently, the regulatory state evolved, on the one hand, to hold significant power over the industries under its supervision, or, on the other hand, to be subject to “regulatory capture” as executive personnel switched between corporations and federal regulatory authorities. The Progressive Era would crest in 1913 with two economic reforms. The Sixteenth Amendment to the Constitution attempted to level the financial playing field by assessing taxes on the wealthiest Americans. In that period, economic inequality yawned, with Wall Street tycoons establishing palatial estates while an unskilled worker at a steel mill would work 10 hours a day in a six-​day workweek for $12 and black sharecroppers in the Delta would earn $333 in a year. Although initially the income tax was hardly steep, assessed at 1% on incomes over $3,000 and 6% on those above $500,000, it was progressive, establishing higher rates for those with greater income.19 Significantly, the income tax fluctuated as the Treasury required income, primarily in wartime but in recessions as well. Countercyclical spending by the federal government would be a tenet of Keynesian economic theory, which was instrumental in pulling the nation out of the Great Depression but had lesser effect in the Great Recession of 2008.20 Although federal taxation had funded the Civil War, the Sixteenth Amendment caused a significant expansion of the Internal Revenue Service (IRS), in the process generating data that provided an accounting of income adequacy as well as disparity. No sooner had the Sixteenth Amendment been ratified than business lobbyists, religious and charitable organizations, and institutions of higher education demanded that Congress grant exemptions, which would include pensions, mortgage interest, health benefits, and philanthropic contributions to foundations. The Federal Reserve Act of 1913 reestablished a central bank, distributed through 12 districts and overseen by a five-​member board, which excluded bankers. The Fed’s authority was limited to regulating credit, requiring local banks to hold reserves, and printing currency when necessary, provisions designed to stabilize an economy that had been subject to wild, destabilizing fluctuations while not hampering financial markets. Federal Reserve Notes were backed “by the full faith and credit of the US government.”21 Notably, the influence of Wall Street became evident when the New York regional bank became dominant in the Federal Reserve system. The Fed served vital functions during recessions, and especially during the Great Depression, pumping money into a flagging economy, and, like the IRS, it became an essential source of information on the nation’s economic performance.

[ 22 ] Prelude

Progressive Era reforms, then, contained a rambunctious, industrial capitalism that was recession-​prone, while leveling the difference between the have-​yachts and the have-​nots. Government civil service made public policy less corrupt and more professional. Foundations emerged to support services to the indigent, to establish universities in which professional training programs were lodged, and to pioneer program innovations. A  burgeoning economy offered goods and services that elevated Americans to levels of consumption far exceeding that of the Civil War generation, and federal regulatory correctives were designed to guide, not strangle, an economy that was generating seemingly unending prosperity. The Great Depression put an end to that.

THE WELFARE STATE

Economic implosion began on October 29, 1929, “Black Tuesday,” when the stock market lost over 11% of its value. Fearful of recession, depositors rushed to local banks to claim savings, which were not insured, resulting in a nationwide run on banks. By 1933, 44% of banks had closed. Unemployment crested at 25%, with many families utterly destitute, overwhelming neighborhood Charity Organization Societies and Settlement Houses. In response, President Hoover opted to rely on the voluntary sector, with which he was familiar, having directed Red Cross relief during World War I.  Hoover’s hope that the economy would right itself, thus making government intervention unnecessary, prolonged suffering and contributed to instability. Exploiting tensions, the Industrial Workers of the World (“Wobblies”), a radical organization willing to destroy property to attack capital, organized strikes. “As a result of federal inaction, by the spring of 1933, the nation faced a serious threat. Disorder spread and talk of revolution was heard; many destitute and starving citizens had nothing but contempt for the government and the system that was responsible for their plight but that did little to alleviate their distress,” recounted a historian.22 As Governor of New  York, Franklin Roosevelt had overseen relief programs; however, by his inauguration in 1933, four years of strife had savaged large regions of the country. Immediately after his inauguration, Roosevelt declared a “banking holiday,” closing banks to stem the financial hemorrhaging. To put idle men to work, Roosevelt assigned Harry Hopkins to supervise the Federal Emergency Relief Administration, the Civil Works Administration, and the Works Progress Administration. These programs,

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along with the Civilian Conservation Corps and the Tennessee Valley Authority, enabled Roosevelt and Hopkins to put millions of men to work, diminishing labor discord. Having extensive experience with charitable organizations in New  York City, Hopkins determined that federal funds would not be diverted to private agencies. Then, with the assistance of other progressive Democrats, some of whom moved into the White House to join Eleanor Roosevelt, other strategies and programs emerged, forming the New Deal. Six years after Wall Street crashed, the American welfare state was established through the Social Security Act. Dually structured, the Act provided social insurance (Social Security and Unemployment Compensation) to workers, separate from public assistance (Aid to the Blind, Aid to the Disabled, Old Age Assistance, and Aid to Dependent Children) for nonworkers. As a concession to Southern Congressmen fearing that welfare would subvert the Jim Crow labor system, public assistance was designed in partnership with the states, who shared costs with the federal government. Soon two benefit disparities emerged. Minorities in the South and Southwest not only were less likely than whites to be eligible for benefits, but also received lower grants as well. Accordingly, mothers on public assistance received lower benefits than male workers receiving social insurance benefits. The United States’ involvement in World War II proved crucial to putting the Great Depression in the past, and a vibrant postwar economy made America’s welfare state affordable, thus facilitating incremental expansion of existing programs. Regardless, poverty among minorities became an unavoidable problem, brought to public attention by documentary films and Michael Harrington’s The Other America. A  burgeoning economy combined with President Lyndon Johnson’s attempt to make his policy imprint independent President Kennedy’s, resulted in the mid-​1960s War on Poverty. With the exception of a single social insurance addition, Medicare, all of Johnson’s antipoverty programs consisted of public assistance, targeted to the minority poor: examples include Head Start, the Elementary and Secondary Education Act, Medicaid, Food Stamps, the Community Mental Health Centers Act, and Job Corps, among others. Although these programs addressed the inadequacy of public assistance in the original Social Security Act, they also proved a magnet for criticism, especially from conservatives, who noted, quite accurately, that work was not a requirement for eligibility, in contrast to the case for social insurance benefits. The American welfare state, engineered primarily by Democratic presidents (FDR and LBJ), was also expanded by a Republican, Richard Nixon, during the 1970s. Nixon’s advisor Daniel Patrick Moynihan had proposed

[ 24 ] Prelude

a guaranteed annual income in order to simplify public assistance, but the Family Assistance Plan was rejected by the Senate Finance Committee, which did approve a fallback plan predicated on work, the Earned Income Tax Credit, thus introducing the Treasury as a source of family welfare. In another reform, Old Age Assistance, Aid to the Blind, and Aid to the Disabled were consolidated into Supplemental Security Income, which was assigned to the Social Security Administration, although remaining a public assistance program. These changes were complemented by increases in other program allocations sufficient that, even as Nixon executed rescissions in the War on Poverty, federal social spending increases were comparable to those under previous Democratic presidents, reflecting the ascendant liberalism of the postwar era.23 The welfare state, replicated in other industrial nations, represented no less than the institutionalization of human progress, but the concept orbited around democratically controlled government—​as Tony Judt observed, “The thought that [pensions and healthcare] were best done by the government and that therefore they should be done by the government: this was unprecedented.”24 Federal social spending after the 1960s increased dramatically, as depicted in Figure 1.1. Despite total growth, subthemes are evident, particularly the minimal growth of food and nutrition, the Earned Income Tax Credit, and Supplemental Security, compared to Social Security, Medicare, and Medicaid, which reflect an aging population. Another factor warrants attention: all of these programs are entitlements, so benefits are paid in relation to eligible beneficiaries as opposed to a predetermined budget. Moreover, an additional outlay is included in Figure 1.1 that relates to interest on the national debt. In order to maintain the “full faith and credit of the US government,” interest payments on Treasury securities are obligatory. By 2022, these interest payments, quite independent of the federal debt principal, are projected to be comparable to expenditures for Medicare. As federal social programs expanded, so did the administrative capacity of oversight agencies, especially their management information systems. Foremost, the Census, constitutionally mandated every decade, not only has provided data of immeasurable value to government and commerce, but also is necessary for drawing congressional districts. In addition, the Federal Reserve’s Survey of Consumer Finances (SCF) samples American households every third year to determine income from various sources, with the data tabulated in relation to demographic variables. Complementing the SCF, the Bureau of Labor Statistics conducts Consumer Expenditure Surveys to assess income and spending patterns. The Assistant Secretary for Planning and Evaluation (ASPE) of the Department of Health and Human Services monitors an array of social programs related to disability, health,

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1200

1000

800

600

400

200

0 1962

1972

1982

1992

2002

Medicaid

UnempComp

Medicare

Food+Nut

SocialSec

InterestDebt

2012

2022

SuppSecInc EITC

Figure 1.1.  Federal outlays by major category and decade, in $billions. Source: Congressional Budget Office, https://​www.gpo.gov/​fdsys/​granule/​BUDGET-​2013-​TAB/​BUDGET-​2013-​ TAB-​11-​3/​content-​detail.html, Table 4.1.

welfare, long-​term care, child welfare, and mental health. The Centers for Medicare and Medicaid Services (CMS) collect information on federal and state healthcare programs. Parallel to the regulatory state, the bureaucratic state collects volumes of administrative data relating to services provided to Americans, empirical data providing a portrait of citizen welfare. Coevolving nonprofit organizations seek to conform public agencies to their private agendas. AARP, formerly the American Association for Retired Persons and billing itself as the largest membership organization in the world, focuses on Social Security, Medicare, and Medicaid; the Kaiser Family Foundation generates data on healthcare; the Children’s Defense Fund advocates for the well-​being of poor children of color. Even the federal debt has its own monitor, the Peterson Foundation, which promotes sustainable economic practices. As has been the case with exchanges of personnel between corporations and regulators (regulatory capture), voluntary agency staff from advocacy organizations and foundations also migrate to and from government agencies. More sophisticated advocacy

[ 26 ] Prelude

organizations employ federal data to promote their agendas, sometimes in collaboration in order to maximize impact. The extension of governmental authority, expansion of rules and professional personnel, proliferation of ancillary advocacy organization, and consumption of tax revenues have led critics to condemn public agencies as representing an impenetrable and unaccountable “fourth branch” of government, “an administrative state of sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.”25

CORPORATIZATION

Just as foundations and regulatory agencies were precursors of the governmental welfare state, so public social programs have more recently been delegated to corporations, especially in healthcare. Certainly, the founders of the American welfare state, New Dealers and War on Poverty advocates, presumed that government would be the basis of benefits; however, the most recent expansions have been to the ideological right as lobbyists convinced Congress and Republican as well as Democratic presidents to place public services in corporate hands. Thus, privatization, facilitated by neo-​ liberalism, became an animating dynamic that not only profited firms engaged with the welfare state, but also furthered pluralism in public policy. Privatization has been an anathema for pro-​government advocates of social justice; however, Stein Ringen presented a powerful argument in favor of commerce in social insurance, insofar as commercial competition would put pressure on the state social insurance to perform. To keep insurers, it would have to offer insurance that is as good as insurers could buy elsewhere. With monopoly protection, the state social insurance program would be shielded against such pressure, and insurers might have reason to suspect that their insurance savings were being maintained with less efficiency than possible.26

Commercialization of care originated with the passage of Medicare and Medicaid in 1965. In order to finance a costly war in Southeast Asia and to avoid the expense of a national VA-​like system, Congress elected to reimburse private healthcare providers. While many were, and remain, small entities, such as physicians in solo practice and community hospitals, the prospect of an emerging market quickly attracted investors eager to profit from the elderly and poor. Franchised skilled nursing care, home care, and continuing life care communities followed for-​profit hospital chains as major purveyors of healthcare. Relatively incremental changes

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in federal policy catalyzed niches in American’s healthcare market. The Health Maintenance Act of 1973, for example, provided federal subsidies to managed care plans, and in 1983 Medicare added a hospice benefit. In both instances, what had started as nonprofit providers became commercial, complementing America’s burgeoning healthcare market. In 1997, the State-​Children’s Health Insurance Program (S-​CHIP) was implemented, salvaging the failed Health Security Act27 and offering the states options of expanding Medicaid or establishing a separate program to insure low-​ income children against illness. As the healthcare market expanded, providers, including Hospital Corporation of America, Tenet, Molina, WellCare, Centene, and dozens of others, established trade associations to craft public policy to their members’ requirements. The first major coup for healthcare trade associations was the Medicare Modernization Act (MMA) of 2003, which added the prescription drug benefit, Part D, to Medicare. In order to ensure his reelection, George W. Bush proposed a drug benefit in 2001, which was applauded by the pharmaceutical industry as well as AARP. Within months, the Pharmaceutical Research and Manufacturers of America (PhRMA) hired lobbyists to craft legislation. In 2002, the top 15 drug companies and PhRMA spent $82.5 million on lobbying, and the following year they spent $81.5 million. MMA barely passed due to budget hawk concerns about worsening the federal debt, but, when it emerged after an unprecedented, delayed vote, the bill reflected Big Pharma priorities, such as distribution of medication through prescription benefit managers (PBMs). The bill also included a “noninterference clause” that prevents the federal government from bargaining directly with drug companies to reduce the price of medication, as it had with the VA and health insurance companies. As dozens of PBMs suddenly surfaced to serve seniors, the elderly struggled to make sense of a kaleidoscope of different plans, and the new drug market eventually consolidating around a few prescription firms. The health reform strategy of the Obama Administration relied on Congressional committees to draft legislation, which catalyzed an unprecedented infusion of cash and a hoard of lobbyists to Capitol Hill. In 2009, in the run-​up to what became the Affordable Care Act (ACA), healthcare trade associations and firms spent $383.7  million on lobbying by 5,033 lobbyists, an amount that was exceeded the following year, with $516.6 million for 4,544 lobbyists, more than eight for every member of Congress. Accordingly, ACA incorporated the priorities of major trade associations, including the American Medical Association, the American Hospital Association, the Federation of American Hospitals, America’s Health Insurance Plans, and PhRMA.

[ 28 ] Prelude

To optimize the chances for ACA’s passage, the Obama Administration omitted a single-​payer plan, deferring to healthcare markets; however, a pivotal Senate Finance Committee decision also deleted a public option that would have allowed consumers to purchase Medicare. Even though ACA limited the administrative costs of health insurance companies, the Act proved a windfall to health insurers, not only mandating that Americans purchase insurance, but also providing federal subsidies to low-​and middle-​income consumers. Moreover, the MMA “noninterference clause” was continued at the insistence of Big Pharma. A  2012 Supreme Court decision making the Medicaid expansion component a state option offered an opportunity for blue-​state Republican governors to seek waivers permitting them to divert Medicaid funds to purchase commercial health insurance for low-​and middle-​income families, an option readily supported by healthcare companies, and, paradoxically, the liberal New York Times, as well.28

SCIENCE AT THE FDA

The influence of Big Pharma on the construction of health policy has affected the FDA, which has the longest history among federal agencies of using science to protect the public against contaminated, harmful products. Initially using chemistry to identify polluted products, the FDA faced stiff resistance from companies accustomed to free rein in marketing. In 1937, more than 100 people died from an elixir containing a toxic solvent, leading FDR to sign legislation authorizing the FDA to approve medication before drugs went to market. Subsequently, premarket testing of drugs followed, with the advent of penicillin and insulin. A 1950 appellate decision further authorized the FDA to address “false therapeutic claims,” a post-​market intervention. Continued resistance of the pharmaceutical industry to FDA influence stymied federal oversight, however, until the 1959 thalidomide tragedy, when pregnant American women were prescribed a British anti-​nausea drug that had not been approved by the FDA, resulting in thousands of deformed infants. The expansion of procedures for evaluating new drugs lengthened the time-​to-​market schedule, attracting the ire of AIDS activists who contended that delays in FDA approval consigned gay men to unnecessary death. In addition to accelerating the FDA approval process, subsequent legislation has encouraged drug companies to develop “orphan drugs” to treat children with rare disorders.29 The FDA’s drug trials reflect the complexities of putting science to public benefit. When a pharmaceutical company wants to test a new drug formula,

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it completes an Investigational New Drug (IND) application, which gives information on the chemical composition of the medication as well as results of animal tests.30 With FDA approval, a four-​stage protocol of clinical trials commences, through which human subjects are randomly assigned to a treatment group receiving the proposed medication or to either a placebo group receiving a sugar pill or to a group receiving a currently licensed medication. Contract research organizations (CROs), networks of physicians and researchers, manage the 288,280 clinical trials in the United States and other countries.31 Clearly, clinical drug trials have become big business. Optimally, double-​blind clinical trials, where neither the researcher nor the subject knows who receives the treatment medication or the placebo/​other medication, reveal the true effects of the substance being tested. Thus, the FDA approval process is in four phases: Phase I exposes a small group of humans to the drug to determine its safety by monitoring for side effects. Phase II exposes a few hundred patients with a disease to the medication. Phase III includes thousands of patients who are assigned to a test or a control group. Phase IV involves post-​market trials to determine new uses and to expand marketing for existing drugs.32 Despite the portrait of pharmaceutical science progressing under diligent government oversight, the FDA drug approval process has been problematic. A fundamental problem is that the FDA often relies on drug companies to mount clinical trials, an arrangement that saves the government money, although the expense is folded into drug prices. As drug companies attempt to contain the expense of clinical trials, many resort to sponsoring studies overseas in developing countries, where costs are lower, patient protections are jeopardized, and oversight is suspect.33 Reliance on drug companies to manage clinical trials skews results: an analysis of 500 clinical trials found that industry-​funded studies yielded positive results 85% of the time, while only 50% of trials funded by the government yielded positive results.34 Possible explanations for the discrepancy include manipulation of clinical trials through such questionable practices as ending trials early and substituting intended outcomes, and replacing preliminary outcomes that were not validated with alternatives that were confirmed. The scientific integrity of trials is further compromised by the fact that clinical data are proprietary, essentially owned by drug companies. Even when clinical trials are logged into a registry, negative results often become public only after independent, often academic, researchers diligently cull through published and unpublished reports to determine actual effects. Finally, drug companies can choose which clinical trials to submit to the FDA, burying those with poor results. Marcia Angell, former editor of The New England Journal of Medicine, reported that the FDA “usually requires

[ 30 ] Prelude

simply that the drug works better than a placebo in two clinical trials, even though it doesn’t in other trials. But companies publish only the positive results, not the negative ones.”35 Finally concern has arisen about Phase IV trials, which engage physicians in marketing of approved medication. In this instance, representatives of drug companies subsidize physicians’ attendance at seminars at plush resorts, choreograph ghost authors to write glowing articles about drugs, and pay stipends to researchers to endorse medication, even though these practices are questionable, if not unethical. In the late 1990s, for example, the anti-​ inflammatory medications Vioxx, Celebrex, and Bextra were marketed to relieve arthritis pain, but patients taking these drugs suffered heart attacks, which prompted a public review. During the review, the arthritis medications were either withdrawn or were subject to reevaluation after reports revealed that several of the FDA panelists voting on approval of the drugs had been paid by drug companies.36 In another case, a review of selective serotonin reuptake inhibitors (SSRIs) challenged the chemical theory behind the blockbuster medications, such as Prozac, Zoloft, and Celexa, and concluded that such drugs doubled suicidal ideation among adolescents.37 In 2014, the manufacturer of Celexa, an SSRI, paid a settlement of $18.1 million for encouraging doctors to write off-​label prescriptions for children, who suffered adverse effects.38 Equally troubling, antipsychotic prescriptions had migrated from patients with serious mental illness to the general population, with one in eight Americans taking medication intended for psychosis and serious depression.39 Perhaps most disturbing is a trend in treatment of young children: initially, diagnosis of attention deficit hyperactivity disorder and prescriptions of Ritalin and Vyvanse were prevalent, but the diagnostic focus has changed to oppositional defiant disorder and patients are given SSRIs in order to control aggressive behavior.40 Such practices intrude into child welfare when children in foster care are significantly more likely to be prescribed antipsychotics. A  2008 Government Accountability Office (GAO) report revealed that foster children in five states received not only more psychoactive drugs, but also higher doses than children in the general population.41

CODA

The notion that empiricism can benefit a citizenry, which originates with Auguste Comte’s application of the Enlightenment to social science,42 encounters institutional resistance in contemporary societies. Empirical evidence for public benefit thus lies at the intersection of competing

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information streams: First, firms exploit markets by assessing consumer preferences, by investing in product development, and by marketing innovations to the public. Commercial R&D is proprietary, and companies are diligent about preventing national and international competitors from acquiring trade secrets. With the advent of the Internet and social media, firms develop sophisticated algorithms to ascertain consumer behavior, extending their capacity to customize product placement. Thus, “market rationality” has become prominent in public discourse.43 Second, federal regulatory agencies and departments construct and update data sets as part of their legislative remit. Big Data permits legislatures to monitor public well-​being and to adjust surveys in relation to new developments. Government survey data are public and readily accessible, although the development of instruments is the province of government-​employed experts. Thus, administrative data, an artifact of “bureaucratic rationality,” has become essential for oversight of public policy. As the FDA drug approval process demonstrates, companies and bureaucracies have quite different orientations to research, resulting in disputes about the value of data, its provenance, and its use. That these have become institutionalized presents fundamental problems for the promise of evidence-​based policy. Analysts refer to “path dependence,”44 the organizational equivalent of Newton’s First Law of Motion, to describe corporate and bureaucratic inertia and historically determined vectors. Working out of foundations and think tanks, proponents of evidence-​based policy must carve out space for innovation, experimentation, and evaluation, which is unlikely to go uncontested by agents representing the status quo. The possibility of evidence-​based policy, then, not only brings with it the baggage that compromises research at agencies, such as the FDA, but also the quite substantial benefits of applying experimental methods to intuitively based programs that have evolved through political advocacy, but which are of mixed benefit to citizens. The next chapter on children’s services explores the advantages and difficulties in extending evidence-​based policy farther afield.

NOTES 1. Robert Gordon, The Rise and Fall of American Growth (Princeton, NJ: Princeton University Press, 2016). 2. Edmund Morris, Theodore Rex (New York: Random House, 2001), pp. 20–​21. 3. Elizabeth Kolbert, “Shaking the Foundations,” New Yorker, August 27, 2018.

[ 32 ] Prelude

4. Rob Reich, “On the Role of Foundations in Democracies,” in Rob Reich, Chiara Cordelli, and Lucy Bernholz, eds., Philanthropy in Democratic Societies (Chicago: University of Chicago Press, 2016). 5. Conventional histories of American social welfare give short shrift to, if not omit entirely, the contributions of foundations. Many accounts associate philanthropy with Social Darwinism, while preferring government responsibility for social progress. This omission reflects revisionist history, insofar as private, nonprofit organizations, ranging from the National Association of Colored People to the American Federation of Labor-​Congress of Industrial Organizations and the National Organization of Women, are not only private organizations advocating for progressive causes but have often received foundation support as well. 6. https://​en.wikipedia.org/​wiki/​The_​Pittsburgh_​Survey 7. David Stoesz, “The Excluded: An Estimate of the Consequences of Denying Social Security to Agricultural and Domestic Workers” (St. Louis, MO: Center for Social Development, 2016). 8. Paul Starr, The Transformation of American Medicine (New York: Basic Books, 1982), pp. 117–​23. 9. Abraham Flexner, “Is Social Work a Profession?” Proceedings of the National Conference of Charities and Corrections, 1915, p. 581. 10. Stanley Wenocur and Michael Reisch, From Charity to Enterprise (Urbana, IL: University of Illinois Press, 2001), pp. 55–​58. 11. David Callahan, The Givers (New York: Knopf, 2017), p. 18. 12. Chiara Cordelli, “Reparative Justice and the Moral Limits of Philanthropy,” in Rob Reich, Chiara Cordelli, and Lucy Bernholz, eds., Philanthropy in Democratic Societies (Chicago: University of Chicago Press, 2016). 13. Rob Reich, op cit. 14. David Callahan, The Givers. Pp. 147–​57. 15. Charles Loring Brace, The Dangerous Classes of New York (New York: Wynkoop & Hallenbeck, 1872). They were indelibly portrayed in the photographs of Jacob Riis. 16. Justin Kaplan, Lincoln Steffens, (New York: Simon & Schuster, 1974), pp. 50–​1. 17. C. Wright Mills, Sociology and Pragmatism (New York: Oxford University Press, 1966), pp. 70–​1. 18. Charles Geisst, Wall Street (New York: Oxford University Press, 1997), p. 100. 19. Isaac Martin, Rich People’s Movements (New York: Oxford University Press, 2013). 20. Barry Eichengreen, Hall of Mirrors (New York: Oxford University Press, 2015). 21. Geisst, Wall Street, p. 130. 22. Walter Trattner, From Poor Law to Welfare State (New York: Free Press, 1974), p. 234. 23. William Voegeli, Never Enough (New York: Encounter Books, 2012), p. 39. 24. Tony Judt, Ill Fares the Land (New York: Penguin, 2010), p. 74. 25. Jonathan Turley, “The Rise of the Fourth Branch of Government,” Washington Post, May 24, 2013. 26. Stein Ringen, What Democracy is For (Princeton, NJ: Princeton University Press, 2007), pp. 106–​07. 27. Lawrence Jacobs and Theda Skocpol, Health Care Reform and American Politics (New York: Oxford University Press, 2010), pp. 24–​30. 28. David Stoesz, The Dynamic Welfare State (New York: Oxford University Press, 2014), ch. 6.

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29. https://​en.wikipedia.org/​wiki/​History_​of_​the_​Food_​and_​Drug_​Administration 30. Fran Hawthorne, Inside the FDA (New York: Wiley, 2005), p. 82. 31. https://​clinicaltrials.gov/​ 32. Marcia Angell, The Truth About the Drug Companies (New York: Random House, 2005), pp. 26–​30. 33. Arun Bhatt, “Quality of Clinical Trials: A Moving Target,” Perspectives on Clinical Research, 2011 Oct–​Dec; 2(4): 124–​28. 34. Ben Goldacre, Bad Pharma (New York: Faber and Faber, 2012), p. 1. 35. Angell, The Truth About the Drug Companies, p. 112. 36. Angell, The Truth About the Drug Companies, pp. 265–​76. 37. Irving Kirsch, The Emperor’s New Drugs (New York: Basic Books, 2010), p. 151. 38. https://​www.druglawcenter.org/​celexa/​ 39. Robert Whitaker, Anatomy of an Epidemic (New York: Crown, 2010), p. 321. 40. Lwarence Diller, Should I Medicate My Child? (New York: Basic Books, 2002). 41. https://​www.gao.gov/​assets/​590/​586907.pdf 42. https://​en.wikipedia.org/​wiki/​Auguste_​Comte 43. Robert Alford, https://​www.ncbi.nlm.nih.gov/​pmc/​articles/​PMC2441520/​ 44. Rudolf Klein and Theodore Marmor, “Reflections on Policy Analysis,” in Michael Moran, Martin Rein, and Robert Goodin, eds., The Oxford Handbook of Public Policy (New York: Oxford University Press, 2006), pp. 902–​04.

[ 34 ] Prelude

CHAPTER 2

Wednesday’s Children

T

he innocence and fragility of children make childhood a primary concern for Americans; yet, states vary considerably with regard to opportunities children may expect as they mature. The Measure of America computed an Opportunity Index for 2015, consisting of 16 variables. While Vermont ranked first, with a score of 66.0, Nevada and New Mexico tied for last place, with scores of 43.8. The prosperity of children in the Southwest is about half that of kids from New England.1 States comprising the poverty belt, spanning the South and Southwest as well as Appalachia, are at the bottom of the ranking. While contemporary institutions and practices maintain disparity in opportunity, history has played an essential role as well.

THE PROGRESSIVE ERA

As reformers addressed problems associated with immigration and industrialization, after the Civil War, many focused on children. Charles Loring Brace of the New York Children’s Society, wrote a testimonial, The Dangerous Classes of New York, & Twenty Years Among Them, which depicted graphically the circumstances of the poor he encountered, as well as his choice of intervention. Another old rag picker I remember whose shanty was a sight to behold; all the odds and ends of a great city seemed piled up in it—​bones, broken dishes, rags, bits of furniture, cinders, old tin, useless lamps, decaying vegetables, ribbons, cloths, legless chairs, and carrion, all mixed together, and heaped up nearly to Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

63

the ceiling, leaving hardly room for a bed in the floor where the woman and her two children slept. Yet all these were marvels of health and vigor, far surpassing most children I know in the comfortable classes. The woman was German, and after years of effort could not be induced to do anything for the education of her children, until finally I put the police on their track as vagrants, and they were safely housed in the juvenile asylum.2

Like thousands of children afterward, the German mother’s children would be shipped by train from the Juvenile Asylum in New York City to the Midwest, where they would be adopted by farm families, an early form of foster care and a practice the Children’s Aid Society would continue for decades. In Chicago, Jane Addams took a decidedly different approach at Hull House. In Twenty Years at Hull House, she recalled a German mother who earned 35 cents a day as a laundress, who was concerned about losing her daughters to vice on the street. We early learned to know the children of hard driven mothers who went out to work all day, sometimes leaving the little things in the casual care of a neighbor, but often locking them into their tenement rooms. . . . When the hot weather came, the restless children could not brook the confinement in the stuffy rooms, and, as it was not considered safe to leave the door open because of sneak thieves, many children were locked out. During our first summer, an increasing number of these poor little mites would wander into the cool hallway of Hull House. We kept them there and fed them at noon, for which we were sometimes offered a hot penny which had been held in a tight little fist “ever since mother left this morning to buy something to eat with.” . . . Hull House was thus committed to a day nursery which we sustained for sixteen years first in a little cottage on a side street then in a building designed for its use called the Children’s House.3

Hull House thus became emblematic of a community development approach to addressing the needs of the urban poor. Meanwhile, Josephine Baker, a pioneer in a nascent public health movement (who was often remembered for her interdiction and quarantine of “typhoid Mary,” an Irish cook who spread the typhoid bacilli through handling food and killed some of her diners) advanced multiple innovations. Appointed in 1910 to direct New York City’s Bureau of Child Hygiene, Baker used her authority to assign nurses to visit pregnant women and young mothers to improve infant care. Because contaminated milk compromised infant development, Baker established a network of “milk stations,” which

[ 36 ] Prelude

were staffed by nurses and doctors providing baby exams in addition to nutrition, and which lured mothers by offering lowered milk prices. After observing that many of the hundreds of abandoned infants placed in a foundling hospital died despite adequate medical attention and nutrition, Baker experimented with infant placement. Boarding the sickest infants with volunteer Italian mothers, who lavished the children with affection, Baker reduced the infant death rate significantly. When the city balked at supporting Baker’s health programs, she resorted to philanthropy. Two years as head of the Bureau of Child Hygiene had already given me a lifetime of experience with municipal financiers, so I did not try to argue the point. If the city would not supply public funds, we would have to get private funds. With splendid public spirit Mrs. J. Borden Harriman formed a committee to raise enough money to start thirty baby health stations and keep them open for a few months. She raised about $165,000 from her wealthy friends and people on Wall Street, and this mechanism for supplying the babies of the poor with the necessity of life started to function on strictly capitalist money.4

Baker also insisted on licensing midwives to improve deliveries. Immigrant mothers were accustomed to relying on midwives, who spoke their language but adhered to unhygienic cultural practices, leading Baker to disdain the typical midwife as “usually densely ignorant and therefore filthy, superstitious, [and] hidebound.” Worse, in order to supplement meager earnings, many midwives performed abortions, claiming the lives of many women. After rounding up almost four thousand midwives, Baker’s Bureau provided a free six-​month training course. Graduates of the course were granted a license, and the course thus provided improved obstetrical care for mothers who had been shunned by physicians in private practice.5

THE CHILDREN’S BUREAU

Advocates for poor immigrant mothers and their children worked on several fronts to advance their cause. City children’s bureaus modeled after Baker’s agency spread through metropolitan areas. At the state level, progressives successfully established mothers’ pensions, modeled on aid to families with a disabled breadwinner. Momentum built for a federal agency to outlaw child labor, to regulate working conditions for women, and to support indigent families. Due to patriarchal cultural norms, Congressional ambivalence, and Supreme Court decisions based on Tenth Amendment dictates

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that social welfare was the province of the states, attempts to create a federal children’s agency proved exasperating for progressive reformers. Yet, progressives, mobilizing a nationwide network of women’s clubs and Settlements Houses, persevered. Reformers convinced President Theodore Roosevelt to sponsor a White House Conference on the Care of Dependent Children, which convened in 1909. Established in 1912, the Children’s Bureau was led by Julia Lathrop, a Settlement veteran, who became the first of several women who championed child and maternal policies. Lathrop’s strategy for building the Children’s Bureau was twofold:  first, generate data essential to establish a baseline from which progress could be measured, and, second, collaborate with states and localities to build public support: “No legislation can be secured, no legislation when secured can be made effective, without the steady conscious push of a convinced public opinion, and the statistics of wisely conducted inquiries form the indisputable basis of facts which will at once convince and inspire public opinion.”6 State data on maternal health and infant mortality were sometimes nonexistent, so the Children’s Bureau organized a national survey to collect local data, helping make the case for federal maternal and child health legislation. Proposed by Jeannette Rankin (R-​MT), the first woman elected to Congress, the Sheppard-​Towner Act was signed by President Taft in 1921, authorizing federal funds as a match to state appropriations for maternal and child health. Eventually, Sheppard-​Towner would succumb to budget pressures associated with World War I, but it became a benchmark not only for the Progressive movement, but also for women’s leadership in public policy. In addition to maternal and child health, the Children’s Bureau fought for legislation prohibiting child labor as well as funding for fatherless families. Contemporary norms dictated that male breadwinners were responsible for family support, but fathers disabled in industrial accidents were unable to fill that paternal role, providing the impetus for aid to widows and dependent children through “mothers’ pensions.” By 1913, 39 states had established mothers’ pensions; by 1934, the first year of the New Deal, the number had grown to 46.7 While the expansion of mothers’ pensions represented a national concern for the welfare of poor families, state programs were not generous, tended to be reserved for white households, and included means-​testing on income and assets. In this respect, mothers’ pensions incorporated a heavy dose of morality, as one historian observed: “Despite the spotlight on ‘innocent’ widows, mothers’ aid was never meant to be open armed or trusting toward those it helped. To the contrary, mothers’ aid functioned and was intended to superintend and discipline as well as support the recipients.”8 Maternalism thus represented

[ 38 ] Prelude

a new vector in welfare policy, supporting indigent families but at the same time requiring them to conform to paternal norms, which could be strict, and denying benefits to divorced mothers and those without citizenship, long residence, and “proof of utter destitution.”9 If mothers’ pensions deferred to patriarchal norms of the period, federal funding predicated on state contributions proved a Faustian bargain. Progressive women hewed to the belief that a woman’s place was in the home, even more so for mothers; however, this ran counter to practices among plutocrats in the South and Southwest, who depended on women to provide low-​wage domestic and field work. Accordingly, the more affluent, generous, and inclusive states of the Northeast had larger caseloads, offered better benefits, and included minority mothers, while the states of the South and Southwest, which provided miserly benefits to few families and excluded minority mothers from aid, were in effect requiring mothers of color to work at any wage available. Often, the benefits that were available fluctuated according to seasonal work, with minimal benefits offered before harvest time and benefits dropping to zero to ensure the availability of fieldworkers.10 Even more perniciously, state welfare administrators often reserved benefits to “deserving” mothers, proscribing certain behaviors and conveniently excluding aid to mothers of color.11 Absent government support, poor minority mothers had little recourse but to rely on religious, civic, and fraternal organizations in their communities.12

THE SOCIAL SECURITY ACT, TITLE IV

Six long years after the onset of the Great Depression, the Social Security Act (SSA) inaugurated the American welfare state, importing mothers’ pensions for poor families. Implicit gender roles were embedded in the Act: social insurance for male breadwinners was differentiated from public assistance for nonworkers, largely women. Further impeding the crafting of a unified welfare state, public assistance was left to the states not only to manage but also to establish benefit levels. As had been the case with mothers’ pensions, poorer states with larger populations of color could ration benefits to the minority poor.13 These flaws in the SSA, codified in Title IV, have confounded the availability of cash benefits as well as services to low-​income families, adversely affecting children. Because the Great Depression did not abate until the United States entered World War II, New Dealers’ attempts to aid destitute mothers in the early years of the SSA were contingent on states’ willingness to supply funds under the new Aid to Dependent Children (ADC) program, which

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competed with similarly designed programs for the blind, aged, and disabled. Whatever state resources remained after funding of programs for the “deserving poor” tended to be allocated to upstanding white widows with children, leaving mothers of color to fend for themselves—​as one proponent put it in Congressional testimony, federal assistance was intended for “really nice children and the families [that] are really nice.”14 Accordingly, ADC enrollments were low, never approximating the scale of need. In deferring to states, Title IV provisions called for the federal government to reimburse the states for one third the cost of cash benefits for eligible children, initially $18/​month for the first child plus $12/​month for any additional children. In contrast, SSA offered to subsidize states for half the cost of Old Age Assistance, Maternal and Child Health, and Aid to the Blind.15 For cash-​strapped states, the incentives clearly advantaged beneficiaries other than dependent children. Moreover, federal assistance to states specified cash assistance only, contingent on an acceptable state plan. As a legacy of state mothers’ aid programs, Title IV state plans included a caseworker to monitor benefit awards as well as maternal conduct. State plans varied considerably, with richer states using Civil Service regulations to specify minimal educational requirement for a caseworker and a degree in social work for a supervisor, while poorer states opted for much less. The insertion of social work into nascent public welfare would be a mixed blessing. Certainly, educated caseworkers were superior to untrained busybodies; however, their supervisors with Master of Social Work degrees often had graduated from private universities with clinical training focusing on Freudian theory, as opposed to knowledge about the extensive problems associated with poverty. This condescension was embedded in the professional–​client relationship; as one historian noted, “Overall the continuing premise of the social work mainstream was that welfare clients could not define their own needs properly without professional expertise.”16 In subsequent decades, Title IV would languish, underfunded by states and staffed by caseworkers and supervisors with little appreciation for the impact of poverty. The denial of benefits to mothers of color was a striking contradiction to the purpose of Title IV, but there was little concern for powerless minority families who lacked political influence. That indifference would change abruptly during the 1960s, when the civil rights movement empowered antipoverty activists, who fought for welfare rights. LBJ’s War on Poverty provided substantive benefits and services to the minority poor who had been neglected by state-​directed public assistance programs, but programs like Head Start, Food Stamps, and Medicaid were in their infancy. Recognizing the relationship between political power and welfare

[ 40 ] Prelude

benefits, George Wiley and other veterans of the civil rights movement organized the National Welfare Rights Organization (NWRO) in 1966 to represent poor African American mothers. Recognized by Martin Luther King as a partner in his Poor Peoples Campaign, NWRO challenged established welfare programs for being stingy and exclusionary. When a cadre of radical social workers joined the campaign, annoying federal authorities, Daniel Patrick Moynihan proposed a solution to President Nixon:  separate cash benefits from social services, essentially removing those social workers concerned about low-​income households from public assistance programs and reassigning them to social care, primarily child protection. Social work professional associations, long frustrated by having their members do family budgeting and monitoring, which was considered nonprofessional, readily agreed. Thus, the Social Services Block Grant (SSBG), Title XX of Social Security, was created in 1975. Capped at $2.5 billion, SSBG demonstrated not only professional social work’s waning interest in poverty, but its poor grasp of policy as well: Because SSBG was a capped appropriation, federal funds gradually fell in relation to inflation, further defunding the social services to which social work had subscribed, and professional associations were clueless about a fiscal arrangement that guaranteed defunding of social care.17

CHILD WELFARE

Imitating the financing arrangement established by maternal and child health, federal funding for child welfare provided incentives for states to build programs around three foci: child protection, foster care, and adoption. This trinity was sequential, insofar as many maltreated children were placed in foster homes from which they might be adopted. Despite the sequencing logic, the programming that evolved was anything but logical. In the last decades of the 20th century, stories of the state’s failure to protect maltreated children began appearing in regional newspapers. New Yorkers read about a series of gruesome child murders in The New York Times—​Elizabeth Steinberg in 1987, Elisa Izquierdo in 1995, and Nixzmary Brown in 2006—​and the stories prompted reforms of the city’s children’s services departments. But questionable child welfare services had become a national problem. During the later decades of the 20th century, parents and childcare workers were arrested and jailed on the basis of children’s and adults’ recall of incidents revealed through bogus “recovered memories” therapy. Upon review of video-​taped interviews, it became evident that child psychologists

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and social workers had prompted responses from the children who claimed they had been subjected to the most sordid abuse.18 Appeals would exonerate the alleged malefactors, although not until some had spent many years in jail. For example, during the early 1990s in San Diego, Child Protective Services (CPS) was so rife with ineptitude that a grand jury issued a report, “Children in Crisis,” after the Child Abuse Coordinating Council, having asked the coroner’s office to review child fatalities, concluded that 56 children had died despite being active CPS cases during the previous year. Meanwhile, CPS workers were being trained to confront “satanic abuse,”19 another bogus problem.20 In 2000, Alvin Schorr, a national expert on children’s services, lamented, “Child welfare around the country is in a parlous state. In many places the debasement of services, the decline of staff, and the absence of sustained citizen engagement are so advanced that it is difficult to see how these may be reversed.”21 Nor did the courts offer solace. In 2002, The Lost Children of Wilder recounted the multigenerational failure of New  York’s child welfare programs and the failure of the courts to provide redress.22 Subsequently, Children’s Rights was founded, and it pursued suits against state child welfare agencies; by 2015, 16 of the agencies were operating under federal court supervision. On rare occasions, a metric of child welfare agency culpability was revealed by court decrees announcing financial settlements, such as a 2011 payment of $4.9 million to a California mother accused of bad parenting by social workers who lied in court, and a $2.8 million settlement for the survivors of a Washington, DC, family after CPS workers failed on multiple occasions to investigate a mother who murdered her children.23 In 2017, a Texas couple, who had provided childcare, were released after spending 21  years in prison on phony satanic abuse charges; they were awarded a settlement of $3.4 million.24 Despite such settlements, as a result of provisions ensuring client confidentiality and court nondisclosure decrees, there has never been an accounting of court settlements to parties injured by child welfare malfeasance, despite the likelihood that the magnitude of payments could have financed the upgrading of children’s services immeasurably.

JANE CROW

Inept management and capricious interventions further compromised child welfare. Under threat of job loss, CPS workers tended to respond to a child fatality by redoubling efforts to remove at-​risk children from their homes and place them in foster care, a “foster care panic,” despite objective

[ 42 ] Prelude

evidence that removal was unwarranted.25 The over-​ representation of families of color in child welfare resulted in the coinage of the term disproportionality, a de facto admission that child welfare workers discriminate on the basis of race and ethnicity, inducting minority families into a child welfare system that not only inflicts harm but also proves difficult to leave.26 Eventually, a critique of child welfare programs emerged, alleging that “helping professions” had empowered themselves through professional organizations and unions, licensing, and the civil service at the expense of the well-​being of low-​income minority communities.27 Periodically, New  York City’s Administration for Children’s Services (ACS) illustrated what was wrong with child welfare. The proximate deaths of 6-​year-​old28 and 3-​year-​old boys in late 2016 resulted in two collateral events. First, the head of ACS resigned. Second, child welfare workers redoubled efforts to place children in foster care in order to avoid the prospects of additional child deaths, and foster care placements increased 40% in early 2017. But, the ensuing foster care panic had an unanticipated consequence: the removal of children for apparently frivolous reasons. When a 5-​year-​old girl was found walking to her grandmother’s house, police called ACS, and the girl was promptly placed in foster care, even though the girl’s mother appeared to be a more-​than-​adequate parent. In another instance, the pregnant mother of a 6-​year-​old girl went into premature labor, but, having been unsuccessful in contacting her partner, left the girl at home while she went to his work site. By the time she returned, her apartment was swarming with police and ACS workers, who placed the daughter in foster care and called an ambulance to transport the mother to the hospital, where she gave birth while shackled to the bed. Her newborn was promptly placed in foster care as well. In another episode, after the mother of a 7-​year-​old called the child’s father to buy the child formula, she left the child in her apartment to meet him, but she was intercepted by the police, who arrested the woman for smoking marijuana and learned that the child had been left unattended. ACS placed the child in the care of the father for six months and forbade mother to contact her. These events led New York Times reporters to label the targeting of poor African American mothers “Jane Crow,” reprising the practice in the South of denying civil rights to black men after Reconstruction.29 While ACS workers were occupied with removing children from parents for questionable reasons, the child fatality rate jumped. By the end of 2016, 47 children from families reported to ACS had died.30 Caprice on the part of child protection caseworkers adversely affected black families. Investigative journalists concluded, “Nationally, black children are roughly twice as likely as white children to enter foster care, and

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[ 43 ]

4

in New York and Illinois, more than four times as likely,” and, “Research reveals racial disparities at every step, from the number of calls to the child welfare hotline to the number of investigations and court findings of neglect.”31 Thus, the implication of “disproportionality,” which evolved to explain away institutional racism in children’s services, had real consequences for real parents. Rather than helping struggling families, child welfare workers often became complicit in their destruction. Concern about overzealous child welfare workers led to the formation of advocacy organizations, such as the Bronx Defenders, which provided legal advocacy for families against child welfare agencies.32 By 2016, Bronx Defenders’ 300 staff were litigating thirty thousand cases a year. Child welfare was a primary concern because incarcerated mothers stood a good chance of losing custody of their children to the state. “Children with incarcerated mothers are five times more likely to end up in foster care than those with incarcerated fathers are; once they enter the foster system, the state can terminate parental rights in less than two years.”33 Poor minority parents were arrested for “parenting while black,”34 while middle-​ class white parents who adhered to a “free range” parenting philosophy were accused of neglect for permitting their children to navigate by themselves outdoors.35 After such cases went viral on social media, questions were raised about the probity of CPS. The disarray of child welfare has frustrated foundations, such as the Annie E.  Casey Foundation, and advocacy organizations, including the Child Welfare League of America and the Children’s Defense Fund, which have labored for decades to advance the well-​being of at-​risk children; yet, as a professional practice, the field has been resistant to reform. In an evidence-​based environment, child welfare educators and their training programs are culpable, due to their failure to mount rigorous studies, as five leading authorities admitted in what represents an indictment of a field engaged with troubled families for over a century:  “There is not a single intervention that has generated a published peer-​review article based on a study in which they accepted referrals from a child welfare agency, randomly assigned them to a treated condition, and evaluated the outcome.”36

FISCAL FOLLIES

From an inaugural budget of $24.75 million in 1936, federal appropriations for child welfare had increased to $8.9 billion in 2016; yet the accounting has become byzantine. Subsections of Title IV evolved disparately, with four under Parts B and E, and five additional programs, independent of

[ 44 ] Prelude

Title XX, noted above. The most recent federal funding calculations, shown in Table 2.1, fail to capture the intricacy of child welfare finance, which varies with each program. Part E, the open-​ended entitlement for foster care, represents the lion’s share of federal funding. Payments for foster care are at the state’s Medicaid rate, while placement services for foster care are at 50%, and training for foster care workers is at 75%. Similarly, adoption assistance payments under Part E are at the state Medicaid rate, with placement services at 50% and training at 75%. Yet, payments for independent living for children aging out of foster care are at 80%, but subject to a spending cap.37 The smaller Part B supports generic child welfare services as well as Promoting Safe and Stable Families, a family preservation initiative, at 75% with a funding ceiling. Note that some programs, such as the 2008 kinship care initiative and the abandoned infant program, were zeroed out by 2016. Intricacies in program finance place a premium on fungible knowledge; indeed, the savvy child welfare director will have an algorithm in place to exploit permutations in federal funding. Yet, federal funding betrays biases as well. Foremost has been funding that favors out-​of-​home placement of maltreated children over family preservation, by a factor approaching 20. This issue has been long-​standing, leading child welfare authorities to observe:  “Given the well-​ known problems associated with foster care, in combination with the abuse or neglect itself, it is little wonder that these children have an elevated incidence of poor school achievement, school dropout, mental health problems, arrests, teen pregnancies, and other afflictions.”38 Despite the incidence of child abuse after a child is placed in foster care, 0.27% in 2014,39 federal funding has provided a powerful incentive for states to take children from their parents and place them in congregate care or with foster families. Aside from significantly less funding for prevention, in this case family preservation, federal child welfare had neglected funding Indian tribes directly until the 2008 Fostering Connections and Increasing Adoptions Act. A fundamental problem with public child welfare has been state reporting, or more accurately, its wild oscillations. The Adoption and Foster Care Analysis and Reporting System (AFCARS), for example, collects data by state on the number of children entering and leaving foster care as well as children placed for adoption. State reports reveal abrupt changes that beg explanation: between 2011 and 2015, the time lag between children’s being available for adoption and being adopted dropped in Hawaii 134%, while the time increased in Utah 910%. Inexplicably, Pennsylvania failed to report at all. AFCARS also tabulates the child fatality rate per 100,000 children, which varied from zero in Rhode Island to five in Arkansas; however,

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[ 45 ]

Table 2.1.   CHILD WELFARE PROGRAM FUNDING a BY FISCAL YEAR Program

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

Total

$7,696

$7,578

$5,390

$8,279

$8,689

$730

$688

$689

$664

$668

$281

$262

$269

$269

$269

$408

$387

$380

$380

$381

$26

$24

$25

$16

$18

Title IV-​B of the Social Security Act Stephanie Tubbs Jones Child Welfare Services (CWS) Promoting Safe and Stable Families (PSSF; total mandatory and discretionary funds, all activities) Child Welfare research, training, and demonstration Family connection grants Title IV-​E of the Social

$15

$14

$15

$0

$0

$6,777

$6,710

$7,510

$7,424

$7,833

$6,550

$6,487

$7,286

$7,200

$7,609

$3

$3

$3

$3

$3

$185

$182

$183

$183

$183

$39

$37

$38

$38

$38

$188

$180

$192

$190

$188

$94

$88

$94

$94

$98

Security Act Title IV-​E foster care, adoption, and guardianship (total for all three components with open-​ended funding) Title IV-​E plan development and technical assistance Chafee Foster Care Independence Program (CFCIP; total: basic program and education and training vouchers) Adoption and legal guardianship incentive payments Other Programs Child Abuse Prevention and Treatment Act (CAPTA; total: state grants, discretionary activities, and community-​based grants to prevent child abuse and neglect)

[ 46 ] Prelude

Table 2.1.  CONTINUED Program Children’s Justice Act

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

$20

$20

$20

$20

$20

Adoption opportunities

$39

$37

$41

$39

$39

Abandoned infants

$12

$11

$11

$11

$0

$24

$25

$27

$27

$31

grants

assistance Victims of Child Abuse Act (VCAA; total for children’s advocacy centers, court-​appointed special advocates, and child abuse training for judicial personnel) Nominal dollars in millions; parts may not sum to total due to rounding. Note. Adapted from Thyer, B. (2015). A bibliography of randomized controlled experiments in social work (1949–​2013). Research on Social Work Practice, 25(7). a

three states—​North Carolina, Maine, and Massachusetts—​failed to report.40 Such discrepancies and omissions raise questions about the probity of child welfare reporting as well as state performance. What emerges for a critical examination of child welfare is compromised practice subsidized by a not inconsiderable amount of federal funds. Due to incomplete data collection, which has had little independent corroboration, outcomes for maltreated children and their troubled families are ambiguous at best. In the worst cases, children are harmed or killed after state intervention. Of the 4.1 million reports of child abuse and neglect in 2016, 1,750 children died from maltreatment.41 Some 28 jurisdictions have received waivers to mount demonstration approaches to improve services to at-​risk children,42 but few involve formal experiments.

THREE EXPERIMENTS

Contrary to the suspect performance of child welfare, a product of inferior professional practice, condoned by university training programs, embedded in government bureaucracy, and sustained by uncoordinated entitlement funding, an evidence-​based program movement has emerged. At its onset in the early 1960s, field experiments took root, but these small efforts were isolated from the organizational mainstream and were little noticed. Yet, as their longer-​term benefits became evident, policymakers

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came to appreciate their larger promise for children’s services. Functioning through bureaucratic inertia, the child welfare juggernaut cuised along, paying little attention. While public child welfare faltered, preschool education for poor children blossomed. In 1962, David Weikart (1931–​2003), director of special education in Ypsilanti, Michigan, designed a randomized controlled trial (RCT) to determine if an intensive preschool program would be of long-​ term benefit to 3-​and 4-​year-​old, primarily African American, children. Weikart hired four teachers, randomly assigned 123 students to test and control groups, and then monitored the effects of active learning on low-​ income children through cognitive assessment and demographic variables. Subsequently, Weikart and his wife established the High Scope Foundation to promote his active learning curriculum.43 A quarter-​century later, the students engaged in active learning fared better than those in the control group. Despite similar baseline characteristics, including socioeconomic status, welfare receipt, father’s status, number of siblings, birth order, and gender, the experimental group attained higher grade completion, reported fewer arrests, had higher wages, and were more likely to marry. At a cost of $7,252 per participant, individuals participating in active learning enjoyed benefits of $12,356, while social benefits from more productivity and family cohesion as well as less crime and welfare receipt totaled $88,433 per participant.44 In a statement foreshadowing the evidence-​based program movement, Weikart and a colleague observed, “Had it not been for the study’s experimental design, the program’s long-​term effect would not have been unambiguously detected.”45 Aware of Weikart’s work in Ypsilanti, David Olds had become disillusioned with the new Head Start program he was involved with in a poor African American neighborhood in West Baltimore. Olds, who had a degree from Johns Hopkins University, observed that the Head Start staff provided little more than babysitting for children; worse, they seemed indifferent to promoting the children’s cognitive development through curriculum innovation, such as active learning developed by Weikart. Concluding that home life was critical to a child’s development, Olds hypothesized that improving the parenting skills of low-​income mothers would benefit their children. Having moved to Ithaca, New York, Olds needed a project for his doctoral dissertation at Cornell University, so in the 1970s he designed an experiment in which nurses were assigned to visit first-​time mothers in Elmira, who were primarily white. The positive outcomes of his experiment motivated the Robert Wood Johnson Foundation to subsidize a replication

[ 48 ] Prelude

in Memphis in the 1980s among a largely African American population, and another in Denver in the 1990s with mostly Latina mothers. Across these experiments, the Nurse-​ Family Partnership (NFP) reported “significant positive impacts on the behavior and life course of the mothers and children,” although effects varied across groups and sites.46 Specifically, mothers assigned to NFP reported lower incidence of child maltreatment, reductions in the number of subsequent births, and improvement in cognitive and educational outcomes of their children.47 At a net program cost of $11,819, NFP returned benefits to participants of $8,905, to taxpayers of $3,027, and to others, $1,714, totaling $13,646.48 In 2010, the Maternal, Infant, and Early Childhood Home Visiting Program was established, providing $1.5 billion in funding over five years, with 75% reserved for programs validated in RCTs, with the remainder for promising interventions.49 In 1972, Craig Ramey, a psychologist, initiated the Abecedarian Project, randomly assigning 111 poor African American infants at age 2 months to a control group or an intervention that included intensive socialization and education, six to eight hours per day for five days per week. Infants participating in the project were high risk, to the extent that many had been labeled retarded. Children in the test group were evaluated at intervals up to age 30, revealing significant improvements compared to those in the control group: the test group surpassed the control group over one grade level in reading and math achievement, had increased enrollment in higher education, had a higher likelihood of having a skilled job, were less likely to receive welfare, showed less criminal conduct, and were less likely to be teen parents.50 The Abecedarian Project cost $13,900 per child annually; however, the benefits attained by increased productivity and costs avoided by teen pregnancy, welfare receipt, and criminal activity arguably far exceeded that. By comparison, the costs of the Abecedarian Project are similar to annual appropriations per pupil for a public school system.51 The positive outcomes of the Abecedarian Project provided an impetus for introducing Early Head Start, which emphasized maternal and child development from pregnancy through a child’s third birthday and which was promoted by the advocacy organization Zero to Three. Echoing Olds, Ramey underscored the importance of RCTs in evaluating child development interventions:  “Because assignment to treatment and control conditions was random, it is plausible to conclude that the early educational achievement was responsible for the benefits found.” He concluded, “Early failure among this [African American] population can be significantly reduced with an intensive preschool program.”52

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05

AMPLIFYING BANDWIDTH

The field experiments conducted by Weikart, Olds, and Ramey might have been consigned to the research archives as novel exercises in empiricism had not a series of complementary events propelled the research forward. In 1983, the Washington State legislature established the Washington State Institute for Public Policy (WSIPP), which was authorized to inventory evidence-​based programs that would benefit citizens of the state. Since then, WSIPP has systematically inventoried what has become arguably the largest archive of research on interventions in an array of fields, including juvenile justice, adult criminal justice, child welfare, pre-​K to 12 education, children’s mental health, healthcare, substance abuse, adult mental health, public health and prevention, workforce development, and higher education. In addition to program effects, WSIPP included cost–​benefit ratios for interventions. Among the programs reviewed were NFP and Abecedarian.53 Continuing advocacy for data-​driven programming, the Coalition for Evidence-​Based Policy was established in 2001; it was led by Jon Baron, with luminary advisors, including Ron Haskins, formerly of the House Ways and Means Committee and most recently the Brookings Institution, and Jonathan Crane, editor of Social Programs that Work, among others. Absorbed into the Laura and John Arnold Foundation in 2015, the Evidence-​Based Policy Initiative reviews RCTs for integrity, funds virtually all credible field experiments, and lists promising interventions on its “social programs that work” link.54 In 2003, the Abdul Latif Jameel Poverty Action Lab (J-​PAL) was established at MIT, cofounded by Abhijit Banerjee and Esther Duflo. Within a decade, J-​PAL had enlisted 146 professors from 49 countries to mount RCTs of programs benefiting the marginalized poor. In late 2017, J-​PAL invited applications for innovative approaches for state and local governments in the United States and subsequently reported on field experiments involving the Supplemental Nutrition Assistance Program, Medicaid, and the Earned Income Tax Credit. The Pew Charitable Trusts, in collaboration with the MacArthur Foundation, established the Results First Initiative. Under the direction of Sara Dubé, Results First encourages evidence-​based programming across an array of fields, including conservation, finance, governing, and health. Toward that end, Results First “created the Results First Clearinghouse Database to provide users with an easy way to access and understand the evidence base for programs in social policy areas such as behavioral health, criminal justice, education, and public health.”55 Results First also identified states adopting evidence-​based policies to optimize service to citizens.

[ 50 ] Prelude

On March 30, 2016, President Obama signed legislation establishing the Commission on Evidence-​based Policymaking (CEP), a bipartisan effort to promote policy based on data. Co-​chaired by Ron Haskins of the Brookings Institution, who was a veteran of policy reforms in children’s services as well as public assistance, CEP’s 15-​person panel published its final report in late 2017. Although the report was primarily concerned with privacy and security concerns, given the federal government’s extensive data-​collection capability, it also encouraged RCTs as an optimal method of program assessment: “When seeking to determine program impacts, random assignment generally is preferable for developing causal statements.”56 In 2018, the Evidence-​based Policymaking Act was signed into law, requiring federal agencies to make rigorous research a condition for federal funding. Finally, using “big data” from federal agencies, Raj Chetty of Stanford and colleagues from Harvard and Brown Universities founded Opportunity Insights to better inform the public about how changes in education, income, and location affect the prosperity of different groups. For example, Chetty, a MacArthur Foundation “genius grant” recipient, and colleagues documented the plunge in earnings of children compared to their parents—​children’s earnings were above 90% of their parents’ earnings in 1940 and were only 50% of their parents’ earnings in 1980, a striking drop in only one generation.57 Through the Opportunity Atlas, researchers identify cities, such as Salt Lake City, where low-​income children experience more upward mobility than children in Baltimore or Charlotte.58 Opportunity Insights researchers have also clarified the impact of race on upward mobility, concluding that, while Asian Americans and Hispanics are approaching whites’ socioeconomic status, African Americans and Native Americans continue to fall behind. Furthermore, African American males still earn less than their white counterparts even when they come from families of comparable income.59 Significantly for an economist, Chetty has transcended the opaque quantitative genre of academic journals to publish in mainstream media, such as The New  York Times, to inform the public about various forms of inequality.60

CODA

Children’s services in America originated during the Progressive Era and prompted reformers to put pragmatism to public benefit through foundations that established universities and supported charitable causes, culminating in the creation of the Children’s Bureau. With the establishment of the American welfare state, the progressive sensibility

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[ 51 ]

25

continued in Title IV of the Social Security Act, which authorized billions of dollars for child welfare. Yet, Julia Lathrop’s admonition to use statistics to craft local responses for destitute mothers and their children seems to have been lost in the transition. Since 1935, public child welfare, not unlike its sister institution public education, has relied on an intuitive understanding of what children need as well as how to respond to at-​risk children. Certainly, this may be justified in terms of the safety of children subject to abuse and neglect; however, child welfare professionals not only failed to produce evidence-​based interventions, but also oversaw financing that encouraged their removal from their families. Eventually, the child welfare remit became compromised as children under supervision of the state were injured or died, while child welfare workers pursued bogus and frivolous concerns. Yet, in the midst of the questionable performance of public child welfare, professionals committed to child development mounted a series of experiments that yielded important evidence, charting a path for children’s services. These outcomes, constructive as well as cost-​effective, became the primary factors leading decision-​ makers to endorse the evidence-​ based policy movement. Why, they wondered, should the public subsidize interventions that are not only inefficient, but also harm children? With the advent of big data, the evidence subsequently demonstrated how wider social circumstances affected poor minority children, complementing earlier field experiments. Vast sums apparently misspent attracted the interest of economists, who proposed more prudent, long-​term investments in children. Despite advances in research in children’s services, public child welfare has been obdurately resistant to reform. Ron Haskins, co-​director of the Center on Children and Families at the Brookings Institution, has studied child welfare for decades. In the absence of rigorous evidence in children’s services, he is not optimistic about the prospects of vulnerable children. You look at the studies and I  wouldn’t want to put anybody’s kid in these programs. So that’s a big question—​how come? If we’re going to have a set of programs that we offer to social workers, we’ve got to have a range of programs for them that are effective and that we can show actually produce outcomes, but we don’t have that. That’s one of the most fundamental deficits of the system.

Social work has been central to social services in general and to child welfare in particular. Many undergraduate students with BSWs

[ 52 ] Prelude

return to MSW programs, with reentry encouraged by the accrediting organization’s insistence that the undergraduate degree is equivalent to the first year of graduate study, which can amount to as much as a 50% discount depending on the graduate program. Regardless, BSWs seeking MSWs represent weak candidates for graduate studies. Among students taking the Graduate Record Exam (GRE) for 2014–​2017, social work applicants scored consistently on the bottom in verbal reasoning as well as analytical writing. With respect to the third component of the GRE, quantitative reasoning, applicants to graduate social work programs score dead last among all disciplines.61 Thus, the negligible mathematic skills of social work students are a primary culprit in explaining the poor performance of social services and child welfare with regard to both basic and rigorous research methods. While social work students may become adept at qualitative investigations, the prospect of their developing the skills necessary for RCTs is remote, indeed. Little wonder, then, that child welfare workers with social work credentials are so averse to, if not phobic about, research. Bruce Thyer, a research professor at Florida State University and editor of three research journals, posits explanations for social work’s reedy commitment to empiricism. Among the field’s deficiencies are not only the handful of university departments conducting RCTs, but also the failure to incorporate field experiments in research courses. Although schools of social work must offer a sequence of research courses for students, the courses are watered down, insofar as graduate students, for example, are expected to be “research informed” as opposed to “research proficient.” In other words, absent the requirement that graduate students have a research thesis as an option, let  alone a requirement, few graduate students conduct a formal study prior to graduation. As a requirement for accreditation by the Council on Social Work Education, schools of social work must offer courses for students pursuing a specialization; however, the vast majority pursue clinical practice, leaving social administration decidedly secondary. For those pursuing studies in social administration, program efficacy and efficiency get short shrift. With respect to the likelihood that social work faculty will develop metrics on social program performance, Thyer is not optimistic: “Not to my knowledge, any more than they’ve developed metrics of efficacy and efficiency for the clinical track. We tend to avoid that like the plague because it holds us to accountability in the sense that a lot of what we do isn’t very useful, and if we have metrics documenting that, that will hold it up for everyone to see.”

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45

Reflecting on attempts to convince faculty to pursue rigorous research in social work, Thyer concludes that the field is averse to refining empirical methods. I’ve long thought that . . . a social work student, as a condition of graduation, should demonstrate that they’ve helped at least one person, but when I present that at a faculty meeting, I’m met with laughter and grins. If you go to dental school, they have a list of things that you have to demonstrate that you’ve successfully done. Same thing with medical school; you have to have done so many things under supervision successfully. We have no metric like that in social work.

Nor are there efforts to advance rigorous research in social work. In response to the 2018 Evidence-​based Policymaking Act, which mandates that federal agencies develop evidence plans and prioritize activities by designating an evaluation officer, Thyer anticipates little interest by social work leaders: “Absolutely not, no, not at all. That would be at such a high level, I can’t see it penetrating much into the classroom, internship, or what [social work graduates] do in practice once they’ve graduated.” In pursuit of documentation that social workers have been engaged in RCTs, despite academic disinterest, Thyer published an article counting 740 RCTs since World War II in which social workers were co-​authors.62 “It took me three years to pull the article on social workers involved in RCTs. By now there are probably 1,000 articles authored or co-​authored by social workers. The problem is that we tend to publish in a wide variety of journals that are not social work.” Nor is Thyer sanguine that invitations from Arnold Ventures or J-​PAL are likely to jump-​start social work’s interest in RCTs. Ninety-​nine percent of social work faculty would be unaware of these two initiatives. In part, the low uptake of developments from rigorous research is being unaware of major initiatives, such as the [Evidence-​based Policymaking Act] or the work of Jon Baron [of Arnold Ventures]. Another is that once one is an established faculty member, there’s almost a lack of interest in—​almost a resistance—​to learning about new things and new developments.

As a result, curricular innovations, such as J-​PAL’s MicroMasters program, are unlikely to catalyze more rigorous research in social work education. Thyer says, “I think [the MicroMasters] is a fabulous idea, but I think most of the uptake will be outside the field of social work. I can’t see faculty or graduate students flocking to this type of program. If we get overtaken in

[ 54 ] Prelude

that area, it’s sort of a Darwinian process.” Thyer reflects on social work’s origins, another opportunity lost. I would regret that happening, but it’s like family home visiting. We used to be at the forefront of that type of service delivery, but it’s been overtaken by nurses because they’ve been successful at conducting RCTs demonstrating that home visits by nurses really do have a protective effect with kids. We’ve not done that, so now we’re not very visible in that domain anymore.

Reflecting the failure to apply rigorous research in child welfare, social work also avoided tens of millions of dollars in research on waivers granted states during the latter decades of the 20th century. Federal waivers sought by states to reform welfare required RCTs to demonstrate efficacy, which states eagerly pursued, generating a vast research library in the process. Because most of the subjects of welfare reform were poor children, since they represented the majority of welfare beneficiaries, a colossal irony emerged: vast sums were allocated to ascertain the outcomes of welfare-​to-​ work regimes for welfare mothers, but funding of experiments to benefit poor children remained small by comparison. And social work, historically committed to family poverty and child welfare, was having none of it. NOTES 1. http://​ssrc-​static.s3.amazonaws.com/​wp-​content/​uploads/​2015/​10/​06173658/​ 2015_​Opportunity_​Index_​Report.pdf 2. Charles Loring Brace, The Dangerous Classes of New York & Twenty Years Work Among Them (New York: Wynkoop & Hallenbeck, 1872), pp. 152–​53. 3. Jane Addams, Twenty Years at Hull House (Cutchogue, NY: Bucaneer Books, 1994), pp. 99–​100. 4. S. Josephine Baker, Fighting for Life (New York: New York Review of Books, 1939), p. 128. 5. Baker, Fighting for Life, pp. 111–​14. 6. Quoted in Theda Skocpol, Protecting Soldiers and Mothers (Cambridge, MA: Harvard University Press, 1992), p. 488. 7. https://​socialwelfare.library.vcu.edu/​programs/​mothers-​aid/​ 8. Linda Gordon, Pitied But Not Entitled (Cambridge, MA: Harvard University Press, 1994), p. 45. 9. Michael Katz, In the Shadow of the Poorhouse (New York: Basic Books, 1986), p. 129. 10. Frances Fox Piven and Richard Cloward, Regulating the Poor (New York: Vintage, 1971). 11. Jill Quadagno, The Color of Welfare (New York: Oxford University Press, 1994), p. 119.

W e d n e s day ’ s C h i l dr e n  

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65

12. John Hope Franklin, From Slavery to Freedom (New York: Knopf, 1980), pp. 288–​89. 13. Ira Katznelson, Fear Itself (New York: Liveright, 2013). 14. Gordon, Pitied But Not Entitled, p. 105. 15. https://​www.ssa.gov/​history/​35act.html#TITLE%20IV 16. Gordon, Pitied But Not Entitled, p. 104. 17. House Ways and Means Committee, Overview of Entitlement Programs (Washington, DC: U.S. GPO, 2000), p. 633. 18. Maggie Jones, “Who was Abused?” New York Times, September 19, 2004. 19. Lawrence Wright, Remembering Satan (New York: Knopf, 1994. 20. Lela Costin, Howard Karger, and David Stoesz, The Politics of Child Abuse in America (New York: Oxford University Press, 1996) pp. 21–​3. 21. Alvin Schorr, “The Bleak Prospect for Public Child Welfare,” Social Services Review (March 2000), 124. 22. Nina Bernstein, The Lost Children of Wilder (New York: Vintage, 2002). 23. Recounted in “A Cartel Theory of Child Welfare,” in David Stoesz, ed., Pandora’s Dilemma (New York: Oxford University Press, 2018). 24. Avi Selk, “Falsely Accused of Satanic Horrors, a Couple Spent 21 Years in Prison. Now They’re Owed Millions,” Washington Post, August 25, 2017. 25. https://​www.nccprblog.org/​2018/​07/​paying-​price-​of-​foster-​care-​panic-​in.html 26. https://​www.childwelfare.gov/​topics/​systemwide/​cultural/​disproportionality/​ 27. John McKnight, The Careless Society (New York: Basic Books, 1995, p. 30. 28. Ashley Southall, “Death of 6-​Year Old Boy in Harlem Raises Questions for Child Welfare Agency,” New York Times, September 28, 2016. 29. Stephanie Clifford and Jessica Silver-​Greenberg, “Foster Care as Punishment: The New Reality of ‘Jane Crow,’” New York Times, July 21, 2017. 30. Ashley Southall, “Brooklyn Toddler Injured in Case of Suspected Child Abuse has Died,” New York Times, December 5, 2016. 31. Rebecca Klein and Caroline Preston, “When Schools use Child Protective Services as a Weapon Against Parents,” The Hechinger Report, November 17, 2018. 32. https://​www.bronxdefenders.org/​who-​we-​are/​ 33. https://​www.newyorker.com/​magazine/​2018/​11/​05/​ americas-​other-​family-​separation-​crisis 34. https://​www.thenation.com/​article/​has-​child-​protective-​services-​gone-​too-​far/​ 35. https://​abcnews.go.com/​Lifestyle/​free-​range-​parents-​found-​responsible-​child-​ neglect-​allowing/​story?id=29363859 36. Fred Wulczyn, Richard Barth, Ying-​Ying Yuan, Brenda Harden, and John Landsverk, Beyond Common Sense (New Brunswick, NJ: Transaction, 2005), p. 155. 37. House Ways and Means Committee, Overview of Entitlement Programs (Washington, DC: U.S. GPO, 2004), p. 647. 38. Ron Haskins, Fred Wulczyn, and Mary Webb, “Using High Quality Research to Improve Child Protection Practice,” in Ron Haskins, Fred Wulczyn, and Mary Webb, eds., Child Protection (Washington, DC: Brookings Institution, 2007), p. 1. 39. https://​www.acf.hhs.gov/​sites/​default/​files/​cb/​cwo10_​14.pdf 40. https://​www.acf.hhs.gov/​sites/​default/​files/​cb/​cwo2015.pdf#page=12 41. https://​americanspcc.org/​child-​abuse-​statistics/​ 42. Stoltzfus, pp. 48–​9: https://​fas.org/​sgp/​crs/​misc/​R43458.pdf 43. https://​en.wikipedia.org/​wiki/​David_​P._​Weikart

[ 56 ] Prelude

44. Lawrence Schweinhart and David Weiker, “High/​Scope Perry Preschool Program Effects at Age Twenty-​Seven,” in Jonathan Crane, ed., Social Programs That Work (New York: Russell Sage Foundation, 1998), pp. 148–​62. 45. Schweinhart and Weikert, p. 159. 46. Ron Haskins and Greg Margolis, Show Me the Evidence (Washington, DC: Brookings Institution, 2015), p. 32. 47. https://​evidencebasedprograms.org/​programs/​nurse-​family-​partnership/​ 48. http://​www.wsipp.wa.gov/​BenefitCost/​Program/​35 49. Haskins and Margolis, p. 33. 50. https://​en.wikipedia.org/​wiki/​Abecedarian_​Early_​Intervention_​Project 51. Craig Ramey, Frances Campbell, and Clancy Blair, “Enhancing the Life Course for High-​Risk Children: Results from the Abecedarian Project,” in Jonathan Crane, ed., Social Programs That Work (New York: Russell Sage Foundation, 1998), p. 179. 52. Ramey et al, p. 173. 53. http://​www.wsipp.wa.gov/​ 54. https://​evidencebasedprograms.org/​ 55. https://​www.pewtrusts.org/​en/​research-​and-​analysis/​data-​visualizations/​2015/​ results-​first-​clearinghouse-​database 56. https://​www.cep.gov/​content/​dam/​cep/​report/​cep-​final-​report.pdf 57. https://​opportunityinsights.org/​national_​trends/​ 58. https://​opportunityinsights.org/​neighborhoods/​ 59. https://​opportunityinsights.org/​race/​ 60. https://​www.nytimes.com/​2016/​12/​08/​opinion/​the-​american-​dream-​ quantified-​at-​last.html 61. https://​www.ets.org/​s/​gre/​pdf/​gre_​guide.pdf 62. Bruce Thyer, “A Bibliography of Randomized Controlled Experiments in Social Work (1949–​2013),” Research on Social Work Practice, 2015, vol. 25, no. 7.

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CHAPTER 3

Poor Policy

J

ust as the 1960s and the War on Poverty set the stage for amplification of the American welfare state, so the 1970s not only consolidated public assistance programs, but also foreshadowed retrenchment in the 1990s. Daniel Patrick Moynihan provided continuity, serving as an advisor to Richard Nixon, proposing alternatives to welfare, and subsequently parting company with Bill Clinton on the eve of welfare reform in 1996. During the latter decades of the 20th century, an inelegant pas de deux of policy and ideology reflected morphing identities, as nominally liberal Democrats became neoliberals and ostensibly conservative Republicans became neoconservatives. In the cross-​currents of politics and ideology, public welfare served as a crucible for changes in public perceptions about how to aid the neediest Americans.

NEOLIBERALISM

No sooner had LBJ launched the War on Poverty than a handful of liberal intellectuals expressed reservations about the entire enterprise. Conservatives had been staunchly opposed to welfare, of course, often racializing public assistance programs, but the defection of liberals was an altogether different matter. In 1965, Moynihan, a Labor Department analyst with a sterling academic pedigree, prepared a confidential memo containing a provocative thesis:  as public assistance for poor minority families increased, so did the number of fatherless families who became dependent on the Aid to Families with Dependent Children (AFDC) program.1 The “Moynihan report,” soon leaked to the press, unmasked a heretic in Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

the midst of a Democratic administration keen to curry the favor of the African American community. Community Action Programs, a key provision of the War on Poverty, which assured residents of poor communities “maximum feasible participation,” interpreted as comprising one third of advisory board membership, also attracted Moynihan’s ire, evident in his caustic analysis, Maximum Feasible Misunderstanding.2 Moynihan was not alone in his skepticism about LBJ’s welfare expansion. Theodore Lowi, a Cornell University professor, also expressed apprehensions, differentiating the “old welfare,” which served a working-​ poor proletariat, with the “new welfare,” which was an expression of “interest group liberalism.”3 While social insurance benefited the working poor, rewarding work, public assistance subverted the work ethic, essentially validating poverty as a social problem. Whereas old welfare provided benefits for those randomly harmed by capitalism, new welfare reorganized the relationship between government and the destitute, with the poor forming into a constituency that extorted benefits from government in exchange for political support. Not long thereafter, sociologist James Coleman joined the liberal apostates. Coleman had presented an exhaustive report in 1966 on segregated education among minority groups, raising questions among liberals when he reported that the IQs of blacks were lower than those of other groups. In 1975, a study under Coleman’s direction on school busing inflamed liberals by questioning the value of busing to achieve educational equality, and the study was seen as effectively reneging on his earlier commitment to desegregating schools.4 Edward Banfield, a former New Deal official, became a more ardent critic of welfare programs. Having conducted research in a poor Italian village, Banfield subscribed to the “culture of poverty” thesis, holding that cultural practices explained poverty, making interventions futile. In 1970, Banfield published The Unheavenly City, which included an inflammatory chapter on the rioting that had become common during the 1960s.5 Thus, the first generation of welfare critics did not represent a cadre of conservative apparatchiks, but well-​pedigreed liberals teaching at prestigious institutions, such as Harvard and the University of Chicago. Later, conservative intellectuals associated with think tanks would receive acclaim for condemning welfare for unintended consequences. But, in the mid-​ 1970s, academics were at the forefront, and they were roundly castigated for questioning liberal intentions about social welfare. Having been appointed Nixon’s policy advisor, Moynihan urged the president to pursue a radical version of welfare reform: a guaranteed annual income to replace AFDC. Enthusiastic about a signature domestic

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reform, Nixon symbolically placed the Family Assistance Plan (FAP) at the top of his agenda, H.R. 1.  Despite presidential support, Senators balked at what was considered a generous benefit, $1,600/​year with an income disregard of $720.6 Russell Long (D-​L A), Chair of the Senate Finance Committee, took to the floor to denounce FAP as rewarding parents for “illegitimacy and desertion,” citing Moynihan’s data from the 1965 report.7 As had Moynihan, Long associated welfare with family disorganization in the African American community. But the conservative case that FAP was too generous was countered by liberals’ insisting benefits were too meager. Wearying of Congressional wrangling, Nixon capitulated, which resulted in two less radical innovations: the consolidation of Aid to the Blind, Aid to the Disabled, and Old Age Assistance into Supplemental Security Income, and the creation of a tax credit for families of low-​income workers, the Earned Income Tax Credit. As prospective policy reform, discussions about a guaranteed annual income catalyzed a set of field experiments on augmenting wages of randomly selected low-​income households, beginning in New Jersey, and later including Iowa, North Carolina, Indiana, Colorado, and one Canadian province. Wage supplements varied with family characteristics to determine the consequences of a guaranteed annual income. The New Jersey results supported FAP; as one researcher recounted, “The experiment had so far produced no evidence of work disincentive; [it had] low administrative cost; [there was] no impact on family stability; and, based on attitude surveys, [the results served as] a ringing endorsement for poor people’s motivation to work.”8 Yet, the prospect of government-​funded research for public subsidies to low-​income workers rankled conservatives, who contended that the entire project reeked of socialism. Running from 1968 to 1972, the experiments found that workers reduced their work effort about two to four weeks annually, sufficient for critics to argue that an income guarantee subverted the work ethic. Among the programs introduced by the War on Poverty was the Legal Services Corporation, a corps of lawyers willing to serve the indigent. Because public assistance programs, such as AFDC, were managed by states, legal aid attorneys had to become versed in state regulations in order to mount legal challenges against policies that thwarted access to benefits. Little acknowledged in welfare histories, legal services for the poor were essential for reversing punitive regulations that states had enacted to suppress eligibility, such as man-​in-​the-​house rules and residency requirements.9 Subsequently, a series of class action suits, upheld by the Supreme Court, loosed an avalanche of applications that states were suddenly obliged to award; for example, the AFDC caseload increased

[ 60 ] Prelude

over 20% from 1989 to 1994. In response, states officials allowed grant amounts to lose value to inflation. By the eve of welfare reform, state welfare benefits remained miserly, indeed. For a family of three, in 1996, the maximum AFDC award in Mississippi was $120 per month, in Alabama $164, and in West Virginia $253.10 Such low benefits virtually required mothers to obtain income that would not be reported to authorities for fear of termination of benefits. The deceit by welfare mothers was not unknown to policy analysts. In 1992, Christopher Jencks had concluded that ideological diktat about poverty doomed efforts to reform welfare, “Low benefits have another more sinister effect that neither conservatives nor liberals like to acknowledge,” he observed, “they force most welfare recipients to lie and cheat in order to survive.”11 In the introduction to his seminal book on welfare, Making Ends Meet, Jencks observed, “Secretiveness [about unreported income] is especially common among welfare recipients, almost all of whom have non-​ welfare income that they conceal from the welfare department.”12 In one of the rare studies of welfare family expenditures, Kathryn Edin and a colleague convinced AFDC recipients living in Chicago, Boston, Charleston (South Carolina), and San Antonio to reveal their family finances. At the time, the grant for a family of three was $377 per month in Illinois, $579 in Boston, $201 in South Carolina, and $188 in San Antonio, all amounts insufficient for mothers to care for their children. In violation of federal law, mothers augmented their AFDC grants with unreported income: “two-​fifths (39 percent) worked off the books or under a false identity to generate additional income, and 8 percent worked in the underground economy selling sex, drugs, or stolen goods.”13 Only one mother in the sample survived on the AFDC grant alone, but with serious consequences: “Since her child frequently went hungry, had only one change of clothes, and often missed school because he lacked adequate winter clothing, several of the woman’s neighbors (whom we interviewed) had reported her to child protective services for neglect.”14 The implicit corruption of AFDC, an entitlement for poor families but at such low benefit levels that parents were prompted to cheat, complemented a steady drumbeat by conservatives alleging that welfare exacerbated asocial conduct on the part of the poor.After the election of Ronald Reagan, conservative think tanks sponsored and hosted scholars intent on ascribing the cause of poverty to the poor themselves. George Gilder proclaimed that the poor required not more government aid, but “the spur of their own poverty.”15 Charles Murray echoed that refrain, suggesting that all benefits for working-​age recipients be simply terminated.16 Then, Lawrence Mead proposed that welfare benefits be

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conditional on prosocial conduct, such as adult employment, children’s school attendance, and avoidance of criminal behavior.17 Normative conduct thus became a trope for the right, as detailed by Michael Novak of the American Enterprise Institute: “The probability of remaining involuntarily in poverty is remarkably low for those who: • Complete high school • Once an adult, get married and stay married, if not on the first try • Stay employed even if at a wage and under conditions below their ultimate aims.”18 As “behavioral poverty” gained momentum in conservative circles, the new Reagan Administration announced its interest in granting waivers to states interested in developing alternatives to AFDC. Under Section 1115 of the Social Security Act, waivers could be granted under two conditions: first, the alternative must not cost more than public appropriations for AFDC; second, the substitute program must be subject to rigorous evaluation. Federal agencies, keen to optimize waivers, were concerned that states would game the process, interpreting loosened regulations as an opportunity to capture more government revenues with no corresponding increase in performance. Thus, federal officials gradually changed the waiver approval standard to one that focused primarily on holding the federal cost-​initiated reform initiatives no higher than a ceiling—​which they eventually decided to enforce by requiring inclusion of random assignment evaluation, using the control group experience to establish the cost cap.19

States with Republican governors, such as Tommy Thompson in Wisconsin, leapt at the chance, but even a few Democratic governors did as well, notably Bill Clinton of Arkansas. As welfare waivers proliferated, so did the private firms competing for evaluation contracts, such as Manpower Demonstration Research Corporation (now MDRC), Mathematica Policy Research, and Abt Associates. Ironically, the nation’s universities opted not to pursue research on welfare reform, despite the tens of millions of dollars allocated for field experiments. Concurrently, the Reagan Administration flexed its policy muscle by enacting the Family Support Act (FSA) of 1988, introducing the first regimen of behavioral poverty with respect to AFDC, primarily through the Job Opportunity and Basic Skills program, designed to reduce welfare dependency. But FSA granted so many exemptions to mothers, such as

[ 62 ] Prelude

having an infant or attending a training program, that it had a negligible effect on welfare rolls. Ultimately, about half of the AFDC caseload would be deemed exempt.20

THE LOGIC OF WELFARE REFORM

State welfare waivers introduced the largest field experiments ever undertaken in the United States. By the mid-​1990s, some 40 states had received waivers to deploy alternatives to AFDC, which were allowed to continue under the 1996 welfare reform law; in effect, by the time the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) passed, AFDC was defunct in most of America. The welfare waiver studies constituted a library of evaluation research that was unprecedented; however, there was an important qualification: “The poverty research industry had developed a dependency problem of its own: a capacity, that is, to conform and respond to the shifting political agendas it relied on for funding, but not to establish and gain support for an independent policy for dealing with poverty at its roots.”21 In this regard, welfare waiver evaluations tended to be attentive to state objectives in cutting welfare payments by placing welfare mothers in jobs, regardless of wages earned. The “work first” strategy raised the specter of shifting poor mothers from the ranks of the welfare poor to the working poor, gaining employment but earning income inadequate to sustain their families. This issue became evident in a synopsis of welfare-​to-​work studies that had been conducted by the Manpower Research Demonstration Corporation, now known as MDRC (see Table 3.1). Any field experiment exists in a milieu of unexpected obstacles, shifting currents, and unintended consequences, all evident in these studies. Three of the four were geographically specific, while the last was nationwide; two were voluntary, which ordinarily produce better outcomes than those that are mandatory. In assessing the patterns that emerge from welfare waivers, however, it is essential to recognize that any welfare-​to-​work initiative incurs higher costs, resulting from case assessment, placement, and follow-​up, compared to AFDC, a program that simply issued checks. This cost is indicated by cost per experimental participant. The logic of welfare reform holds that in the best of welfare reform worlds, two outcomes are attained: first, the cost of mounting the welfare-​to-​work initiative would be recovered by lower welfare payments; second, welfare recipients would achieve sufficiently higher earnings to become economically independent of public assistance. With respect to the former, the state’s objective is met

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Table 3.1.  COMPARISON OF WELFARE-​T O-​W ORK WAIVERS .

Program

Type

Participant

Cost per Experimental Outcome

Arkansas WORK

Mandatory

$118

Earnings

Program

Experimental Control Difference

Year 1

$167

Year 2

$233

Year 3

$337

AFDC payments

San Diego

Mandatory

$919

SWIM Model

Year 1

–​$145

Year 2

–​$190

Year 3

–​$168

Earnings Year 1

$352

Year 2

$658

AFDC payments

New Jersey

Voluntary

$787

OJT Program

Year 1

–​$407

Year 2

–​$553

Earnings Year 1

n/​a

Year 2

$591

AFDC payments

Homemaker

Voluntary

$9,505

Year 1

–​$190

Year 2

–​$238

Earnings

Home Health

Year 1

$2,026

Aid Demonstration

Year 1

$1,347

Year 3

$1,121

AFDC + Food Stamps Year 1

–​$696

Year 2

–​$858

Year 3

–​$343

Adapted from Gueron, J., & Pauly, E. (1991). From Welfare to Work. New York, NY: Russell Sage Foundation, Table 1.1.

clearly in the Arkansas WORK program, which recovered its costs in Year 1, and the San Diego program, which recovered its costs during Year 2; cost recovery for the remaining programs remained elusive. Thus, the payoff for states undertaking waivers to establish welfare-​ to-​ work programs was mixed.

[ 64 ] Prelude

Welfare recipient earnings, on the other hand, were less ambiguous. Income increases were puny for all the programs, on an annual basis ranging from $167 in Arkansas WORKs to $2,026 for the Homemaker Home Health Aid Demonstration (HHHAD). Assuming two thousand hours in a work-​ year, the increase in earnings varied from $.08/​hr in Arkansas WORKS to $1.01/​hr for HHHAD, and neither amount is likely to be sufficient to elevate a family out of poverty. Indeed, the vast majority of mothers participating in welfare-​to-​work remained eligible for Medicaid and Food Stamps, despite earnings increases. Notably, the only program that significantly boosted earnings was HHHAD; however, this project reflected a problem typical of welfare-​to-​work programs:  large boosts in earnings require intensive training, which is expensive. Moreover, this project was unlikely to ever recover its costs by reducing welfare benefits. Paradoxically, HHHAD earnings eroded significantly, perhaps due to the nature of the employment, which involved physical stress from lifting patients and high staff turnover. The flurry of welfare waivers reflected broad public interest in public assistance programs, informing decisions about how to reform welfare. While private organizations conducted research under state contracts, monitoring welfare recipients as they navigated various welfare-​to-​work scenarios, occasionally public opinion was surveyed as well. The survey sample of a rarely referenced study was sufficiently large to describe the perceptions of the general public, as well as whites, blacks, and welfare recipients themselves. Conducted by Public Agenda, the trade association for opinion pollsters, the study conformed to standard survey practices at the time.22 Responses to questions about welfare recipients tended to mirror those of other groups, as noted in Table 3.2. On the eve of welfare reform in 1996, welfare recipients themselves agreed with whites, blacks, and the general public:  welfare was largely counterproductive. Immediately after the 1996 welfare reform passed, outcomes were announced for field experiments in Atlanta, Georgia, a largely African American city, Grand Rapids, Michigan, which was predominantly white, and Riverside, which was disproportionately Hispanic, to determine the impact of requiring welfare recipients to accept any job, to work first, or to pursue training to get a job promising higher wages. Conservatives had advocated work first, arguing it was the best corrective for behavioral poverty, while liberals had insisted that a welfare family was unlikely to become economically independent of public assistance without training. As in Table 3.1, the outcomes were twofold: participants’ earnings and AFDC payments. But this experiment was unique in contrasting labor force

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Table 3.2.   PROBLEMS WITH THE WELFARE SYSTEM

People abuse the system

Welfare Recipients*

General Public*

Whites*

Blacks*

73

72

72

67

70

68

68

71

66

60

66

60

64

69

62

67

60

59

61

64

57

60

57

62

by staying on too long and not trying hard enough to get off It’s financially better for people to stay on welfare than to get a job The system gives people benefits without requiring them to do work in return People cheat and commit fraud to get welfare benefits Welfare encourages teenagers to have kids out of wedlock The system undermines the work ethic and encourages people to be lazy *Percent saying the problem is “very serious.” Adapted from Steve Farkas and Jean Johnson, “The Values We Live By” (New  York:  Public Agenda, 1996), p. 40.

attachment (LFA; aka work first) with human capital development (HCD; aka training/​education). With respect to cost per experimental participant, the Grand Rapids and Riverside tests recovered costs, but only after Year 2. Earnings remained relatively modest, never sufficient to boost the typical participant out of poverty. However, LFA exceeded HCD with regard to both earnings and AFDC payment reductions, validating conservative claims that taking any job was superior to training/​education. The rebuttal, of course, was that it would be premature to measure training/​education after Year 2, let alone Year 1, since earnings increases would be contingent on raises due to long-​term employment; however, by that time, the die had been cast and conservatives had already won on welfare reform with passage of the 1996 Welfare Reform Act.

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Table 3.3.  TWO-​Y EAR OUTCOMES FOR WELFARE-​T O-​W ORK STRATEGIES

Program

Labor Force Attachment Net Cost/​ Impact Experimental (LFA-​control)

Atlanta

$2,278

Earnings

Earnings $347 Year 1

$184

Year 2

$753 Year 2

$396

AFDC payments

$1,108

LFA–​HCD Difference

Year 1 Total

Grand

Human Capital Development Impact (HCD-​control)

$1,100 Total

$580

Year 1

–​$130 Year 1

–​$127

Year 2

–​$238 Year 2

–​$206

Total

–​$368 Total

–​$333

Earnings

$520

AFDC payments

$35

Earnings

Rapids Year 1

$543 Year 1

$136

Year 2

$475 Year 2

$450

Total AFDC payments Year 1 Year 2 Total Riverside

$1,263

Earnings

$1,019 Total –​$688 Year 1 –​$650 Year 2 –​$1,338 Total $651 Year 1

Year 2

$561 Year 2

AFDC payments

–​$311 –​$514 –​$826

$512

$1,212 Total

$148 $39 $187

$1,025

AFDC payments

Year 1

–​$581 Year 1

–​$532

Year 2

–​$686 Year 1

–​$602

Total

$433

Earnings

Year 1 Total

$586

AFDC payments

–​$1,267 Total

–$​ 1,134

$133

Adapter from Hamilton, G., et  al. (1997). National evaluation of welfare-​to-​work strategies (Tables  9.2–​ 4,10.2–​3, 10.8). Washington, DC: US Department of Health and Human Services.

If welfare recipients made largely symbolic gains from participating in welfare-​to-​work initiatives, the winners in welfare waivers were states whose governors who were able to extrapolate modest savings across caseloads of thousands of recipients. Even though their states stood to lose money by mounting welfare-​to-​work programs, the governors could claim reduced AFDC payments, a political plus. Of these examples, the clear “winner” in the welfare-​to-​work sweepstakes was Arkansas, which not only recovered costs through benefit savings, but also boosted earnings. Given

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the state’s AFDC caseload at the time, Arkansas benefited on the order of $3 million from welfare-​to-​work, not an insignificant amount for a small state. Arkansas’s governor was Bill Clinton, who, realizing a public relations windfall when he saw it, pledged during his presidential campaign to “end welfare as we know it.”

1996

To liberals, the Clinton presidency represented a third expansionary era of the American welfare state, as foretold by Arthur Schlesinger, who had predicted 30-​year cycles of progressive social program expansion.23 Central to that political calculus was healthcare and enactment of a federal health benefit for all Americans, which FDR had omitted from the Social Security Act and LBJ had partially addressed through Medicare and Medicaid. In this political calculus, welfare reform was decidedly second. But, Hillary Clinton’s mismanagement of the Health Security Act (HSA) not only sabotaged healthcare reform, but also proved inauspicious for welfare reform. Maladroit health reform provided the impetus for an ambitious Congressman, Newt Gingrich, to frame a “Contract with America” in anticipation of the 1994 midterm election. Gingrich’s Contract with America included a welfare reform plank, called for time-​limiting welfare to two years, and mandated work for AFDC recipients.24 Having returned Congress to Republican control for the first time in four decades, Gingrich was in a strong position to push welfare reform. After the ignominious defeat of HSA, President Clinton’s pivot to welfare reform was frustrated by the Republican Congress. The chastened president’s preference for welfare reform was essentially liberal, relying on labor policy and government supports to “make work pay.” In crafting welfare reform, Clinton relied on advisors like David Ellwood of Harvard’s Kennedy School of Government, who argued that welfare should be understood in relation to work, encouraging welfare recipients to become integrated with the labor market.25 Hence, Clinton’s welfare reform task force favored increasing the minimum wage and expanding the Earned Income Tax Credit. The battle over welfare reform was soon joined. Clinton vetoed conservative bills to overhaul AFDC consistent with the Contract with America, but his re-​election was fast approaching, and the Republican candidate, Bob Dole, was savvy about Congress and policymaking. President Clinton, alert to Dole’s accusation that he had failed to reform welfare, capitulated, signing the PRWORA, thereby ensuring his re-​election, but infuriating

[ 68 ] Prelude

liberals for ending the cash entitlement for poor families. As a Rhodes scholar, Clinton would have recognized fully the apostasy that the 1996 welfare reform represented:  in contradiction to Schlesinger’s prophecy, Clinton had not expanded the welfare state, but had cashiered a social entitlement instead. Enactment of welfare reform prompted a storm of protest from liberals. Clinton administrators resigned in protest, including Peter Edelman;26 Hillary Clinton, former president of the board of the Children’s Defense Fund, became persona non grata to the organization founded by Marian Wright Edelman, wife of Peter Edelman. Moynihan, now a New  York Senator revered for his knowledge of poverty and social policy, imagined photos by Jacob Riis, predicting children would be left to fend for themselves in the streets. “In ten years’ time we will wonder where these ragged children came from,” Moynihan projected. “Why are they sleeping on grates?”27 The primary provisions of PRWORA—​replacing AFDC with Temporary Assistance for Needy Families (TANF), time-​limiting federal welfare to five years, devolving TANF to the states as a block grant, instituting a work mandate for parents, and denying benefits to felons—​represented a conservative triumph in social policy.28 At the state level, however, little had changed, since the vast majority of states continued to operate welfare waivers that had already replaced AFDC. How effectively states administered TANF would depend on reports to the federal government; however, warning signs were already evident. Foreshadowing what would transpire, Ron Haskins, who oversaw the drafting of welfare reform proposals considered by the House Ways and Means Committee, observed, “A demanding welfare system like the one we were proposing would increase independence but might also increase destitution.”29 Aside from documentaries, such as Frederick Wiseman’s 1975 Welfare, the experience of welfare recipients has largely been omitted from accounts of welfare programs. Redolent in data, welfare administrators have administered public assistance programs that were out of synch with the experience of the welfare poor. A  former AFDC recipient expressed the lack of congruity, “there is no accountability in the social service field. None demanded. None supplied.”30 Rarely, the nastiness of welfare eligibility technicians came to public attention, as from this recording in a class action suit against a California welfare department. Yes, Mara Anna Young, this call is for you. This is the Department of Social Services Health and Welfare Agency, and we are in receipt of your letter saying we have committed blatant fabrication and malfeasance.

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Miss Young, you are so full of shit. Why don’t you get off your fat lazy ass and get a job? You know, taxpayers like me really resent the shit out of you. What makes you so special that you don’t have to get up and go to work? You just work the system and take and take and take. Why don’t you get a life, get a job, and quit taking from people who do have lives and jobs? You sound plenty healthy. If you’ve got a disability, go to Goodwill. But quit trying to take our money. You are not special, you are a piece of shit. That’s what the Department of Social Services Health and Welfare Agency thinks of you. So get off your fat lazy ass, you bitch, because we’re sick of you. And guess what? You’ve already lost your case. We just want to let you know what we think of you. We think you’re garbage. Everybody thinks you’re garbage. Go somewhere else and leech, you bitch.31

Harassment of public assistance applicants remains a feature of urban welfare offices. A conflict in a New York City benefits office involving a young African American mother resulted in the police stripping her infant son away and arresting her when she was only attempting to determine the status of cash assistance, an incident that went viral on social media. In 2017, police were called 2,212 times about incidents in NYC food stamp offices, and they arrested 97 people. “The practice of prematurely closing public benefits cases and forcing recipients to reapply is so common that advocates for the poor have a word for it:  churning,” concluded a reporter.32 On occasion the circumstances of the welfare poor were captured by academics. One observer of welfare-​to-​work recounted, “The work-​first welfare intake structure is meant partly to punish or shame those who pass through it, partly to teach a lesson and issue a challenge for ‘improved’ behavior, and partly to weed out those who are not strong enough to withstand the demands,” which is not incongruent with “the preferred institutional outcome of having applicants drop out of the welfare system.”33 Another observer recounted caustically, Waiting and wending one’s way through the government assistance bureaucracy subjects poor people to physical discomfort, emotional aggravation, and sometimes despair. When recipients of welfare are required to perform bureaucratic gymnastics that result in the denial of benefits, the “customer” is hardly satisfied. But unlike in a competitive business environment, poor customer service has no downside for welfare bureaucrats. In fact, losing a “customer” is an upside—​the welfare count is reduced, and this is a primary criterion of PRWORA’s success.34

[ 70 ] Prelude

Thus, while state welfare waivers generated a trove of administrative data, the plight of welfare families was essentially ignored.

AFTERMATH

Two decades after welfare reform, the confluence of administrative caprice, recipient diversion, and disparate employment options effectively bifurcated the welfare poor. As the most recent federal report on welfare noted, “The percentage of individuals who received TANF cash assistance in an average month fell from 4.0% in 1997 to 1.4% in 2007. In a typical month in 2014, TANF served 3.6 million recipients.”35 Combining full-​and part-​time work, 43.8% of TANF recipients were working, while an equal number were not; 12.4% were looking for work.36 Accordingly, a typical TANF recipient working full time would be eligible for an EITC refund, which would lift her family above poverty; if her wages were low enough, she might also be eligible for Supplemental Nutrition Assistance Program (SNAP) and Medicaid. As Ellwood and Clinton had intended, work paid better than welfare for many low-​wage workers. That welfare-​to-​work would vault a family on public assistance out of poverty was unlikely, however, as the waiver demonstrations documented. Assuming that most TANF recipients were female and represented the bottom decile of workers, poor mothers’ wages increased from 1979 to 2017 only 0.7%.37 For poor households, low wages tended to be accompanied by income volatility due to unpredictable work hours as well as expense shocks, leaving families at risk for insolvency: 29% of families with incomes below $25,000 reported being unable to cover a $400 emergency, and 59% lack enough savings to manage for three months.38 Lacking access to mainstream financial institutions, the working poor often resorted to alternative financial services—​payday lenders, auto title financiers, check-​cashers, rent-​to-​own, buy-​here-​pay-​here auto lots—​to cover expenses, paying extortionate interest rates in the process.39 As poor working households became dependent on alternative financial services, often rolling over loans, their income and assets further decreased. If working was not sufficient for self-​ sufficiency for recipients transitioning from welfare to employment, what of those welfare recipients who were not working or had exceeded the time limit for receipt of benefits? Since neither states nor the federal government had an obligation to track the casualties of welfare reform, “welfare leavers” would become a phantom population, adding to the “underclass.” The late New York Times reporter Jason DeParle acknowledged the consequence:  “Almost a

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third of the families leaving welfare . . . left without welfare or work—​and their means of survival was a national mystery. Welfare rights groups went so far as called them ‘the disappeared.’ No one could see how they got by.”40 Even conservative advocates of welfare reform were having misgivings, as was Haskins, who expressed concern about “a group of mothers at the bottom—​that is worse off now than before welfare reform.”41 While government welfare agencies had collected relatively good data on families receiving public assistance, they neglected to track those who had been terminated from aid. A cynic might have rationalized this on the basis that adults were responsible for their conduct, but most of the beneficiaries of TANF were, in fact, children. Having attained a reputation as an ethnographer of the poor, Kathryn Edin once again pursued research on family poverty, and a colleague versed in government data provided evidence on families who no longer received public assistance. Edin and her assistant, Luke Shaefer, found, “In early 2011, 1.5  million households with roughly 3  million children were surviving on cash income of no more than $2 per person, per day, in any given month.”42 The increase in the poorest of the poor coincided with state policies enabled by welfare reform in 1996. Mississippi’s welfare population, having peaked at 180,000, by 2014 was a tenth of that, 17,000.43 “A hidden but growing landscape of survival strategies among those who experience this level of destitution followed. At the community level, these strategies pulled families into a web of exploitation and illegality that turned conventional morality upside down,” the researchers warned.44 Welfare reform may have provided a pathway to the labor market and economic self-​sufficiency for many, but it was also populating the underclass. In a review of $2.00 a Day, Jencks agreed with the thesis, but offered a qualification on data. Foremost, Jencks agreed that welfare departments diverted the poor from benefits:  “Understaffed welfare offices can create long lines that discourage applications. Many TANF applications also report having been turned down with no explanation at all.” This, as critics of welfare reform have alleged, was the purpose all along, which Jencks confirmed by citing Illinois: “As in most other states, TANF’s primary goal is not to protect children whose parents cannot find work by ensuring that their family has shelter, heat, light, food, and shoes, but to cut program costs by reducing the number of recipients.” The upshot for welfare leavers was Dickensian:  reliance on scavenging for can and bottle deposits, selling plasma as well as sex and drugs, and after unsuccessfully doubling-​ up in apartments, often becoming homeless. Where Jencks differed with

[ 72 ] Prelude

Edin and Shaefer was on the number of Americans in extreme poverty. By Jencks calculation, the “prevalence rises from 0.5  percent in 1996 to 1.0 percent in 2011, and the actual number rises from 189,000 to 373,000 households with children.”45 Worsening deprivation of families no longer eligible for welfare provoked Peter Edelman, who had resigned in protest after Clinton signed PRWORA, to conclude, Having fewer people on TANF would be good if it was because fewer people were poor, but that is not the case. Welfare is dead in most of the country. No wonder we have 15 million people with incomes below half the poverty line and 7.5 million people whose only income is from food stamps—​which is just over $6,000 a year for a family of three, less than a third of the poverty line. We still have 43 million people in poverty as well as 15 million in deep poverty, mainly because the recovery from the Great Recession has not yet reached them.46

Meanwhile, welfare departments continued to suppress the take-​up rate, denying eligible recipients the benefits to which they were entitled. “Even today, audit studies find that nonwhite applicants in welfare offices face more unprofessional behavior from caseworkers than whites: withholding crucial information, refusing to provide applications, and other forms of outright rudeness,” concluded one researcher. “Concerns about discretionary excesses are valid. Caseworkers do turn down individuals based on bigotry and unconscious bias.”47 As a result, the number of families in extreme poverty, while small, increased as welfare reform proceeded apace, as depicted in Figure 3.1. As the percentage of families receiving cash benefits plummeted, an unknown but morally significant number of former welfare recipients vanished from public data systems. Maryland, a progressive state electing to continue benefits to families encountering the federal time line rather than terminate them from TANF, illustrated the mixed blessings of welfare reform. A  15-​year follow-​up of TANF families revealed a bifurcation of the caseload. A  significant percentage of household heads found jobs, and those who remained in the labor market reported earnings of $21,418; however, the percentage of workers fell from 68.3% one year after receiving TANF to 39.7% after fifteen years. As a result, many families remained eligible for other public assistance benefits: 45.6% for SNAP and 63.7% for Medicaid. But, as skeptics of welfare reform had predicted, many families simply disappeared:  21%

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Percent Participation in AFDC/TANF

100 85.7

84.3

80.2 75

69.2 55.8

50

48.1

TANF ← replaces AFDC

25

0 1981

51.8

1987

1990

1994

1997

2000

2003

42.0

39.0

2006

33.0

33.9

2009

2012 2014

30.7 27.6

Figure 3.1.  Rates of participation in AFDC/​TANF cash assistance, among those eligible to participate, 1981 to 2014. Source: Administrative data from the U.S. Department of Health and Human Services. Administration for Children and Families. Microsimulation model TRIM3 and the Current Population Survey’s Annual and Social Economic Supplement. https://​aspe.hhs.gov/​system/​files/​pdf/​257521/​WelfareIndicators.pdf, p. 19.

were not formally working in Maryland and were no longer receiving TANF, Medicaid, or SNAP.48 But, having configured ways to reduce welfare caseloads, states also benefited from diverting TANF funds from families to social services. As financed through PRWORA, TANF was a fixed sum devolved to the states:  $16.5 billion. Although states were obligated to maintain their financial contribution so as not to substitute federal funds, they enjoyed significant latitude in using federal revenues, many electing to shift funds from cash benefits to families to “preventive” services and benefits, such as child care, work training, and child welfare. This diversion of TANF funds away from poor families toward services is consequential in two respects. Foremost, TANF families received less in cash assistance, and, as their benefits dropped, they had to resort to other sources of income. Second, most of the services were not evidence-​based, but were justified intuitively. The upshot was amplification of “nanny states” funded by subtracting cash from welfare families and diverting revenue to services staffed by human service professionals operating either as agents of the state or under service contracts, as shown in Figure 3.2. Although some state expenditures were justified as assisting welfare recipients with work, such as childcare and a state refundable tax credit, other expenses were of questionable benefit, notably child welfare, as described in Chapter  2. This redistribution of cash from welfare families to professional service providers was prompted in part because

[ 74 ] Prelude

Basic assistance: 24% Work activities: 9% Work supports & supportive services: 3% Child care: 17% Administration & systems: 10% Refundable tax credits: 19% Pre-K: 7% Child welfare: 7% Other: 13%

Figure 3.2.  How states spent federal and state TANF funds in 2016. Note: TANF = Temporary Assistance for Needy Families. Source: CBPP analysis of Department of Health and Human Services 2016 TANF financial data. https://​www. cbpp.org/​research/​family-​income-​support/​how-​states-​use-​funds-​under-​the-​tanf-​block-​grant.

the TANF block grant was not calibrated with inflation. During the first years of TANF, a buoyant economy offered substantial work opportunities, permitting states to reduce welfare rolls and producing a “TANF surplus,” which could be diverted to social services; however, the years that followed, especially the Great Recession starting in 2008, squeezed states’ ability to fund social services. When funding was diverted to social service interests, which were more powerful than TANF families, state revenues advantaged the former at the expense of the latter. Since its inception, TANF lost 30% of its value to inflation, providing the impetus for transfer of TANF funds from families to social services. In essence, states treated PRWORA as a source of general revenue sharing. As Peter Germanis observed, “The result of this misguided effort is a safety net with massive holes—​one that is not effective in providing either basic assistance to needy families or ensuring that low-​income parents receive the work-​related activities and services they need.”49 Regardless, conservatives acclaimed welfare reform as an unqualified success, while liberals expressed little interest in revisiting, let  alone reviving, a family

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assistance program widely perceived to have been corrupt. Meanwhile, in 2017, 5.76  million American children lived in families with incomes at less than one-​half the federal poverty level.50 Having reformed welfare by mandating that welfare mothers work, PRWORA’s unintended consequence was to push millions of children deeper into poverty.

CODA

The alleged success of welfare reform has given conservatives a powerful argument for converting other public assistance programs to block grants, devolved to the states. As former vice-​presidential candidate and then Speaker of the House Paul Ryan put it: The federal government would grant states the flexibility to collapse several means-​tested programs into one overall payment that would be paired with personal case management to directly benefit the recipient. Rather than running around to a series of different offices to qualify and collect benefits, individuals will get a dedicated case manager or counselor who will help put together a plan for getting back on their feet with measurable goals, including ultimately graduating from the program and into self-​sufficiency.51

While consolidating fragmented public assistance programs may have merit, the TANF program, on which conservatives have predicated thinking about prospective welfare policy, has been a discretionary program with a fixed budget. Replicating fixed funding for public assistance programs, such as SNAP and Medicaid, may appeal to budget hawks, but it is implausible if a moral compass remains instrumental in social policy. Hunger remains a persistent problem in populations who have difficulty navigating complex eligibility requirements, such as the elderly. Subsequent attempts to control Medicaid by capping lifetime benefits are risible for the simple reason that most Medicaid payments are for skilled nursing care for the elderly. Capping Medicaid thus raises the specter of Granny being pushed to the curb once she’s expended her Medicaid benefit. Two decades after welfare reform, data on the welfare-​and working-​poor has expanded geometrically, forming a knowledge base upon which a new generation of antipoverty efforts could be crafted. The outcomes of welfare reform demonstrate that interventions focusing solely on work tend to result in inadequate wages, even for those able to participate fully in the labor market; therefore, expanded income supports are necessary. Almost completely omitted has been the issue of wealth equity, the presumption

[ 76 ] Prelude

being that, with the exception of a nod to home ownership for lower income families, assets are the prerogative of upper-​income households. Liquid assets become an essential component of discussions about poverty because they can serve as a buffer against destitution. Of equal moral import is acknowledging the harm of a harsh work mandate inflicted on poor adults incapable of holding a full-​time job. Failure to recognize the profound problems these families present not only exacerbates dysfunction, as in the case of homelessness, but also adds expenses incurred by the criminal justice and healthcare systems. Finally, the ambience of the inner-​ city welfare department, which contradicts the very idea of “human services,” warrants attention. City welfare departments are often intimidating to recipients, as evident in the armed security guards, the weapons detection equipment, and the bulletproof glass separating beneficiaries from technicians. Since welfare offices process eligibility for benefits, not cash, the security has only one purpose: “rabble management.” A classic in the welfare literature, Street-​ Level Bureaucracy, coined the phrase bureaucratic disentitlement to capture the denial of benefits to the poor who are eligible for aid.52 A Los Angeles journalist reported this account: Welfare offices are so understaffed, the workers so burnt out, that some help applicants cheat just to fill unofficial quotas, avoid confrontations, get them out of their hair. It is a system so flawed that the greedy, the lazy, rip and run with ease. The attitude of both sides of the reinforced windows that separate staff from applicants is: Us against Them. The system becomes so cynical that the desperate—​the great majority of applicants by most estimates—​are left under a pall of suspicion, clawing even harder to get the help to which they’re entitled.53

Given capricious treatment by eligibility technicians, citizens have every right to be angry, but a more apt response would be to upgrade staff, service, and offices.

NOTES 1. Daniel Patrick Moynihan, The Negro Family: The Case for National Action (Washington, DC: Department of Labor, 1965). 2. Daniel Patrick Moynihan, Maximum Feasible Misunderstanding (New York: Free Press, 1969). 3. Theodore Lowi, The End of Liberalism (New York: W.W. Norton, 1969), p. 200. 4. https://​en.wikipedia.org/​wiki/​James_​Samuel_​Coleman

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5. Edward Banfield, The Unheavenly City (New York: Little Brown, 1970). 6. M. Kenneth Bowler, The Nixon Guaranteed Income Proposal (Cambridge, MA: Ballinger, 1974). 7. Russell Long, “The Welfare Mess: A Scandal of Illegitimacy and Desertion,” Congressional Record, December 14, 1971. 8. Alice O’Connor, Poverty Knowledge (Princeton, NJ: Princeton University Press, 2001), p. 224. 9. Frances Fox Piven and Richard Cloward, Regulating the Poor (New York: Vintage, 1971), pp. 306–​08. 10. Overview of Entitlement Programs, 200, pp. 377, 383–​84. 11. Christopher Jencks, Rethinking Social Policy (Cambridge, MA: Harvard University Press, 1992), p. 205. 12. Christopher Jencks, “Introduction,” in Kathryn Edin and Laura Lein, eds., Making Ends Meet (New York: Russell Sage Foundation, 1997), p. xi. 13. Kathryn Edin and Laura Lein, Making Ends Meet (New York: Russell Sage Foundation, 1997), pp. 43–​45. 14. Edin and Lein, p. 42. 15. George Gilder, Wealth and Poverty (New York: Basic Books, 1981), p. 118. 16. Charles Murray, Losing Ground (New York: Basic Books, 1984). 17. Lawrence Mead, The New Politics of Poverty (New York: Free Press, 1992); The New Paternalism (Washington, DC: Brookings Institution, 1997). 18. Michael Novak, The New Consensus on Family and Welfare (Washington, DC: American Enterprise Institute, 1987), p. 45. 19. Howard Rolston, “Waiver Evaluations: How Random Assignment Evaluation Came to be the Standard for Approval,” in Judith Gueron and Howard Rolson, eds., Fighting for Reliable Evidence (New York: Russell Sage Foundation, 2013), p. 218. 20. Jason DeParle, American Dream (New York: Viking, 2004), p. 100. 21. O’Connor, Poverty Knowledge, p. 291. 22. Farkas, S., and Johnson, J. The Values We Live By (New York: Public Agenda, 1996), p. 40. 23. Arthur Schlesinger, Jr., The Cycles of American History (New York: Houghton Mifflin, 1986). 24. https://​en.wikipedia.org/​wiki/​Contract_​with_​America 25. David Ellwood, Poor Support (New York: Perseus, 1988). 26. Barbara Vobejda and Judith Havemann, “Two HHS Officials Quit Over Welfare Changes,” Washington Post, September 12, 1996. 27. Quoted in DeParle, American Dream, p. 143. 28. Rebecca Blank and Ron Haskins, eds. The New World of Welfare (Washington, DC: Brookings Institution, 2001). 29. Ron Haskins, Work over Welfare (Washington, DC: Brookings Institution, 2006), p. 178. 30. Theresa Funiciello, Tyranny of Kindness (New York: Atlantic Monthly Press, 1993), p. 252. Original emphasis. 31. “Inhuman Services,” Harpers, June 1997, p. 16. 32. Ashley Southall and Nikita Stewart, “They Grabbed Her Baby and Arrested Her at a Welfare Office. Now She’s Speaking Out,” New York Times, December 16, 2018. 33. Frank Ridzi, Selling Welfare Reform (New York: New York University Press, 2009), pp. 17, 16.

[ 78 ] Prelude

34. Terese Lawinski, Living on the Edge in Suburbia (Nashville, TN: Vanderbilt University Press, 2010), p. 67. 35. https://​aspe.hhs.gov/​system/​files/​pdf/​257521/​WelfareIndicators.pdf, p. 2. 36. https://​aspe.hhs.gov/​system/​files/​pdf/​257521/​WelfareIndicators.pdf, p. 11. 37. https://​www.epi.org/​publication/​ americas-​slow-​motion-​wage-​crisis-​four-​decades-​of-​slow-​and-​unequal-​growth-​2/​ 38. Jonathan Morduch and Rachel Schneider, The Financial Diaries (Princeton, NJ: Princeton University Press, 2017), p. 74. 39. Lisa Servon, The Unbanking of America (New York: Mariner, 2018). 40. DeParle, Americn Dream, pp. 184–​85. 41. Haskins, Work over Welfare, p. 351. 42. Kathryn Edin and H. Luke Shaefer, $2.00 a Day (New York: Houghton Mifflin Harcourt, 2015), p. xvii. 43. Edin and Shaefer, $2.00 a Day, p. 132. 44. Edin and Shaefer, $2.00 a Day, p. xxii. 45. Christopher Jencks, “Why the Very Poor Become Poorer,” New York Review of Books, June 9, 2016. 46. Peter Edelman, Not a Crime to be Poor (New York: New Press, 2017), p. 98. 47. Virginia Eubanks, Automating Inequality (New York: St. Martin’s Press, 2017), p. 79. 48. https://​familywelfare.umaryland.edu/​reports1/​15yearoutcomes.pdf 49. Peter Germanis, “TANF has been a Massive Policy Failure –​Let’s Start Over A Response to Robert Doar,” https://​mlwiseman.com/​wp-​content/​uploads/​ 2015/​11/​TANF-​has-​been-​a-​massive-​policy-​failure.A-​response-​to-​Robert-​Doar. pdf 50. https://​www.childrensdefense.org/​policy/​policy-​priorities/​child-​poverty/​ 51. Paul Ryan, The Way Forward (New York: Twelve, 2014), p. 237. 52. Michael, Street-​Level Bureaucracy (New York: Russell Sage Foundation, 1980). 53. Michael Goodman, “Just Another Day in Paradise,” Los Angeles Times, December 19, 1993, p. 30.

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CHAPTER 4

Starving the Beast

T

he Great Depression proved to be the catalyst for the American welfare state because economic policy failed to address abrupt and extensive market failure. The world was thrown into turmoil, and economic collapse contributed to fascist regimes that emerged in Germany and Italy. Chafing under inflation that they attributed to reparations from World War I, Germans jettisoned Weimar democracy in favor of National Socialism, while Italians submitted to an autocrat promising to revive the glory of Roman imperialism. Cosmopolitan Americans, such as Charles Lindbergh, succumbed to the aura of fascism, questioning democracy, and in the process, the relevance of the Constitution.1 Reaching for levers to stabilize a wildly vacillating economy, skyrocketing unemployment, and ever-​ lengthening soup lines, President Hoover instituted a protectionist tariff, the Smoot-​Hawley Act; later, President Roosevelt considered solutions from overseas. But the Depression only deepened.

KEYNES AND CRITICS

Having overseen relief in Belgium during World War I, having commanded the response to the 1927 flood in the Mississippi Delta, and later having served as Secretary of Commerce under President Harding, Herbert Hoover preferred a decidedly private response to the Great Depression of 1929. In addition to charitable relief, the former international mining engineer was versed in international markets, so his response was to pull conventional economic levers, instituting tariffs through the Smoot-​Hawley Act of 1930 and protecting American businesses and their workers from overseas Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

competition.2 But protectionist strategies worsened the economy:  unemployment at 8% in 1930 jumped to 25% in 1932–​1933.3 Desperate for jobs, workers moved families across the country in Model T and Model A  Fords, spending the nights in camps given a name that ridiculed the president: Hoovervilles. As Hoover’s reliance on the private sector proved inadequate, Franklin Delano Roosevelt’s economic policies as governor of New York helped vault him into the presidency in 1932. With the assistance of Harry Hopkins, FDR established programs to put men to work, yet the depression endured. FDR’s Federal Emergency Relief Administration (FERA) replicated a strategy used in New  York and boosted employment through grants to states and localities; however, the National Recovery Administration (NRA) bogged down in discord between large corporations and small businesses. Leery of federal involvement in commerce, the Supreme Court ruled the NRA unconstitutional in 1935. Seeking firmer purchase in a continually eroding economy, FDR agreed with Felix Frankfurter’s suggestion to meet with a British economist who, in leading England’s response to the Depression, was highly regarded on Wall Street: John Maynard Keynes. In late May of 1934, Keynes met with FDR, making the case for government deficit spending to jump-​start the flagging economy, the thesis of General Theory of Employment, Interest, and Money, which Keynes was completing. Neither man was impressed with the other. FDR complained to Frances Perkins that Keynes was immersed in mathematics: “He left a whole rigamarole of figures,” FDR said, “He must be a mathematician rather than a political economist.” For his part, Keynes had “supposed the President was more literate, economically speaking.”4 Thus, the Depression lingered; it was not until the build-​up to World War II that the economy recovered, validating Keynes’s theory. Keynesian economic policy, which was received enthusiastically in Britain, and only belatedly in America, provided the revenue stream for the emerging welfare states on both sides of the Atlantic. Yet, other European intellectuals had doubts. War’s end coincided with a burgeoning welfare state, and government expansion alarmed philosophers in Europe. In 1944, the Austrian economist Friedrich von Hayek, while endorsing government supports for health and education, warned against incipient totalitarianism in The Road to Serfdom.5 In 1958, a Russian Jewish refugee newly an Oxford don, Isaiah Berlin, differentiated between “positive liberty,” state paternalism that mandated conforming conduct through public policy, and “negative liberty,” the freedom of individuals to act according to their own interests. While both notions of liberty were present in modern societies,

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the hazard lay in the tendency of the state to sacrifice negative liberty in its mobilization of positive liberty through social programs.6 The critics of Keynesian economics were overshadowed by a booming global economy. Having destroyed the United States’ competitors in Europe and Japan, World War II placed the United States at the center of rapidly expanding markets, which, in turn, provided the revenues for federal social programs. Regardless, dissent became lodged in two quite different institutions. First, American economists, led by Milton Friedman, established an anti-​Keynesian beachhead at the University of Chicago. Much later, Friedman and his wife wrote a seldom-​cited article, “The Tides of Man,” chronicling economic history in three phases: Adam Smith’s presentation of laissez-​faire economics, followed by the Fabian Socialists’ establishment of the welfare state, and concluding with Hayek’s prediction of global markets.7 Significantly, the “Chicago school” of economics evolved a theory counter to modern economics, refuting Keynes. Contending that the state was not an independent, neutral actor in economic affairs, as Keynesians professed, “public choice” theory held that the state’s interests, manifested by lobbyists promoting policies favoring sponsors, thus contriving “rents” through tax revenues extracted from citizens, continually contorted public policy. “Much of the growth of the bureaucratic or regulatory sector can best be explained in terms of the competition between political agents for constituency support, through the use of promises of discriminatory transfers of wealth,” asserted James Buchanan.8 “Public choice theorists discerned a political business cycle, wherein state spending was matched to the electoral calendar to produce booms and slumps that were the cost of elected officials’ seeking to maximize votes,” observed an economist.9 Instead of operating at a government remove, Keynesian economics was complicit with the skewing of public policy, with resources favoring the affluent and well connected. Second, the anti-​Keynesians mobilized private capital and foundations to fund an international network of policy institutes, “think tanks,” to advance their critique of the welfare state, contending that government was too large, overly generous social benefits eroded the work ethic, and federal policy subtracted from the capacity of states and localities to solve social problems. “What the free-​marketeers desperately needed,” concluded two British journalists in retrospect, “was more institutional heft: places to meet outside the dreaded ‘liberal’ universities to discuss their ideas, platforms for them to promote themselves.”10 Rebooting the American Enterprise Institute as well as establishing the Heritage Foundation and the Cato Institute in Washington, DC, expanding the Hoover Institution

[ 82 ] Prelude

at Stanford University, and deploying the Manhattan Institute in New York City, complemented by smaller policy institutes in the capitals of larger states, the right deployed an intellectual infrastructure to combat Keynesian liberalism.

CHICAGO SCHOOL ECONOMICS

The Chicago school and conservative think tanks would have remained marginal to public discourse had not the oil embargo of the 1970s precipitated concurrent events that the Keynesians had failed to reconcile:  high unemployment accompanied by high inflation, “stagflation.” The “misery index,” adding the inflation and unemployment rates, reached 21.98% in 1980, permitting candidate Ronald Reagan to pummel President Carter for feckless economic stewardship. Following Margaret Thatcher’s becoming Prime Minister of England, Reagan’s presidency reversed a liberal trajectory in economic policy, introducing an era of “neoliberalism” that subsequent Democratic presidents, Bill Clinton and Barack Obama, would adopt as well. Nobel prizes in economics provided a proxy for the ascent of neoliberal economics at the Chicago school: the prize was awarded to Hayek in 1974, to Friedman in 1976, and to nine subsequent winners. In addition to favoring free trade, advocates of neoliberalism favored deregulation of government and privatization of public services, under new public management (NPM). While free trade and deregulation had been staples of laissez-​faire economics, NPM cut to the heart of the liberal welfare state in two ways: first, by transferring jobs from the public-​sector civil service, where workers enjoyed better pay and security, to the private sector, where they earned less and were more likely subject to dismissal; second, by turning recipients who had no choice with respect to services from a government monopoly to consumers who enjoyed multiple options from increasing competition of providers. Accordingly, Colin Crouch differentiated “welfare” from “choice”: “While consumer choice is a democratic value, leaving decisions to consumers themselves, consumer welfare is a technocratic one; judges and economists decide what is good for consumers. It is deeply paternalistic, the kind of idea that leads to the description of the ‘nanny state’ when a government leans in that direction.”11 Through privatization and choice, neoliberalism upended the government monopoly on service provision established through the welfare state. Thatcher and Reagan’s successors pursued neoliberal policies with alacrity; most conspicuous were Tony Blair and Bill Clinton, who labeled

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their approach a “third way.” As the liberal arc in public policy declined, even progressive Democrats were forced to concede an ideological transformation was necessary. Lamenting the defeats of presidential candidates Walter Mondale and Michael Dukakis, a cabal of centrist Democrats led by Bill Clinton had formed the Democratic Leadership Council to counter the liberal Democratic National Committee. Crafting a policy agenda that favored defense, business, and free trade, the insurgents went on to win the presidency; what its proponents embraced as the “third way,” detractors decried as “neoliberalism.” The ideological shift among Democrats would not go smoothly. Especially in the United States, where higher-​status professionals were entrepreneurs and healthcare had become a market, neoliberalism flourished, yet Clinton’s Health Security Act failed. In 1993 Clinton signed legislation implementing the North American Free Trade Agreement (NAFTA), which had been developed by Presidents Reagan and Ford. Following Reagan, Clinton’s 1996 welfare reform not only permitted states to contract with private research companies to evaluate welfare waivers, but also encouraged nonprofit and commercial organizations to compete for service contracts. While private-​ sector unions opposed NAFTA, public-​sector unions chafed at the prospect of losing membership and influence in collective bargaining under welfare reform. The collapse of union membership in the United States preordained loss of political power, accompanied by rising inequality that would rival that of the Gilded Age a century before. The first decade of the new century put neoliberal orthodoxy to the test with the onset of the Great Recession. The loss of millions of American jobs coupled with millions of homes in foreclosure left many liberals championing government intercession to right a foundering economy. Yet, the $700 billion Troubled Asset Relief Program signed by Republican President Bush, followed by the American Recovery and Reinvestment Act signed by Democratic President Obama, which dedicated $831 billion over 10  years to stimulate a flagging economy, failed utterly as a reprise of New Deal recovery strategies. Not only were the economic stimulus initiatives inadequate, slowing the recovery, but banking and financial institutions responsible for the recession actually benefited, inordinately. The Obama home mortgage salvage operation was budgeted at a paltry $75 billion, compared with the $737 billion pumped into the Commercial Funding Paper Facility, to say nothing of the $6.18 trillion diverted to the Term Auction Facility, financing contrived by the Fed and Treasury to sustain the economy.12 Congruent with neoliberal economic prescriptions, financial institutions emerged victorious, despite the tepid regulations introduced by the Dodd-​Frank Wall Street (re)regulatory act. The response

[ 84 ] Prelude

to the Great Recession, crafted during the Obama presidency, would be the last hurrah of Keynesian economists, who would soon be confronted with an equally challenging political environment. If the fiscal response to the Great Recession was shallow, the political fallout was cataclysmic: renegade groups of radical populists organized the Tea Party. On February 19, 2009, Chicago Mercantile Exchange trader Rick Santelli was recorded spontaneously ranting about the government’s subsidizing of poor homeowners: “The government is rewarding bad behavior,” Santelli fumed, suggesting that outraged “capitalists” form a new “Tea Party.” In response to Santelli’s video clip, which was transmitted by conservative media, groups formed nationwide, creating an inchoate Tea Party network. An analysis of Tea Party members revealed that many were indignant about social benefits going to the undeserving poor, people who had not contributed through work or service in the military. The white middle-​class constituents of the Tea Party were especially exercised about the minority poor’s draining tax revenue from retirees. Tea Party people know that Social Security, Medicare, and veterans programs are government managed, expensive, and funded with taxes. It is just that they distinguish these programs, which they feel that recipients have “earned,” from other social benefits, which they feel unnecessarily run up expenses, or might run up public costs in the future—​placing a burden on hardworking taxpayers to make payments to freeloaders who have not earned public support. Much of the Tea Party brouhaha about the “federal budget deficit” is a preemptive strike against funding for unworthy programs and recipients, not a call for cutting off spending on programs like Medicare and Social Security that currently benefit people like them.13

Although the progressive response to the Great Recession galvanized its own populist movement, Occupy, the Tea Party mobilization was more effective, contributing to the Republican takeover of Congress in 2012, blocking any liberal ventures entertained by the Obama Administration. The conservative opponents of the Keynesian welfare state were well armed. European philosophers contended that government programs designed to help the downtrodden had unintended consequences, particularly eroding freedom. American economists established a school of thought at a prestigious university, and they received Nobel prizes for their research. And rightwing advocacy organizations provided troops on the ground, operating at all levels of government. Denied essential tax revenues, government social obligations were suddenly tenuous, pitting allocations—​and thereby constituents—​against one another:  social

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insurance against public assistance, entitlements against discretionary expenditures. Largely overlooked was another group of allocations:  tax expenditures.

TAX EXPENDITURES

By common understanding, the welfare state distributes benefits and services, directly by the government or indirectly through contractors. However, this characterization is incomplete because it omits tax expenditures, incentives inserted in tax policy that permit private parties a benefit if they elect to participate. Because tax expenditures represent revenue forfeited by the Treasury, while benefiting individuals and companies, not only do they augment public welfare, but also their dramatic expansion attests to their bipartisan support. “Tax expenditures are incentives rather than commands,” observed one analyst, “They are more compatible with classic liberal values of limited government and individual liberty, values some argue have inhibited the growth of the visible welfare state.”14 As public policy veered away from Keynesian economics, tax expenditures represented a middle ground, attractive to liberal Democrats and centrist Republicans. Tax expenditures originated in World War II, when wage and price controls limited the ability of business to provide higher pay and benefits to attract desirable employees.15 American companies dodged the controls by augmenting pay with benefits, particularly pensions and health insurance. As competition for workers heated up in the booming postwar economy, benefit packages blossomed as well, supported by powerful unions. Subsequently, interest groups inserted changes in the tax code to encourage home ownership via the mortgage interest deduction as well as employment for low-​wage workers with families via the Earned Income Tax Credit (EITC). The latter, being refundable, actually subsidized the wages of low-​paid workers and therefore was a complement to public assistance benefits, while at the same time serving as a subsidy of employers of low-​wage workers. Not coincidentally, the EITC effectively augmented the wages of big-​box-​store and fast-​food employees. Once they had been inserted in tax policy, tax expenditures flew below the public radar and were less vulnerable to rescission; equally important, because the benefits were not subject to the Congressional appropriations process, they did not appear as direct expenditures in the budget. The federal government calculates the number of tax expenditures (167 in 2016), as well as projected value for future years. Tax expenditures vary widely in their targeted beneficiaries, ranging from armed forces personnel

[ 86 ] Prelude

and homeowners adding energy-​efficient technology, to families adopting children. Figure 4.1 depicts selected tax expenditures. As might be expected from an expanding economy, tax expenditures increase over time; however, they do not increase equally. Tax deductions for employer-​provided health insurance are sizable, a boon to health providers. Foreign corporations also benefit significantly. Less fortunate are low-​wage workers and students pursuing postsecondary education. Of note, deductions for mortgage interest as well as charitable donations, while modest, tend to favor upper-​income groups, thus contributing to economic inequality, because low-​income households are less likely to be homeowners or to itemize their deductions. One scholar concluded, This pattern of upward distribution is repeated in numerous other policies of the submerged state: federal largesse is allocated disproportionately to the nation’s most well-​off households. Such policies also consume a sizable proportion of revenues and leave scarce resources available for programs that genuinely aid low-​and middle-​income Americans.16 400.

300.

200.

100.

0. 2016

2018

2020

2022

2024

2026

Foreign Corporate Income

Employer Health Insurance

Earned Income Tax Credit

Mortgage Interest Deduction

Deferred Employee Pension

Charitable Deduction

Post-Secondary Education

Figure 4.1.  Selected tax expenditures, in billions of dollars. https://​www.treasury.gov/​resource-​center/​tax-​policy/​Documents/​Tax-​Expenditures-​FY2018.pdf

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Housing is a case in point. In 2016, the mortgage interest deduction, which favors upper-​income homeowners, totaled $61.3 billion, three times the total appropriations for the federal Department of Housing and Urban Development, $19.6 billion.17 Tax expenditures, despite forfeiting revenue for the Treasury, are poorly understood by Americans. An illuminating study conducted by Suzanne Mettler and a colleague surveyed citizen responses to tax expenditures before and after a basic explanation and a full explanation were offered. Basic information consisted of a short description, while full information included a description of the redistributive effect of the tax expenditure. The results are depicted in Table 4.1. Responses changed not only with regard to understanding the tax expenditure, but also redistributive effects. The home mortgage interest deduction was negatively rated once respondents understood it favored upper-​income households, while the EITC was positively received once respondents understood it benefited low-​income workers. While such surveys are informative regarding tax expenditures that are poorly understood by most Americans, they can also be instructive regarding social programs as a group, both social insurance and public assistance. Tax expenditures also refute the Tea Party diatribe about social benefits being targeted at the poor. The interaction of poverty, unemployment, and welfare receipt affects a large spectrum over time. Table 4.1.   EFFECTS OF INFORMATION TREATMENTS ON VIEWS OF TAX EXPENDITURES

Home Mortgage

Earned Income

Interest Deduction

Tax Credit

Favor

Oppose

Don’t Know

Favor

Oppose

Don’t Know 30.8

Basic Information Before

64.5

6.8

28.6

58.2

11.7

After

80.7

5.5

13.9

70.4

20.2

8.8

+16.2

–​1.4

–​14.7

+12.2

+9.0

–​22.0

Difference

Full Information Before

54.8

7.1

35.7

52.6

15.1

32.4

After

39.7

40.8

19.5

75.3

15.8

9.0

–​15.1

+33.7

–​16.2

+22.7

+0.7

–​23.4

Difference

Source: Suzanne Mettler, The Submerged State (Chicago: University of Chicago Press, 2011), p. 57.

[ 88 ] Prelude

By the age of 40, 37.9% of Americans have experienced at least one year of welfare use, 46.3% have encountered poverty, 54.8% have experienced the head of household being unemployed, and 70.3% experienced one or more of these events. By age 60, the cumulative percentages are 44.8%, 54.1%, 66.8%, and 77.0%.18

Once tax expenditures are added to social insurance, such as Social Security and Medicare, which benefits middle-​and upper-​income groups, as well as public assistance, virtually all Americans rely on government benefits.

TAX CUTS

Extensive reliance on government benefits notwithstanding, Republican presidents have pressed for tax cuts. The opening salvo was Proposition 13, fired in 1978 from that redoubt of Reaganism, Southern California. An amendment to the state constitution, Prop 13 not only limited the state property tax to 1% of value as well as increases to 2% annually, but also required a supermajority of votes in the state legislature to increase any tax. Since public education was primarily dependent on the property tax, California schools began a slow slide downward in quality. In 1982, President Reagan signed the Economic Recovery Tax Act, which slashed the highest individual rates from 70% to 55%, while also cutting corporate taxes.19 A catalyst in the conservative calculus was the creation of Americans for Tax Reform (ATR), which was founded in 1985 by Grover Norquist, a Republican apparatchik. Norquist, who had a Harvard MBA, had taken a counterintuitive move, consulting with a Marxist revolutionary in Angola and translating guerilla tactics to American public policy. Realizing that liberal social programs were fiscally dependent on the federal budget, but popular with the public, Norquist invoked an insurgent strategy: cut taxes. Subsequently, 1,400 members of Congress, state legislators, and governors would sign ATR’s Taxpayer Protection Pledge.20 Norquist’s Wednesday Meetings became essential attendance for conservatives moving up the food chain on Capitol Hill, forming a cabal of antitax members of Congress and committee staff. Nor was Norquist a stranger to the occasional rhetorical device—​“starve the beast”—​although he was known to delve into excess as well: “My goal is to cut government in half in twenty-​five years, to get it down to the size where we can drown it in the bathtub.”21 Drafting on American apprehension about taxation, Norquist’s crusade was remarkably successful. As depicted in Figure 4.2, tax cuts began in the

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Top Federal Tax Rates

18 921 924 927 930 933 936 939 942 945 948 951 954 957 60 963 66 69 972 975 978 981 984 987 90 993 96 99 02 005 08 011 014 017 1 1 1 1 1 1 1 1 1 1 1 1 1 19 1 19 19 1 1 1 1 1 1 19 1 19 19 20 2 20 2 2 2

19

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

https://​bradfordtaxinstitute.com/​Free_​Resources/​Federal-​Income-​Tax-​Rates.aspx

Figure 4.2.  History of tax rates, 1913–​2018.

Percent

early 1960s, accelerated after the establishment of ATR, and have been comparatively low ever since. As a New Democrat, President Clinton opted for “triangulation” in order to coopt Republicans, deferring to Wall Street and delaying his social agenda during his first term. Modest tax increases generated the first, and most likely the last, federal surpluses in recent memory, which were “returned to taxpayers” by tax cuts during the first term of Clinton’s successor, George W.  Bush, plunging the budget back into deficit. In a move of more than symbolic import, President Bush also signed legislation repealing the estate tax, relabeled the “death tax” by conservative opponents. Claiming a tax cut for each year of his first term helped Bush win re-​election. The tax cuts and recession that President Obama inherited from President Bush rehabilitated Keynesian economics, if only temporarily, prompting a massive infusion of cash into financial institutions as well as the public sector to revive a faltering economy. But doing so deepened the federal debt, a primary concern of “deficit hawks,” whose voice reached a crescendo after the 2010 midterm elections returned control of the House of Representatives to Republicans. In order to reorient his administration, Obama agreed to budget “sequestration” per the Budget Control Act (BCA) of 2011: a 12-​member committee was formed to negotiate expenditures in relation to debt—​failure to do so meant automatic across-​the-​board cuts. Notably, BCA included no tax increases.22 The election of Donald Trump to the presidency marked an escalation of tax cuts, engineered by Republican control of Congress, with the GOP forsaking any apprehension about increasing the federal debt. The Tax Cuts and Jobs Act (TCJA) of 2017 continued the march toward reducing taxes, even if that meant worsening debt and escalating inequality. With regard to the latter, Table 4.2 charts the effects of TCJA on various income groups. According to the Congressional Budget Office, by 2025 the lowest quintile will receive a refund of $70, while the top quintile will receive over 100 times as much, $7,460. But the real winners of TCJA are the richest one-​ tenth of 1%, who will gain $252,300, a windfall.

THE DEFENESTRATION OF DEBT

Of course, tax cuts under conditions of persistent deficits deepen federal debt, which has increased relentlessly, as depicted in Figure 4.3. As Figure 4.3 shows, the Clinton surplus was followed by the Bush deficits, which were dramatically eclipsed by those following the Great Recession during the Obama presidency. Sequestration moderated deficits,

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Table 4.2.   DISTRIBUTION OF FEDERAL TAX CHANGE OF THE CONFERENCE AGREEMENT FOR THE TAX CUTS AND JOBS ACT BY EXPANDED CASH INCOME PERCENTILE, 2025

Expanded Cash Income Percentileb

Average Federal Tax Rated Average Change in Share of Total Federal Tax After-​Tax Federal Tax Change Under the Incomec (%) Change (%) (dollars) Change (%) Proposal (%)

Lowest quintile

0.4

13

–​70

–​0.4

3.9

Second quintile

0.9

5.6

–​390

–​0.8

7.8 12.8

Middle quintile

1.3

11.4

–​910

–​1.1

Fourth quintile

1.4

17.4

–​1,680

–​1.2

15.8

Top quintile

2.3

65.8

–​7,460

–​1.7

24.4

All

1.7

100.0

–​1,570

–​1.4

18.7

80–​90

1.4

11.0

–​2,410

–​1.1

18.7

90–​95

1.5

7.9

–​3,670

–​1.2

20.8

Addendum

95–​99

3.2

21.6

–​12,860

–​2.4

23.1

Top 1%

2.9

25.3

–​61.090

–​1.9

31.4

Top 0.1%

2.7

10.5

–​252,300

–​1.8

32.1

Source:  https://​www.taxpolicycenter.org/​publications/​distributional-​analysis-​conference-​agreement-​tax-​ cuts-​and-​jobs-​act/​full

Percentage of Gross Domestic Product 4

Actual Projected

Surpluses 2 0 –2 –4 –6

Average Deficit, 1968 to 2017 (–2.9%)

Deficits

–8 –10 1968

1973

1978

1983

1988

1993

Figure 4.3.  Total deficits or surpluses. https://​www.cbo.gov/​publication/​53781

1998

2003

2008

2013

2018

2023

2028

yet TCJA increased deficits and debt well into the future. Aside from debt exceeding the value of the nation’s GDP, deficits present an immediate problem: interest payments—​$390 billion for 2019 alone—​must be paid to sustain the “full faith and credit of the U.S. government.” Coupled with tax expenditures, complicit in rising inequality, interest payments on the debt subvert more productive investments, such as research and development as well as postsecondary education. Of course, increasing tax revenues could ameliorate the annual deficit, yet few have confidence in this prospect. Between 2010 and 2013, the number of IRS auditors dropped 14%, paralleling a drop in the audit rate, down from 1.11% to 0.96%.23 Reliance on audits to maintain the integrity of the tax system may be illusory, however. For example, one tax scholar concluded that the estate tax was so riddled with exemptions and qualifications that it resembled a “voluntary tax,” in essence, inviting people to pay or to disregard it altogether.24 In response to progressive calls for a wealth tax on the 2% of Americans with more than $50 million, former Treasury Secretary Lawrence Summers was skeptical, citing various tax dodges enjoyed by the wealthy: questionable appraisals; valuation discounts for illiquidity and lack of control; establishment of trusts that enable division of assets among family members with substantial founder control; planning devices that give some income to charity while keeping the remainder for the donor and her beneficiaries; tax-​ advantaged lending schemes; and other complex devices known only to sophisticated investors.25

Taxes, it seems, are compulsory, except when they’re not. With the publication of The Panama Papers, the international cartel of tax-​avoidance schemes was exposed. Delving into the financial documents on only one firm that constructed shell companies for wealthy investors, journalists concluded, A shocking number of players from the financial world are avoiding the regulatory bodies in their countries with the help of shell companies. By doing this they are undermining democratic principles: when a society’s rules, agreed on and supported by all, do not apply to those whose power and wealth allow them to circumvent them, they lose their meaning.26

The journalists guessed that the European Union forfeited 1 trillion euros in revenue loss, an amount that is suggestive for the United States,

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particularly since this report examined files from just one of hundreds of such firms. Thus, porous rules and lax enforcement of taxation deepen debt. Absent tax increases, Republicans have dismissed the relevance of deficit spending; as Dick Cheney famously asserted in 2003, “Reagan proved that deficits don’t matter.”27 But, of course, they do. Claiming the irrelevance of debt while negating tax increases is comparable to fighting a fire without water; affordable, perhaps, for those with insurance, but catastrophic for the rest. In other words, what an economist would call a moral hazard, or a physician would call an addiction.

AUSTERITY

Tax cuts, as conservative orthodoxy would have it, served the equivalent of Keynesian government stimulus, jumpstarting the economy by freeing money expropriated by government so that private parties could put it to better use. The result, of necessity, would be a heavy dose of fiscal austerity, “a form of voluntary deflation in which the economy adjusts through the reduction of wages, prices, and public spending to restore competitiveness, which is (supposedly) best achieved by cutting the state’s budget, debts, and deficits,” as one economist concluded. “Doing so, its advocates believe, will inspire ‘business confidence’ since the government will neither be ‘crowding out’ the market for investment by sucking up all the available capital through the issuance of debt, nor adding to the nation’s already ‘too big’ debt.”28 But declining tax revenues are not distributed equally through the society. Tea Party activists aptly noted the importance of Social Security and Medicare for retirees, programs that have become known as the “third rail” of American politics:  contact causes instant death. If more influential constituents defend social insurance benefits, the default is cutting public assistance programs, as was the case with welfare reform in 1996. Public assistance programs disproportionately benefit minority women and children, however, raising the specter of motives based on racism and misogyny, if not also being anti-​family. Essentially, government austerity shifts responsibility from government to the private sector, often leaving families to fend for themselves.29 Paradoxically, the poorest states have voted Republican, despite forfeiting significant federal revenues, the refusal to adopt the Medicaid expansion through the Affordable Care Act being the most obvious illustration. Even

[ 94 ] Prelude

the 2018 midterm election found most red states voting Republican, while wealthier blue states voted Democratic.30 With respect to economic inequality, geography complements stratification. With government rescissions in social program benefits has come an outcry about rising economic inequality. Nobel laureate Joseph Stiglitz summarized the case for funding social programs: Government alters the dynamics of wealth by, for instance, taxing inheritances and providing free public education. Inequality is determined not just by how much the market pays a skilled worker relative to an unskilled worker, but also by the level of skills that an individual acquired in the absence of government support, many children of the poor would not be able to afford basic public health care and nutrition, let alone the education necessary for enhanced productivity and high wages. Government can affect the extent to which an individual’s education and inherited wealth depends on that of his parents. More formally, economists say that inequality “depends on the distribution of endowments” of financial and human capital.31

Government, in other words, makes necessary investments in social as well as physical infrastructure. The paradox that arises is not that private corporations also make investments in human capital through wages and salaries, workplace benefits, and research and development, most of which qualify as tax expenditures, but that, once tax expenditures are included with direct social benefits, the vast majority of Americans are government beneficiaries: “91.6% of all respondents [to a survey] confirmed that they had used at least one of these programs at some point in their lives.”32 The implications of extensive reliance on government social benefits and tax expenditures for “starve the beast” are no less than a perverse regime: government austerity produces economic anorexia. As tax expenditures complement direct appropriations, requiring a more expansive understanding of federal budgeting, so modern monetary theory (MMT) has prompted a reassessment of national economics. Claiming that a postindustrial, global economy requires less capitalization than its industrial predecessor, MMT proponents justify high deficits and printing currency, so long as appropriations represent prudent investments. As a percentage of GDP, advocates of MMT contend, the nominal value of deficits can increase without compromising economic vitality; indeed, constant deficits may be a structural feature of contemporary economics. Public debt as a percentage of GDP is not just affordable, but essential to remain competitive internationally. Predictably,

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MMT has detractors, particularly economists versed in public spending, while defenders tend to work on Wall Street. If MMT proves valid, a crucial factor will be which public investments are made with deficit dollars.33 While physical infrastructure projects, generating well-​paying construction jobs, may be justified by MMT, a guaranteed federal job, detached from norms related to performance and productivity, is probably not. Thus, evidence-​based policymaking, which places a premium on efficacy and efficiency, would be essential for MMT in practice.

BEHAVIORAL AND IDENTITY ECONOMICS

Heretofore, most of the evidence used to chart economic progress, however disparately defined, has consisted of administrative data, generated by agency information systems and surveys of citizens. Until recently, field experiments have rarely been used to either understand or improve economic decision-​making. That changed with the inception of behavioral economics, the application of psychology to economics, resulting in a 2017 Nobel Prize for one of the field’s originators, Richard Thaler. Popularized by Nudge34 and Predictably Irrational,35 behavioral economics refuted the “rational man” presumption of neoclassical economics, proposing instead that people not only made irrational decisions, but also integrated them into habits. Behavioral economists proposed “defaults,” which guided, as opposed to dictated, decision-​making that was more constructive. Subsequently, George Akerlof and Rachel Kranton extended behavioral economics to communities, in effect inventing anthropological economics. Economic decisions, they contended, were influenced by context; norms and institutions shaped the decisions people made, and not always toward their benefit: “Tastes depend on the social setting and who is interacting with whom. The tastes derive from norms, which we define as the social rules regarding how people should behave in different situations. These rules are sometimes explicit, sometimes implicit, largely internalized, and often deeply held.”36 State lotteries illustrate the adverse effects of identity economics, redistributing funds from the welfare-​and working-​poor to middle-​income households, depriving poor communities of cash that could be put to good use. But, ignorance about probability and willingness of legislators to exploit poorer citizens have resulted in the obverse: “Magical economic thinking by taxpayers and policymakers is precisely the reason lotteries are nearly ubiquitous in the United States.”37 Equally culpable are subprime vendors of alternative financial services, such as payday loans, auto title

[ 96 ] Prelude

loans, and check-​cashing, who strip income from poor consumers.38 Thus, private and public sectors take advantage of faulty decision-​making, actually deploying institutions that divert funds away from the impoverished and their communities. If people make irrational decisions that become habitual, these can be improved by systematically encouraging individuals to be more provident; when they are aggregated, entire groups benefits. Thus, in 2017 Illinois introduced automatic Individual Retirement Accounts (IRAs) for new workers, unless they opt out. A  simulation found that of workers age 19 to 59 who were defaulted into an auto-​IRA, 77% participated and benefits were significant upon retirement:  $3,000/​year for those in the bottom quartile of the household income, and $6,000/​year for those in the second quartile.39 The collective benefit for low-​and moderate-​income communities from state auto-​IRA programs would not only substantially benefit poor communities, but also counter the regressive effects of state lotteries. Despite the conceptual promise of behavioral and identity economics, experiments have usually been quite small, often involving affluent university students, rarely the minority poor. As the subdisciplines of aberrant economics having matured, large-​scale experiments are indicated, not unlike the negative income tax experiments of decades before. Individual and community variations in the design of field experiments could determine the short-​and long-​term search for outcomes that are more effective and efficient.

CODA

“Starve the beast,” as a conservative strategy for containing government has been wildly successful at cutting taxes; however, under rapidly escalating entitlement spending, attributable to the retirement of 77  million baby boomers, the result has been metastasizing debt. Economic inequality—​ separating the have-​yachts from the have-​nots—​has accompanied growing debt as government has been unable to meet its historic commitments. Unwilling to jump the “third rail,” conservatives have capitulated to liberals’ defense of popular social insurance benefits, taking limited solace in reducing funding for public assistance, as with welfare reform in 1996. So, the welfare state juggernaut steams along, depriving discretionary programs of vital funding. The 2010 Citizens United Supreme Court decision has further empowered wealthy individuals and corporations to skew the polity and to elect

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representatives hewing to their interests. While liberals have equal access to such fiscal leverage, conservatives have choreographed the script since the 1980s, resulting in a compression effect:  social entitlements—​ especially Social Security, Medicare, and Medicaid—​not only squeeze out discretionary spending—​health research, transportation infrastructure, aid for housing, defense—​but also preclude new investments. The future is ominous, indeed, as Robert Reich noted: Widening inequality has become baked into the building blocks of the “free market” itself. Even without globalization and technological change, and even absent the tax breaks and subsidies, the share of the total national income going to corporations and to the executives and investors whose incomes largely depend on corporate profits would still be rising relative to the share going to labor. The vicious cycle would achieve this on its own.40

Unless liberals are willing to indulge in the fiscal profligacy of which conservatives have been guilty, bequeathing debt burdens to future generations in the process, the only moral and rational recourse is to evaluate extant program commitments while also vetting future interventions with respect to outcomes that are constructive as well as cost-​effective. This is the focus of Part II.

NOTES 1. Ira Katznelson, Fear Itself (New York: Liveright 2013). 2. Amity Shlaes, The Forgotten Man (New York: Harper Collins, 2007). 3. https://​en.wikipedia.org/​wiki/​Smoot%E2%80%93Hawley_​Tariff_​Act 4. Kenneth Davis, FDR: The New Deal Years, 1933–​1937 (New York: Random House, 1983), pp. 319–​20. 5. Friedrich von Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1944). 6. Isaiah Berlin, Two Concepts of Liberty (Oxford, UK: Oxford Scholarship Online, 2003). 7. Milton Friedman and Rose Friedman, “The Tides in the Affairs of Men,” in Annelise Anderson and Dennis Bark, eds., Thinking about America (Stanford, CA: Stanford University Press, 1988). 8. James Buchanan, “What is Public Choice Theory?” American Institute for Economic Research (May 2003), p. 2. 9. Mark Blyth, Austerity (New York: Oxford University Press, 2013), p. 155. 10. John Micklethhwait and Adrian Wooldridge, The Right Nation (New York: Penguin, 2004), p. 48. 11. Colin Crouch, The Strange Non-​Death of Neoliberalism (Malden, MA: Policy, 2011), p. 55.

[ 98 ] Prelude

12. Robert Kuttner, “The Crash that Failed,” New York Review of Books, November 22, 2018. 13. Theda Skocpol and Vanessa Williamson, The Tea Party and the Remaking of Republican Conservatism (New York: Oxford University Press, 2012), p. 60. 14. Christopher Howard, The Hidden Welfare State (Princeton, NJ: Princeton University Press, 1997), p. 11. 15. Jacob Hacker, The Divided Welfare State (New York: Cambridge University Press, 2002), p. 112. 16. Suzanne Mettler, The Submerged State (Chicago: University of Chicago Press, 2011), p. 5. 17. https://​www.hud.gov/​sites/​documents/​PIH-​2016-​04.PDF 18. Mark Rank, Chasing the American Dream (New York: Oxford University Press, 2014), p. 36. 19. Isaac Martin, Rich People’s Movements (New York: Oxford University Press, 2013), pp. 159, 177–​78. 20. https://​www.atr.org/​about 21. Ed Kilgore, “Starve the Beast,” Blueprint, June 30, 2003. 22. https://​en.wikipedia.org/​wiki/​Budget_​Control_​Act_​of_​2011 23. https://​www.brookings.edu/​blog/​fixgov/​2014/​04/​16/​ how-​to-​improve-​tax-​collection/​ 24. Martin, Rich People’s Movements, p. 182. 25. Lawrence Summers and Natasha Sarin, “A ‘Wealth Tax’ Presents a Revenue Estimation Puzzle,” Washington Post, April 4, 2019. 26. Bastian Obermayer and Frederik Obermaier, The Panama Papers (Cologne, Germany: Oneworld, 2016), p. 304. 27. https://​newrepublic.com/​article/​133431/​ donald-​trump-​right-​deficits-​dont-​matter 28. Blyth, Austerity, p. 2. 29. Jacob Hacker, The Great Risk Shift (New York: Oxford University Press, 2006). 30. Thomas Edsall, “The Rotten Equilibrium of Republican Politics,” New York Times, January 30, 2019. 31. Joseph Stiglitz, The Price of Inequality (New York: W.W. Norton, 2012), pp. 30–​31. 32. Mettler, The Submerged State, p. 37. 33. Patrician Cohen, “Modern Monetary Theory Finds an Embrace in an Unexpected Place: Wall Street,” New York Times, April 8, 2019. 34. Richard Thaler and Cass Sunstein, Nudge (New Haven, CT: Yale University Press, 2008). 35. Dan Ariely, Predictably Irrational (New York: HarperCollins, 2008). 36. George Akerlof and Rachel Kranton, Identity Economics (Princeton, NJ: Princeton University Press, 2010), p. 4. 37. Jonathan Cohen, “The U.S. Has a Lottery Problem. But It’s Not the People Buying Tickets,” Washington Post, September 13, 2017. 38. Howard Karger, Shortchanged (San Francisco: Barrett Koehler, 2005); Gary Rivlin, Broke USA (New York: Harper Collins, 2010). 39. http://​www.urban.org/​sites/​default/​files/​publication/​27386/​412360-​How-​ Much-​Might-​Automatic-​IRAs-​Improve-​Retirement-​Security-​for-​Low-​and-​ Moderate-​Wage-​Workers-​.PDF 40. Robert Reich, Saving Capitalism (New York: Knopf, 2015), p. 83.

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PART II

The Movement An axiom of social policy holds that the application of science in public affairs is profoundly problematic. To cite one example, despite the most rigorous methods, surveys of public opinion proliferating during elections have been confounding; Truman’s victory over Dewey put pollsters on notice of their fallibility, only to be punctuated by Trump’s defeat of Clinton in 2016. Even the possibility of rationality in public affairs has been severely tested, despite generations of progress in increasing longevity, containing communicable disease, extending labor-​saving technology, and expanding prosperity.1 The defenestration of truth by the Trump Administration, during the expansion of a knowledge-​based economy, is a special case, warranting a reminder of its epistemic provenance. An open society generates myriad hypotheses about social affairs, which are evaluated with regard to validity by experts, who devise tests for replication, then disseminate new knowledge through peer-​reviewed journals and established news outlets, the knowledge-​building process serving an essential function of protecting the public from savants, cranks, and charlatans. But, this long-​running party of experts may be reaching an end. Certainly, a tension between rule by the people and rule by experts has been a feature of modernity, posing an existential problem for any open society.2 The corporate lab-​coated efficiency expert with clipboard in hand has morphed into the field researcher orchestrating randomized controlled trials, promising to make social interventions more effective and efficient. Yet, the rise of the epistocracy—​“rule by the knowledgeable [where] political power is formally distributed according to competence, skill, and the good faith to act on that skill”3—​poses a threat to democratic procedures as they are conventionally understood. By the same token, what prevents an ignorant leader, empowered by a vengeful constituency, from uprooting

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democracy, carving out of the polity an illiberal regime? Publishing just before Trump’s electoral triumph, Jason Brennan proposed prophetically, “There could be good grounds for restricting or reducing some citizens’ political power. Perhaps some citizens are incompetent participants who impose too much risk on others when they participate. Perhaps some of us have a right to be protected from their incompetence.”4 If much of the social world is inherently irrational, then how can expertise serve democratic structures and procedures? Justin Smith, a skeptic of rationalism, contends that the relationship is more fragile than commonly appreciated. At the present moment we are witnessing what may turn out to be the complete breakdown of American democracy, for all its shortcomings and unfulfilled promise, with its hard-​won and long-​thought-​out basis in constitutional law, as well as the liberal democratic order that the United States, for better or worse, symbolically served to anchor.5

Having slipped its mooring, is the American ship of state adrift, subject to caprice, happenstance, and the wily machinations of those uninterested in natural science or moral philosophy? For Jonathan Rauch, the liberal vector in social policy has been short-​ circuited by the advent of social media, which permitted the proliferation of ersatz ideas, distributed with no regard to authenticity, resulting in bogus theories that eventually blossomed as “fake news.” Rauch likens the determination of proper knowledge to a giant funnel, progressively winnowing down suggestions to propositions, to hypotheses, to tests, and eventually to knowledge; by disregarding empiricism, Internet trolls have constructed a Potemkin village of facts, which, however temporally disconcerting, are illusory and will eventually fail, Rauch asserts.6 Is this adequate for explaining the crisis of expertise?7 Decades ago, Thomas Kuhn depicted the physical sciences as paradigms constructed of consensually determined rules for understanding phenomena; however, inherent anomalies led to challenges to “normal puzzle-​solving science,” resulting in scientific revolutions.8 If the evolution of the physical sciences is lumpy, oscillating between established paradigm and accumulating anomalies, how much more so the social sciences? As social constructs, public affairs are constantly being formed and reformed by the agents and processes under investigation, which George Soros termed “reflexivity.”9 How then to empirically determine social determinants and effects in the midst of constant flux?

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Finally, the matter of sponsorship looms, as well as associated omissions. Arguing that indeterminate social material should be channeled into funnels that determine validity begs the question, Who determines the questions for analysis and manages the funneling? Which raises an implicit question, What is omitted? Rauch has a stake in his narrative as a senior analyst at the Brookings Institution, one of the nation’s foremost think tanks. Located in the Acela corridor connecting the East Coast, Brookings, like its liberal counterparts, wealthy patrons, and private university farm clubs, essentially ignored the plight of Midwest workers without a college degree, assuming the inexorable advance of the knowledge economy of which policy institutes are a part. Is it surprising that “low-​information” working stiffs would recognize that they had been abandoned by a Democratic Party that had deferred to white-​collar professionals who blessed the nation with the Great Recession, and, out of desperation, would vote for a real estate tycoon as president? Thus, epistemology, socially grounded, would be implicated in its derogation. If elections are fraught with difficulties, protracted efforts to construct interventions for public benefit have been equally trying. In 1987, Peter Rossi, a sociologist versed in program evaluation, famously stated four laws asserting the nil impact of social interventions: I. The Iron Law of Evaluation:  The expected value of any net impact assessment of any large-​scale social program is zero. II. The Stainless Steel Law of Evaluation: The better designed the impact assessment of a social program, the more likely is the resulting estimate of net impact to be zero. III. The Brass Law of Evaluation:  The more social programs are designed to change individuals, the more likely the net impact of the program will be zero. IV. The Zinc Law of Evaluation: Only those programs that are likely to fail are evaluated.10

Rossi’s metallurgy of program evaluation serves as a cautionary note for enthusiasts of government good works, regnant since the Progressive Era. Notwithstanding the difficulties attendant on developing knowledge for social purpose as well as evaluating social programs, testing interventions is compelling for several reasons. A cardinal issue is accountability; unlike politics, which voters hold public officials to account through elections, or markets, which consumers hold to account by virtue of choice, social programs, especially those mandated by government, ordinarily lack a client accountability mechanism. A related concern is government expenditures:  absent evaluations on outcomes and cost, taxpayers are obliged to pay the tab for social interventions, collectively. Under these circumstances, taxpayers have little recourse but to revolt, refusing to

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authorize expenditures altogether. Finally, social programs authorized from intuitive expectations of public benefit on occasion inflict harm on citizens, often in ways that are subtle, progressive, but avoidable: examples include juvenile detention, foster care, and inner-​city public schools. The casualties of good intentions tend to be the poor and minorities of color, at-​risk groups that warrant enhanced interventions because of their social exclusion, not subpar interventions of little positive effect. The mutual reinforcement of these factors creates a vicious circle:  a public monopoly on substandard services, which benefits professional providers, invites the retaliation of taxpayers, whose representatives refuse to adequately fund public programs, which constantly struggle to meet their mandated remits. Little surprise, then, that clients and staff defect at first chance for a private sector, promising superior benefits. The paradox for professionals is poignant insofar as the basis for their state legislated practice monopoly is assuring the public of optimal service. Evidence-​based programs thus raise a moral issue insofar as the failure to mount field experiments implicates human service professionals in harm attributed to social programs indifferent to cost and consequence. In this respect, a report by Jon Baron and Isabel Sawhill concluded that most social programs for youth that had been evaluated by randomized controlled trials (RCTs) were ineffective. Nine of these evaluations found weak or no positive effects, for programs such as the $1.5 billion Job Corps program (job training for disadvantaged youth); the $300 million Upward Bound program (academic preparation for at-​risk high school students); the $1.2 billion 21st Century Community Learning Centers (after-​school programs for disadvantaged youth); and, most recently, the $7 billion Head Start preschool program. Only one program—​Early Head Start (a sister program to Head Start, for younger children)—​was found to produce meaningful, though modest, positive effects.11

Although public social services have tended to resist rigorous evaluation of their intuitive interventions, proponents of empirical efficacy are pounding at the gates of the welfare state, demanding to be heard. Despite the fact that RCTs have been de rigueur in pharmacy and medicine for decades, public program advocates have insisted on the value of their initiatives largely on moral claims. The primacy of good intentions, however, has been eclipsed by the logic of field experiments, which accounts for an ever-​expanding archive of interventions showing outcomes that are constructive as well as cost effective. Ironically, aside from healthcare RCTs, there may well be more RCTs mounted in resource-​deprived

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developing countries than in the well-​endowed United States. In this respect, MIT’s Abdul Latif Jameel Poverty Action Lab (J-​PAL), having mounted hundreds of RCTs in developing nations, refocused its efforts to deploy field experiments in North America in 2013.12 Ironically, J-​PAL, having demonstrated the relevance of RCTs in the Third World has pivoted to the First World, the very source of the technology undergirding field experiments. “Without rigorous testing, we can’t know if a social program is making things better, making things worse, or achieving nothing at all,” observed William MacAskill, who coined the term effective altruism. “Our default attitude should be that, if a social program is going to be rolled out on a large scale, then it should have been proven to be effective first.”13 MacAskill suggests five questions, which, paraphrased, offer a guide to making social programs more rational: (1) What does the intervention do? (2) How cost-​ effective is each intervention? (3) How robust is the evidence behind each intervention? (4) How well is each intervention implemented? (5) Does the intervention warrant additional funding?14 The answers to these questions provide an opportunity to rebuild the nation’s social infrastructure. To be sure, while there are no perfect interventions, there are better social programs; accordingly, it is the obligation of providers using charitable contributions and government funding to optimize social care. Identifying the mechanism for optimizing social interventions reprises the issue of epistocracy versus democracy. As there are no permanent solutions to the issue, the best any open society can achieve is respecting and amplifying processes for renewal. As Kwame Anthony Appiah has observed, the task is “to manage human irrationality, not to eradicate it, and such efforts can be given old-​fashioned, rationalist names: good governance, prudent policy.”15 Toward that end, the following chapters review an accelerating movement of evidence-​based policy, with comments from leaders in the field interspersed. The prospect of improving the quality of social care by rigorous field experiments is not without controversy. Subjecting extant programs to RCTs will require that some be retrofitted, at the risk of being left by the wayside. The quality of professional education warrants significant upgrades if university training is to provide sufficiently skilled evaluators to mount RCTs. And, labor unions, such as the Service Employees International Union and the American Federation of State, County and Municipal Employees, will need to consider upgrading and reassigning members in accord with making social programs more effective and efficient. Thus, evidence-​based policy will surely generate debate; however, just as the introduction of organized social care during the Progressive Era disrupted a corrupt and

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complacent establishment, so empirically based interventions bring social services into the information age of the 21st century.

NOTES 1. Steven Pinker, Enlightenment Now (New York: Viking, 2018). 2. Pankaj Mishra, Age of Anger (New York: Farrar, Straus and Giroux, 2017), p. 51. 3. Jason Brennan, Against Democracy (Princeton: Princeton University Press, 2016), p. 14. 4. Brennan, Against Democracy, p. 18. 5. Justin Smith, Irrationality (Princeton: Princeton University Press, 2019), p. 194. 6. https://​nationalaffairs.com/​publications/​detail/​the-​constitution-​of-​knowledge 7. Tom Nichols, The Death of Expertise (New York: Oxford University Press, 2017). 8. Thomas Kuhn, The Structure of Scientific Revolutions (Chicago: University of Chicago Press, 1962). 9. George Soros, The Alchemy of Finance (New York: Wiley, (1987). 10. https://​www.gwern.net/​docs/​sociology/​1987-​rossi 11. Jon Baron and Isabel Sawhill, “Federal Programs for Youth: More of the Same Won’t Work” (Washington, DC: Brookings Institution, 2010): https://​www.brookings.edu/​opinions/​ federal-​programs-​for-​youth-​more-​of-​the-​same-​wont-​work/​ 12. https://​www.povertyactionlab.org/​na/​about 13. William MacAskill, Doing Good Better (New York: Penguin, 2016), p. 74. 14. MacAskill, Doing Good Better, p. 109. 15. Kwame Anthony Appiah, “Dialectics of Enlightenment,” New York Review of Books, May 9, 2019, p. 41.

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CHAPTER 5

Nurse-​Family Partnership

N

ursing care for low-​income families originated in New  York City during the Progressive Era. There, in response to the plight of poor immigrant mothers and their children, altruistic young women provided in-​home care. Josephine Baker, who developed the city’s Bureau of Child Hygiene, dispatched nurses to families in the ward with the highest child mortality rate, where one third of children died before age 5; within 3 years, New  York City’s child mortality rate dropped 40%. But, public health nurses, as they became known, were also concerned about the effects of disease on child development. In one instance, Baker recorded the prevalence of contagious disease among immigrant children: 40% had head lice, 20% had trachoma, and others suffered from scabies, ringworm, and impetigo. Public schools accelerated contagion, so nurses prohibited infected children from attending school until they were no longer contagious; however, truancy officers demanded that children attend school. To address the dispute, Baker consulted with Lillian Wald, a public health nurse who had established the Henry Street Settlement. Wald appointed another nurse, Miss Lina Rogers, to resolve the problem; seizing the moment, Rogers assigned nurses to public schools, establishing the first school-​nurse positions.1 An ardent progressive, Wald used her position as founder of Henry Street Settlement to advance causes for women and children. In collaboration with Florence Kelley, who had lived with Jane Addams at Hull House in Chicago, Wald established the Child Labor Committee, which came to the attention of President Theodore Roosevelt. A Republican progressive, Roosevelt authorized the first White House Conference on Children in 1909. National efforts on behalf of mothers and children ultimately led

Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

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to the establishment of the U.S. Children’s Bureau in 1912.2 Maternal and child health thus became a signature issue of the Progressive movement. Federal efforts to address the plight of poor children were included in the 1935 Social Security Act, which established family cash grants through Title IV as well as the Maternal and Child Health Bureau through Title V. In 1965, Head Start was inaugurated to provide preschool education and socialization for low-​income children, and it incorporated health screening. Despite these efforts, many children remained at risk. In 1974, the Child Abuse Prevention and Treatment Act was passed, underscoring the vulnerability of children; in 1997, the State Children’s Health Insurance Program was enacted, providing federal subsidies for acquiring healthcare for low-​ income children. Thus, through the 20th century, considerable efforts were expended to improve the development of children, especially among minorities of color, yet poor children continued to lag behind peers from affluent, white families. In 2000, the Committee on Integrating Science on Early Childhood Development, comprised of representatives from the National Academy of Sciences, the National Academy of Engineering, the Institute of Medicine, and the National Research Council, released a report lamenting the nation’s lack of progress in child well-​being: It is the strong conviction of this committee that the nation has not capitalized sufficiently on the knowledge that has been gained from nearly half a century of considerable public investment in research on children from birth to age 5. In many respects, we have barely begun to use our growing research capabilities to help children and families negotiate the changing demands and possibilities of life in the 21st century.3

Indeed, the United States trailed other nations with regard to child well-​ being. In 2013, the United Nations ranked the United States 26th among 29 “rich nations” on child development.4

DAVID OLDS

In 1970, David Olds, recently graduated from Johns Hopkins University, accepted employment as a teacher at a Head Start program in west Baltimore. The teaching position reflected what would be a significant change in his career trajectory. Initially, he had enrolled in Johns Hopkins to study in its prestigious international affairs program, focusing on development economics, but he became disillusioned with the distance from human

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interaction. Decades later, Olds would reflect on a career that had taken twists and turns. When I worked in inner city Baltimore, I thought poor kids really needed consistent love, affection, guidance, and nurturing—​and everything will work out hunky-​dory, and I soon realized that what we were doing with 4-​year-​olds was too little, too late. That led me to believe that simply focusing on early attachment was insufficient. While kids were taking naps, I was reading about human development and I came across the work of Uri Bronfenbrenner. I had the audacity to challenge some of the stuff he was stating. And he invited me to attend a lecture he was giving in DC. And eventually I ended up going to school at Cornell and studying with Uri. Honestly, I almost dropped out of graduate school because I felt that traditional academics was not action oriented enough for me. I really wanted to use academic skills to solve social problems.5

Working with poor black children certainly resolved that problem, but it presented another. The Head Start program was located in a church basement (with the children’s outside activities taking place in nearby Union Square) and was adequately staffed, and the children seemed to enjoy the activities; however, the benefit to children attending appeared to be undone once they returned home. As a young, white childcare worker in an African American community, Olds needed finesse to raise his concern about compromised outcomes, which he addressed by suggesting a curriculum from the Michigan Perry Preschool Project, which was attracting the attention of early childhood educators. Yet, the Perry Preschool curriculum did not address the needs of some of the Head Start children. Olds remembered two 4-​year-​olds who failed to benefit from the new methods:  a nonverbal child from a home where drugs were prevalent, and a child who feared naptime due to bedwetting associated with punishment at home. If the Perry Preschool curriculum was an improvement over the “glorified babysitting” that he observed early in his Head Start job, importing new methods seemed of limited benefit, ignoring problems children encountered at home. So Olds began searching for a more robust strategy. Thus, Bronfenbrenner’s “human ecology” approach, proposing that families were in dynamic interaction with teachers and others, intrigued Olds, suggesting an entire network that could be enlisted to enhance child development. Subsequently, Bronfenbrenner extended an invitation to Olds to study under him at Cornell, where Olds enrolled in 1972. Discontent with academic studies that subtracted from exposure to children remained a problem: Olds was on the verge of leaving the Ph.D. program,

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but Bronfenbrenner convinced him to stay. Then, Olds found a part-​time position at a program for children in nearby Elmira, the Comprehensive Interdisciplinary Developmental Services (CIDS—​an acronym Olds later found unfortunate since its pronunciation could be confused with SIDS, the acronym for sudden infant death syndrome).

NURSE-​F AMILY PARTNERSHIP

Impressed by Olds, the director of CIDS allowed the new doctoral student employee to develop a prevention program. Recalling his Baltimore Head Start experience, Olds designed an intervention that focused on families and prevention. The template that Olds proposed would become the Nurse-​ Family Partnership (NFP): • • • •

First-​time mothers would be targeted Services would be provided in the home Nurse visitors would work with mothers Intervention would begin during pregnancy.

This intervention strategy aimed to produce three outcomes:  improving prenatal health, enhancing child development, and advancing mothers’ life course by reducing the number of their future pregnancies, keeping them in school, and finding work for them. At the same time, Olds was determined to rigorously assess his prevention strategy. Having consumed Donald Campbell and Julian Stanley’s iconic Experimental and Quasi-​experimental Designs in Research as a graduate student, Olds insisted that the prevention program be evaluated as a field experiment: after a pretest, subjects would be randomly assigned to a test or control group, and the value of the intervention would be assessed by a subsequent posttest.6 The idea of a field experiment did not come naturally, Olds recalled: I hadn’t been provided any training in advanced clinical trials but was reading Campbell and Stanley. I  read it over and over again and was really impressed with the intellectual rigor. And I put together a proposal to the maternal and child health bureau while I was doing my dissertation, and submitted it, and it gave me a warm and fuzzy “no,” so I began exploring health resources in upper New York State.7

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Seeking funding for prevention research, Olds was initially offered $1.5 million in federal funding for a field experiment, but he turned down the money because he was not convinced he had all the components of the intervention worked out. So, he relied on support from the University of Rochester to mount the study. Satisfied that nurse family visiting was adequately formatted, Olds renewed his request for federal funding, which was granted, sufficient for the first 2 years of the study. Subsequently, the Robert Woods Johnson Foundation agreed to complement federal support in order to complete the Elmira project. Through CIDS, Olds recruited approximately 400 low-​income women to participate in a prevention study, with the control group receiving transportation to child well-​being screening, while the test group differed in also being visited by a nurse at regular intervals, beginning with pregnancy and until the child’s age of 2 years. After enrolling mothers in 1978, the study did not report preliminary outcomes until 1981, but the results were striking: the rate of child abuse and neglect for mothers visited by nurses was 4%, while that of the control group was 19%; mothers visited by nurses reduced smoking significantly, and among smoking mothers, preterm deliveries were reduced 75%. With suggesting outcomes from the Elmira project, Olds and his research team sought a replication in a midsize city that would contrast the predominately white population in upper New York State. Settling on Memphis, Olds began recruiting African American mothers in 1984; of 1,139 pregnant women selected for the prenatal phase of the study, 743 were followed through delivery, with about half assigned to control and test groups. By 1991, Olds had secured enough funding to initiate the study, once again combining Robert Wood Johnson Foundation and federal funds. The preliminary results favored mothers visited by nurses, who reported 23% fewer problems due to hypertension as well as fewer pregnancies and longer periods between pregnancies. Children whose mothers were visited by nurses had 80% fewer days of hospitalization. Having replicated nurse visiting of first-​time mothers in the African American community, Olds was expanding the generalizability of prevention among at-​risk mothers. Two tenets of the scientific method—​replication and skepticism—​ drove Olds to develop a third trial, focusing on pregnant Latinas as well as visits by paraprofessionals instead of nurses. Home visits by non-​nurse paraprofessionals had been proposed because paraprofessionals were less costly and they were more likely to have cultural affinity to mothers of color. Would paraprofessionals from the community perform better than professionally trained nurses? Invited by the Colorado Trust to consider

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a replication in Denver, Olds relocated to the University of Colorado in Denver in 1993. By the summer of 1995, 735 first-​time mothers (46% of whom were Latinas) had been randomly assigned to a control group as well as test groups receiving visits from registered nurses or paraprofessionals without college credentials. By 2002, the results of the Denver replication validated that professionally trained nurses were superior to paraprofessionals: nurse-​visited mothers had better employment outcomes and fewer pregnancies; the children of mothers visited by nurses had better language skills and superior behavioral control at ages 2 and 4. By contrast, mothers visited by paraprofessionals resembled the control group, who had received no visits; except for producing minimal improvement in measurable outcomes, the paraprofessionals made little difference to mothers and their children. NFP’s positive outcomes, rigorously assessed, attracted the interest of federal and state agencies. The Department of Justice obtained the approval of Olds to determine if NFP would reduce crime and incarceration. By 2006, NFP was operating in 20 states, serving 20,000 families. As word spread about superior outcomes among poor minority mothers, who had become the target of conservatives concerned about welfare dependency and other social dysfunctions, federal agencies and governors sought to replicate NFP in order to improve outcomes for at-​risk families. NFP was also popularized by Kate Boo’s New Yorker article, “Swamp Nurse.” For a year, Boo had followed a nurse in the Louisiana bayou, accompanying the nurse on visits to poor mothers and attending nurse meetings; her article presented a poignant portrait of the fragility of young mothers struggling with profound poverty. Echoing Olds, Boo observed, NFP is rooted in the pessimistic view of the future that awaits an American child born poor—​a sense that the schools, day care centers, and other institutions available to him may do little to nurture his talents. Shrewder, then, to insulate him by an exercise of uncommon intrusion: building for him, inside his home, a better parent.8

Momentum was building to deploy NFP nationwide.

IMPLEMENTATION

With a new Democratic administration in Washington, DC, federal legislation aimed at replicating NFP nationwide became unavoidable. At that juncture, Olds, insistent on the fidelity of NFP, determined to turn the

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initiative over to a nonprofit organization, which would permit him to focus on serving mothers in poor communities overseas. As Ron Haskins observed, the transition from RCT-​validated project to public program subjected NFP to the policy process, and that raised the issue of what constituted evidence-​based policy. Two elected officials weighed in with regard to home visiting, a Missouri Senator with intimate experience with Parents as Teachers (PAT), and an Illinois Representative promoting Home Instruction for Parents of Preschool Youngsters (HIPPY), although neither program had been validated by RCTs. Of equal import, the Home Visiting Coalition, comprised of NFP, PAT, HIPPY, the Children’s Defense Fund, the Child Welfare League of America, and Healthy Families, among others, had long advocated for community-​based interventions with low-​ income families. When the Obama Administration presented a preliminary budget, NFP was the initial focus, much to the apprehension of other programs represented in the Coalition. The primacy of RCT-​demonstrated interventions was resolved tentatively by the suggestion of tiered funding, through which programs demonstrated by more rigorous evidence received more funds. Other issues confounded the scaling up of NFP. A group of four prominent child development scholars submitted a letter questioning whether RCTs addressed replication at all. Among the signers was Ed Zigler, a Yale professor and architect of Head Start. While NFP optimally determined the effect of nurse intervention with first-​time mothers via RCTs, the generalizability of the intervention was limited to Elmira, Memphis, and Denver. Whether NFP would deliver the same outcomes elsewhere was speculative. Moreover, in limiting intervention to first-​time mothers, 60% of mothers with additional pregnancies were omitted; therefore, a universal program serving all prospective mothers would arguably be more viable politically. Another factor was how any nurse home-​visiting program would be integrated with Medicaid and State Child Health Insurance Programs, which varied with each state. With health care reform a priority for the Obama Administration, incorporating nurse home visiting could optimize implementation, especially if the NFP innovation were incorporated into what became the Affordable Care Act (ACA). Clearly, transitioning NFP from a small set of local programs to federal policy introduced formidable challenges. As home visiting navigated the legislative process, House and Senate committees struggled with what constituted evidence: RCTs, as in the case of NFP, or “good evidence” for programs demonstrated by quasi-​experimental designs (QEDs). During committee hearings, the NFP lobbyist annoyed Coalition members by arguing for programs validated by RCTs at multiple

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sites, effectively reserving funding for NFP and excluding programs not supported by RCTs. Ultimately, nurse family visiting was included in the ACA, which appropriated $1.5 billion over 5  years but prescribed tiered funding, so that 25% of the money was dedicated to “promising and new” programs, but 75% was reserved for programs demonstrated through RCTs or QEDs. Ron Haskins, later co-​chair of the Presidential Commission on Evidence-​based Policymaking observed, One of the greatest contributions of the Obama Administration to using evidence from social science to improve social policy was its two-​pronged strategy of reserving most of the money for programs that had strong evidence of success from rigorous studies and then requiring the entities implementing the programs to gather systematic evidence from rigorous evaluations on whether their programs were having intended impacts.9

Ultimately, federal agencies would develop protocols for optimal interventions, preferring RCTs over QEDs. Five outcomes were designated for program review: (1) improvement of maternal and child health, (2) prevention of child abuse and neglect, (3) improvement in school readiness, (4) reduced crime and domestic violence, and (5) coordination with other community-​based services.10 The ACA was subject to virulent attacks by conservative Republicans, leading several states to reject Medicaid expansion and jeopardizing what had become the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program, so public law was altered to permit nonprofit agencies to receive federal funds. As an exercise in sausage-​making, federal implementation of nurse home visiting had evolved, incorporating less rigorously evaluated programs, but reserving most funding for RCT-​validated programs, such as NFP. Thus, NFP had been instrumental in enshrining RCTs as the “gold standard” for program evaluation.

REPLICATION

MIECHV’s incorporation of tiered funding prioritized funding for programs demonstrated by experimental methods, conflating RCTs with QEDs. By standards of research rigor, however, the approach erred, because RCTs were far superior to QEDs, which lacked random assignment to a test or control group. To continue to press the need for the highest quality studies, comparable to those adopted by medicine and pharmacy, the nonprofit Social Programs That Work had ranked programs with respect to

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RCTs: rating as Top Tier the programs demonstrated by multiple RCTs; as Near Top Tier, programs evaluated by only one RCT; and as Suggestive Tier, programs reporting short-​term effects or outcomes that are short of statistical significance.11 Later, the Laura and John Arnold Foundation (LJAF, now Arnold Ventures) promised to fund all credible RCTs across a range of fields. In other words, if federal agencies were not willing to prioritize funding for RCTs, LJAF would, in order to replicate NFP’s success with regard to remediating other social problems.12 With regard to nurse home visiting, LJAF funded an RCT in Durham, North Carolina, through which Durham Connects (DC) provided home visiting services to low-​income mothers. In the initial RCT, researchers found “59% less total emergency medical care, including 18% fewer emergency room (ER) visits and 85% fewer hospital overnights.” Infants in the test group were half as likely to be presented to the ER. Benefits accrued across demographic subgroups. DC benefits eclipsed costs, saving $3.02 for each $1.00 expended, primarily through reduction in ER care. A subsequent low-​ cost RCT extending DC to all families in Durham reported mixed results.13 The most ambitious NFP replication is underway in South Carolina, a “pay for success” collaboration involving MIT’s Abdul Latif Jameel Poverty Action Lab (J-​PAL), Social Finance, the South Carolina Department of Health and Human Services, NFP, and a consortium of funders. Serving poor mothers in 29 of the state’s 46 counties, the project pairs nurses with 3,200 first-​time mothers in order to evaluate specific, hypothesized program effects: reduced preterm births, reduced hospitalizations for mothers and infants, increased spacing between births, and increased number of poor mothers enlisted in NFP. Under pay for success, investors contract to be reimbursed if outcomes are achieved. In the South Carolina project, investors include the BlueCross BlueShield of South Carolina Foundation, the Boeing Company, LJAF, and a private consortium, advancing $17 million toward the $30 million project; South Carolina will contribute $7.5 million in success payments for attaining outcomes. Projecting outcomes in 2025, the South Carolina project will assess the value of statewide replication.14 Bipartisan support differentiated NFP from other social initiatives; few legislators were willing to criticize a program reflecting deeply held values related to “motherhood and apple pie.” A  not incidental factor was cost effectiveness. The Washington State Institute for Public Policy (WSIPP), created by law in 1983 to optimize state expenditures for social programs, has conducted cost–​benefit analyses for a range of social programs, including NFP. Not only did benefits accrue to taxpayers and participants, but also program savings exceeded costs, as depicted in Figure 5.1. RCTs may have validated NFP with researchers, but essential credibility for state

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Figure 5.1.  Nurse-​Family Partnership. http://​www.wsipp.wa.gov/​BenefitCost/​Program/​35

legislators was achieved through cost–​benefit calculations, documenting that the program was a sound investment. While NFP enjoyed support across the political aisle, state politics still tended to veer ideologically, impairing evidence-​based initiatives. Patrick Lester, director of the Social Innovation Research Center, identified six issues confounding evidence-​based policy:  the tendency of Democrats to favor social programs, while Republicans prefer limited government; interest-​group politics that impede rigorous review of popular programs; the fact that evidence-​based initiatives are unlikely to rank highly among the priorities of elected officials; bureaucracies that present multiple veto points to obstruct evaluation research; incremental budget procedures that preclude evidence-​based review, especially for entitlements; and the fact that time-​consuming federal waivers, necessary for entitlements, such as child welfare, may not be forthcoming.15 Despite these impediments, many states adopted evidence-​ based policymaking as part of their policy portfolio, although with varying degrees of enthusiasm. The Pew-​MacArthur Results First Initiative reviewed state performance, as indicated in Figure 5.2. Under the Obama Administration, the Office of Management and Budget (OMB) aggressively pursued evidence-​based policy. Federal agencies, including the Departments of Education, Labor, Justice, and Health and Human Services, adopted evidence-​based procedures. Reflecting on decades at OMB, Kathy Stack noted the incorporation of tiered funding: “Tiered-​ evidence grants, sometimes called innovation funds, constitute the leading example of outcome-​focused program design. This new approach to competitive grant-​making concentrates resources on programs with strong evidence of effectiveness, while also promoting innovation and further evaluation.”16 Stack joined LJAF as Vice President of Evidence-​ Based Innovation, adding to the robust network of evidence-​based advocates.

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Define levels of evidence

23

Inventory existing programs

29

Compare program costs and benefits

16

Report outcomes in the budget

21

1 29

13

Target funds to evidence-based programs Require action through state law

17

45

5 11

23

40

Total states

50

Total states

17

Total states

42

Total states

50

Total states

34

Total states

Number of states with advanced action in at least one policy area Number of states with only minimum action in at least one policy area

Figure 5.2.  Most states are engaged in evidence-​based policymaking. https://​www.pewtrusts.org/​en/​projects/​pew-​macarthur-​results-​first-​initiative

Complementing LJAF, the federal Administration for Children and Families established Home Visiting Evidence of Effectiveness (HomVEE), a clearinghouse for MIECHV in the United States and abroad, and including NFP, DC, Parents as Teachers, Early Head Start, and a dozen more. HomVEE reported innovation awards in nine states for 2017, totaling $17  million, with five states receiving $4  million the following year. For 2018, $361.3  million was awarded on a formula basis in all 50 states and the District of Columbia. In 2017, Johns Hopkins University was awarded $1.3 million to develop the Home Visiting and Research and Development Platform.17 Requiring state programs to produce “measurable improvements” on four of six “benchmark domains,” MIECHV promised to extend funding to an array of programs designed to improve the prospects of low-​income families; however, funding of programs not demonstrated by RCTs validated Haskins’s caution that NFP’s rigor had been compromised once subjected to the politics of maternal and child health advocacy. Essentially, MIECHV spread money around, placating advocates of poor minority families, but sacrificing science in the process, leaving LJAF to champion evidence-​based policy using RCTs as a standard.

CODA

During the Progressive Era, nurses were not alone in visiting poor immigrant families. Charity Organization Societies (COSs) dispatched “friendly visitors” to provide moral guidance to families new to America. Under the credo “Not alms, but a friend,” friendly visitors helped families struggling

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with not only adjustment to a new culture, but also often alcoholism, encounters with law enforcement, and grinding poverty as well. Eventually, COSs evolved into nonprofit family and children’s service agencies, providing professional services to a nascent social work profession. Working with troubled families presented a conundrum for social work, which split into different strategies for helping the immigrant poor: settlement house workers, such as Jane Addams, insisted on maintaining family integrity, while children’s services advocates, such as Charles Loring Brace, broke families up, placing children out of the home in a precursor to foster care. In the absence of innovation and rigorous research on plausible alternatives, these paradigms in child welfare endure. Under Title IV of the Social Security Act of 1935, which reimbursed states for cash benefits to poor children, services to families were sporadic, if not absent altogether. The Kennedy Administration promised to correct that omission with the 1962 amendments to the Social Security Act, which amplified social services in order to protect vulnerable children while assisting families to become more self-​sufficient. President Kennedy called for public welfare to focus on “prevention,” coinciding with the 1962 changes to the Food and Drug Administration, which, in response to the thalidomide tragedy, required drug companies to mount clinical trials for federal approval of medication. Thus, the idea of prevention through experimental methods was gaining ground nationally.18 Accordingly, the welfare amendments to the Social Security Act of 1962 “authorized the Secretary to waive any of the requirements for State plans in States that desire to carry on an experimental, pilot, or demonstration project” to realize the objectives of the amendments.19 In other words, states were permitted to explore innovations through experimental projects, yet the projects were not forthcoming. The influence of social work leaders was evident in the 1962 amendments. Increasing the federal match to 75% for states providing social services effectively penalized states that failed to incorporate social services, keeping them at the 50% federal match. The 1962 amendments also asserted that child welfare services would be provided through staff trained by institutions of higher education. Without identifying social work, the specification of a profession obviated by the Social Security Act, the presumption was that schools of social work would provide professional personnel. Finally, foster care became an entitlement, the need for out-​of-​home care determined by the assessment of public welfare staff committed to the well-​being of children receiving public assistance.20 The 1962 amendments thus amplified the role of social work in public welfare, but with unintended consequences. Although professional social

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services were intended to enhance family functioning, funding formulas provided incentives for child welfare professionals to place children in foster care, breaking up families. Burgeoning schools of social work, subsidized by Title IV training funds, conveniently neglected to conduct research on the outcomes of social services. Rather than use science to identify superior interventions, social work subscribed to new, fashionable interventions, on occasion favoring maltreated children, on another promoting family reunification. The social debris mounted. In retrospect, the 1962 amendments served to replace “friendly visitors” with social work professionals, although the outcome often detracted from family welfare insofar as children were removed from their homes and were placed in foster care. Regardless, riding the wave of an expanding welfare state, social work thrived. The Nixon Administration reined in social services through the 1974 amendments to the Social Security Act, which separated social services from cash benefits, while at the same time capping social services at $2.5 billion through a new Title XX funding category. Chafing at the family budgeting required by public welfare grants, social work leaders were grateful to focus on social services, although they ignored the conversion of social services to a discretionary allocation, which would not increase in coming decades.21 Still, the Title IV child welfare components remained intact, encouraging states to remove vulnerable children from their homes in favor of foster care, boosting state revenues, and subsidizing schools of social work training child welfare professionals. Subsequent child welfare legislation—​ the Child Abuse Prevention and Treatment Act of 1974, the Adoption Assistance and Child Welfare Act of 1980, the Promoting Safe and Stable Families Act of 2001, and the Fostering Connections to Success and Increasing Adoptions Act of 2008—​ reflected vacillation between protecting vulnerable children and keeping families intact, while failing to insist on rigorous research to demonstrate the efficacy of either strategy through RCTs. Subsequently, professional child welfare staff, trained at schools of social work, intervened with troubled families, often removing children, but with minimal guidance from research. Contrary to training in other disciplines, such as nursing and public health, schools of social work failed to make a research thesis even an option for completion of the terminal degree, the Master of Social Work (MSW), let alone a requirement. Social work had become research averse.22 Equally profound, social work, which was initially informed by poverty as a result its inception with “friendly visitors” among destitute immigrants and later via professional engagement with public welfare recipients, gradually abandoned the poor in favor of private practice, replacing the

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minority poor with the white middle class. On the cusp of welfare reform, two academics published Unfaithful Angels, contending that “social work has abandoned its mission to help the poor and oppressed and to build community” in favor of private practice. There has been an increasing tendency of the [social work] profession to use its political power to support licensing of clinical social workers and third-​party payments for social workers who are so licensed, to the relative neglect of efforts to improve the lot of social workers employed in the public social services and their clients.23

At the same time, the nation was absorbed in a campaign to reform welfare, with states contracting for RCTs to evaluate waivers from Aid to Families with Dependent Children. Although all states had established MSW programs, social work’s retreat from poverty meant that no received funding to evaluate public welfare, in the process forfeiting tens of millions of dollars in research funding that was diverted to commercial research firms instead.24 Just as social work turned its back on the poor, the profession dabbled in postmodernism, an ersatz philosophy romanticizing the idiosyncratic narratives of oppressed minorities, while derogating the privileges of white males who, it was alleged, had crafted science as a mechanism to diminish the marginalized. Having dismissed science as a bastion of male privilege, the harridans of postmodernism denigrated heroines in American social policy, including Alice Rivlin, Rebecca Blank, Alice O’Connor, and Kathryn Edin. For the academically weak faculty and mathematically challenged graduate students populating schools of social work, postmodernism has been a perfect fit for promotion of the former and graduation of the latter. Complemented by the minimal expectations that graduate students be “evidence informed” as opposed to “research competent,” schools of social work graduated generations of professionals incapable of mounting state-​ of-​the-​art research, including RCTs.25 Flabby ethics further compromised social work’s professional stature. Early in its history, social workers were engaged in questionable conduct, including affirming that Carrie Buck, an infant, suffered from genetic cognitive impairment, an essential finding for the 1927 Supreme Court decision Buck v.  Bell, which authorized the involuntary sterilization of thousands of poor women. Currently, this ignoble legacy is continued as social workers separate immigrant children from their immigrant parents and place them in institutional holding facilities or in foster care. In this

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instance, social workers, in collusion with other professions pledged to “do no harm,” are damaging Latino families seeking asylum to which they are legally entitled, in contravention to professional ethics as well as US law. As a result of Trump Administration policies, 2,400 children were “in custody” in September 2017, with 12,800 in federally contracted shelters.26 Instead of launching an investigation into unprofessional practice, human service professions, social work among them, are complicit in destroying thousands of families, while nonprofits rake in millions of dollars in federal contract fees.27 Improbably, the tragedy at the US southern border is mirrored by the comedy of social work’s plunge into bizarre practice methods. Trolling the Internet, two New York University professors identified 418 questionable interventions by fully certified social workers, including an angel communicator, a certified flower and gem essence therapist, a user of healing cards, a promoter of moxibustion, one pledging to remove spirits from homes, and a soul detective®.28 Social work has slipped its mooring not only with respect to poverty, but also with reality as well. Fundamentally, the problem is institutional; in America, professions as well as their university training programs are autonomous, managed independently of government. The professional remit, in other words, ensures that those holding a monopoly on human services have been exempted from lay oversight in exchange for their commitment to advance the public’s welfare. If professions, such as social work, avoid optimal research designs, as well as indeed damage vulnerable minority families, they enjoy the latitude to do so, and the public has little recourse to correct the profession’s dereliction. Thus, even when evidence-​ based interventions demonstrate positive and cost-​effective outcomes by way of RCTs, professions are free to elide them and roam into a surreal netherworld instead. This calamity might well have been avoided with a judicious exercise of empiricism and ethics in professional service. David Olds looms large as an exemplar. A half century ago, as a young man in Baltimore and uncertain about realizing his ambitions, he decided to design a family-​friendly, community-​based intervention to improve the lot of first-​time mothers and their children, subsequently testing the intervention by field experiments in three sites, while social work, also rooted in home visiting, elected to ignore, if not derogate, RCTs, favoring entitlements that arguably damaged disproportionately poor minority families but provided decent salaries to professionals. One can only wonder what might have transpired had social workers been as creative and committed as David Olds.

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NOTES 1. S. Josephine Baker, Fighting for Life (New York: New York Review of Books, 1939). 2. Theda Skocpol, Protecting Soldiers and Mothers (Cambridge, MA: Harvard University Press, 1992); Linda Gordon, Pitied But Not Entitled (Cambridge, MA: Harvard University Press, 1994). 3. Committee on Integrating the Science of Early Childhood Development, From Neurons to Neighborhoods (Washington, DC: National Academy Press, 2000), p. 2. 4. https://​www.unicef-​irc.org/​publications/​pdf/​rc11_​eng.pdf 5. Interview with David Olds, January 17, 2019. 6. Donald Campbell and Julian Stanley, Experimental and Quasi-​experimental Designs in Research (1963). 7. Interview with David Olds, January 17, 2019. 8. Katherine Boo, “Swamp Nurse,” New Yorker, February 6, 2006, p. 54. 9. Ron Haskins and Greg Margolis, Show Me the Evidence (Washington, DC: Brookings Institution, 2015), pp. 45–​46. 10. Haskins and Margolis, pp. 31–​58. 11. https://​evidencebasedprograms.org/​ 12. https://​www.arnoldventures.org/​work/​evidence-​based-​policy 13. https://​osf.io/​3ys4m/​ 14. https://​www.scdhhs.gov/​sites/​default/​files/​2-​16-​16-​SC-​NFP-​PFS-​Fact-​Sheet_​ 3.pdf 15. Patrick Lester, “Managing toward Evidence: State-​Level Evidence-​Based Policymaking and the Results First Initiative,” The Annals of the American Academy of Political and Social Science, (July 2018), vol. 678, 97–​98. 16. Kathy Stack, “The Office of Management and Budget: The Quarterback of Evidence-​Based Policy in the Federal Government,” The Annals of the American Academy of Political and Social Science, (July 2018), vol. 678, 114. 17. https://m ​ chb.hrsa.gov/​maternal-​child-​health-​initiatives/h ​ ome-v​ isiting-o ​ verview 18. https://​www.fda.gov/​ForConsumers/​ConsumerUpdates/​ucm322856.htm 19. Wilbur Cohen and Robert Ball, “Public Welfare Amendments of 1962 and Proposals for Health Insurance for the Aged,” Social Security Bulletin: https://​ www.ssa.gov/​policy/​docs/​ssb/​v25n10/​v25n10p3.pdf 20. Cohen and Ball, Social Security Bulletin. 21. https://​www.finance.senate.gov/​imo/​media/​doc/​social8.pdf 22. David Stoesz, “The Child Welfare Cartel, Redux,” Research on Social Work Practice (September 2016), vol. 26, no. 5. 23. Harry Specht and Mark Courtney, Unfaithful Angels (New York: Free Press, 1994), p. 107. 24. David Stoesz, A Poverty of Imagination (Madison, WI: University of Wisconsin Press, 2000). 25. David Stoesz, Howard Karger, and Terry Carillio, A Dream Deferred (New Brunswick, NJ: Transaction, 2010). 26. Caitlin Dickerson, “Detention of Migrant Children Has Reached the Highest Level Ever,” New York Times, September 12, 2018: https://​www.nytimes.com/​ 2018/​09/​12/​us/​migrant-​children-​detention.html

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27. Kim Barker, Nicholas Kulish, and Rebecca Ruiz, “He’s Built an Empire, with Detained Migrant Children as Bricks,” New York Times, December 2, 2018: https://​www.nytimes.com/​2018/​12/​02/​us/​southwest-​key-​migrant-​children. html 28. Gary Holden and Kathleen Barker, “Should Social Workers Be Engaged in These Practices?” Journal of Evidence-​Informed Practice (January 2018): https://​www. tandfonline.com/​doi/​full/​10.1080/​23761407.2017.1422075

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CHAPTER 6

The Abecedarian Project

S

ince the Enlightenment, thinkers have examined childhood with the hope that problems, once identified, could be prevented in order to enhance human development. Early industrialization required parents to work, prompting Europeans to develop centers for learning and play, which Friedrich Frobel labeled “kindergarten” in 1840; women trained by Frobel spread the model throughout the Continent.1 In 1907, Maria Montessori opened the first child-​centered school, based on her observations of children and emphasizing children’s intuitive interest in their environment.2 Contemporaneously, Jean Piaget, having observed his own children’s development, proposed four stages of childhood: the motor stage, the egocentric stage, the cooperative stage, and finally a stage of codification of the rules.3 Invariably, theories of child development spanned Freud’s notion of an intrapsychic process, which was not observable, and therefore defied empirical validation. Erik Erickson, for example, drew from both orientations in proposing a post-​Freudian sequence of conflict resolutions following life stages: Trust v. Mistrust from birth to 2, Autonomy v. Shame from 2 to 4, Initiative v. Guilt from 5 to 8, Industry v. Inferiority from 9 to 12, Identity v. Role Confusion from 13 to 19, Intimacy v. Isolation from 20 to 39, Generativity v. Stagnation from 40 to 59, and Ego Integrity v. Despair above age 60.4 In focusing on childhood, Erickson’s model mirrored Piaget’s, and both became preeminent in 20th-​century psychology. While models of childhood development proved marketable for therapists, researchers remained uncertain about their epistemic base. Observations might be crosschecked by colleagues and statistical methods might be employed to differentiate children by gender, ethnicity, and race, Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

but childhood remained blurry, as did interventions to reorient young miscreants. Building knowledge about child development faltered primarily because the field eschewed the experimental proofs that had become standard in medicine and pharmacy, both proximate to childhood studies. That omission would be corrected in the 1960s.

PERRY PRESCHOOL

Drawing on Piaget’s theory, David Weikart mounted an experiment in Ypsilanti, Michigan, to determine the benefit of an ambitious preschool curriculum among poor, largely African American children. At Perry Elementary, with the consent of the state’s first African American principal, Weikart randomly assigned children to a control group or a test group that was instructed by teachers each weekday morning. Certified teachers were responsible for different activity areas, “focusing on key experiences in logic and mathematics, language and literacy creative representation, music and movement, social relations, and initiative.”5 Teachers also partnered with individual parents to reinforce objectives of the preschool curriculum. “Through weekly home visits and group meetings, the staff functioned as experts in principles of child development and treated parents as experts on their own children.”6 From the 1962–​63 to 1966–​67 school years, 58 children participated in the program test group, compared to 65 in the control group. The follow-​up of children revealed significant benefits attributable to the preschool intervention. At age 27, 84% of program-​group females had graduated from high school, compared to 35% of controls. Inauspiciously, there was no comparable benefit for intervention-​group males. Control-​ group participants averaged 4.6 arrests, compared to intervention-​group members’ 2.3 arrests. While 29% of program-​group members earned more than $2,000/​month, only 7% of controls did so. Marriage rates followed the pattern: 40% of program females were married by age 27, compared to 8% of controls. Accordingly, “significantly fewer program-​group members than no-​program group members received welfare assistance as adults (59% versus 80%).”7 At age 40, program-​group members reported 33% fewer arrests, 46% less time incarcerated, 42% higher median monthly income, and 26% less welfare receipt, compared to controls.8 The cost of Perry Preschool was $12,356 per participant, an amount eclipsed by savings of $88,433, primarily due to avoiding incarceration, yielding a benefit–​cost ratio of 7:1. While students in the intervention group were more likely to prosper along several social dimensions, the

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savings were often due to factors external to education, such as arrests/​incarceration and welfare receipt. The Perry Preschool experiment operated just as Head Start was being deployed, providing an approximate cost comparison: in 1994, Head Start spent $4,491 per child, significantly less than spending on the Perry participants. Thus, a significant question was: Would Perry Preschool outcomes hold up in comparison to Head Start outcomes, which were obtained at less expense but were less rigorously evaluated?

HEAD START

Launched as a summer program in 1965, Head Start soon became a signature program of President Johnson’s War on Poverty. Dr. Edward Zigler, a psychologist, Director of the Yale Child Study Center, and co-​founder of Head Start, convinced the Johnson Administration to offer the preschool program year-​round.9 With the dismantling of the Office of Economic Opportunity, Head Start was transferred to the Department of Health and Human Services, where, along with other federal childcare programs, it has flourished. In 1994, Early Head Start was introduced, to serve children from birth to 3. By the cusp of the new millennium, Head Start and related childcare programs consumed $15 billion in federal funds.10 Currently, Head Start serves 30 million families in all 50 states and other jurisdictions in the United States.11 Unlike some antipoverty programs, such as Job Corps, Medicaid, and Food Stamps, which attracted criticism from conservatives, Head Start enjoyed wide popularity and was therefore less vulnerable to budget cuts. Regardless, research on program effectiveness has been less than convincing, initially identifying a “fade-​out” effect: the early benefits of Head Start vanished after only a few years. A 2002 randomized controlled trial of 4,667 children, for example, found that cognitive development attributed to Head Start vanished by the end of first grade.12 Subsequent analysis of long-​term benefits was more positive. For example, a Brookings Institution study, based on administrative data, compared Head Start children with their siblings not enrolled in the program and concluded that Head Start conferred improved educational outcomes, improved behavior and self-​ esteem, and improved parenting for low-​education mothers of color.13 As part of its remit to evaluate social programs optimal for citizens, the Washington State Institute for Public Policy conducted a meta-​analysis of early childhood programs, comparing Head Start with related initiatives, as depicted in Figure 6.1.

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Increase in outcome

Decrease in outcome

Effect size

1

0.5

Grade Special retention education

Crime

Teem births

0

–0.5

Test scores

SelfEmotional regulation development

High school graduation

–1

–1.5

Outcome State and district pre-kindergarden Head Start Model programs 95% confidence intervals are shown for each effect size

Figure 6.1.  Results of a meta-​analysis of early childhood education for low-​income 3-​and 4-​year  olds. http://​www.wsipp.wa.gov/​ReportFile/​1547/​Wsipp_​Early-​Childhood-​Education-​for-​Low-​Income-​Students-​A-​ Review-​of-​the-​Evidence-​and-​Benefit-​Cost-​Analysis_​Full-​Report.pdf

Notably, Head Start compared unfavorably with Washington State preschool programs as well as with “model programs”—​in this analysis, the Perry Preschool experiment and the Abecedarian Project. Model programs excelled at generating higher test scores and high school graduation, while reducing grade retention, crime, and teen births. Equivocal performance of Head Start, despite decades of federal funding in the billions of dollars, prompted Congress to pass legislation requiring competitive bidding for the bottom 10% of programs. An instrument developed by the University of Virginia assessed teaching quality with respect to instructional and emotional support as well as classroom organization. When the instrument was applied to the 1,600 Head Start programs, 120 forfeited all or a portion of their funding. While more Head Start programs showed improvement since introduction of the decimation reform strategy, skeptics noted that student achievement was not addressed. “I’m skeptical because so many people over the years have made dramatic claims for preschool programs that didn’t pan out—​we need to show the program is having a long-​term impact on test scores and graduation rates,” argued Ron Haskins, co-​chair of the Presidential Commission on Evidence-​based Policymaking. “Those are the things that count.”14

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CRAIG RAMEY

From the beginning, Craig Ramey, a psychologist with a scientific bent, envisaged the Abecedarian Project as an experiment. Years later, he observed, If you’re interest in learning if something works or not, there’s no substitute for an experiment. I always had an experimental orientation from a scientific point of view an observational study just didn’t pass muster. I’m a scientist trained in experimental methods, so it was clear that if you wanted to address the issue adequately it would have to be an experiment; you need to do an RCT.15

Authors of the Perry Preschool experiment had suspected that a full-​ time, 5-​days-​a-​week program would probably not detract from benefits to participants,16 a prospect that Craig Ramey seized upon in launching the Abecedarian Project in 1972 in Chapel Hill, North Carolina, a university town with a sizable low-​income African American population. Ramey’s multiple motivations, grounded in social justice, broadly understood, are worth quoting at length: First was the Brown v. Board of Education decision in 1954 that declared separate but unequal school systems for blacks and whites to be unconstitutional. Second was the Civil Rights Legislation in 1965 and 1967 that outlawed racial discrimination in voting, employment, housing, and inter-​racial marriage. Third was the War on Poverty proposed by President Lyndon B. Johnson in 1964 with an emphasis on community action that included Head Start and later Early Head Start. Fourth was the creation of Welfare Reform now known as Temporary Assistance for Needy Families (TANF) proposed by President Clinton in 1997 with its work and educational requirements for mothers. Fifth was the creation and expansion of second-​wave feminism from roughly the 1960s through the 1980s with its emphasis on women’s equality of opportunity and pay. Collectively these and other trends continue to influence public policy with regard to social, educational, and health disparities.17

Ramey wanted to test the effect of an intensive education/​socialization program on poor minorities beginning at birth. To identify the most disadvantaged families, Ramey employed a high-​risk index, comprised of 13 factors, including maternal and paternal education levels, family income, absence of father from the home, poor social or family support for the mother, indications

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that older siblings had academic problems, the receipt of welfare, parents working at unskilled jobs, indications of low parental IQ, family members seeking counseling, and other evidence of a need for support from community agencies.18

The recruitment method countered the tendency of researchers to engage in “cream skimming,” preferring subjects most likely to benefit from an intervention. During the last 3  months of pregnancy, eligible mothers with high-​ risk scores were identified for participation. At their infant’s birth, the typical mother was 20 and had less than a high school education; 13 mothers had IQs below 70. Of 111 healthy infants, 59 girls and 52 boys were enrolled in the Abecedarian Project at 6 weeks of age; infants were admitted in four annual cohorts of about 28 children each, half assigned to the intervention group, half to the control group. Infants in the control group received pediatric evaluations, nutritional supplements, and referral to community services by social workers, while the intervention group received these services in addition to an early education program, consisting of educational games emphasizing language and cognitive skills under the supervision of teachers, 5 days a week. The intervention was year-​round and featured low teacher:child ratios of 1:3 for infants and 1:6 for 5-​year-​olds. As was the case with the Perry Preschool outcomes, the Abecedarian test group showed significant improvement over controls in adulthood. At age 30, adults who had been in the Abecedarian test group were 42% more likely to have been employed, 81% less likely to have received welfare, and 378% more likely to have graduated from college, and they were 1.8 years older than controls upon the birth of a first child. Yet, Ramey et al. concluded the sizable benefits of Abecedarian, especially language and math as well as sustained IQ scores over time. Equally important, intensive preschool interventions countered the fade-​out effect:  “For the Abecedarian and Perry Preschool studies, statistically significant academic benefits related to preschool programs were maintained into adolescence, long after treatment had ended.”19 Finally, Abecedarian researchers concluded that intensive preschool was affordable; at about $6,000 per participant (in 1998), “the costs are reasonably consistent with current public school costs in a typical school system.”20 Yet, much of the benefit attributed to Abecedarian did not accrue to public elementary and secondary schools, requiring their superintendents to budget more for intensive preschool.

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REPLICATION

Subsequently, Ramey replicated the Abecedarian approach in a dozen sites: an additional experiment in Chapel Hill (CARE), plus RCTs in Boston, New Haven, Bronx, Philadelphia, Miami, Little Rock, Dallas, and Seattle. The latter experiments comprised the Infant Health Development Program (IHDP), which reported on outcomes for 985 low-​birth-​weight and premature infants. A significant departure from early Abecedarian approaches, IHDP included a second control group, which was assigned home visitors who provided maternal support as well as games, books, and toys for children. A  series of tests—​the Stanford Binet Intelligence and McCarthy Scales of Children’s Abilities—​found that only the Abecedarian children benefited; the control and home-​visitors groups produced no discernable positive effects. Moreover, at age 36  months, low-​birth-​weight and premature infants attained significant gains in median IQ scores. Ramey et al. reported, Essentially, the Abecedarian educational program in the first 3  years of life “leveled the playing field” for these low birth weight, premature children and enabled them to perform at levels slightly higher (IQs of 104–​107) than the national average at these years of age. In other words, the early educational treatment produced outcomes that overcame the cognitive “disadvantage” associated with low maternal education.21

The Abecedarian approach also reinforced, rather than detracted from, parental relationships, as depicted in Figure 6.2. Subsequently, Ramey and colleagues recalled Abecedarian participants to determine the extent to which, as adults, their moral compass may have been affected: In a repeated-​play ultimatum game, [Abecedarian] participants who received high-​quality early interventions strongly reject[ed] unequal division of money across players (disadvantageous or advantageous) even at significant cost to themselves. Using a multi-​round trust game and computational modeling of social exchange, . . . the same intervention participants also plan[ned] further into the future.

As a result of intensive early intervention, children became not only more compassionate, but also more deliberative about their futures. As an expert in child development, Ramey was tapped to evaluate Head Start. Decades later, he recalled, “George Bush and Ted Kennedy recruited

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Educational Group has more “very close” relationships with mothers 69% 80% 70% 60% 50%

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Proportional differences are significant X2(1, N = 78) = 8.403, p < 0.01.

Educational Group has more “very close” relationships with fathers

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14%

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Proportional differences are significant X2(1, N = 78) = 4.997, p < 0.05. Control (N = 36)

Educational (N = 42)

Figure  6.2.  Craig Ramey, “The Abecedarian Approach to Social, Educational, and Health Disparities,” Clinical Child and Family Psychology Review (2018) 21, p. 540.

me to Georgetown where I chaired a commission on Head Start; the idea was to realign Head Start with research literature. Early Head Start was already under way, influenced by Abecedarian.” Subjecting academic research and national politics proved a jarring experience, Ramey recalled, “We

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escaped Washington before we became terminally cynical.” Yet, he stays current on issues related to child development. For example, the recent culling of substandard Head Start programs met with his approval: I am of the view that all programs should be on a competitive basis at some point. Even good programs can improve, from a political point of view because programs were created from liberal support, the tragedy becomes something that was untouchable in terms of change; it became an existential issue rather than a way to introduce continual quality improvement.

Ramey also endorsed carefully targeted programming as opposed to universal approaches. The biggest benefits come to people in the most challenging circumstances; it’s clear that benefit for children participating in high quality, intensive programs, but nor for college-​educated families, whose kids are not at risk. To compensate for affluent children’s advantage, you’ve got to commit a year to accelerate development of poor children, to the extent one’s able to do that.

With regard to field experiments, Ramey sees important, but qualified benefits. “RCTs are indicated only when you don’t know the answer to a question,” he observes. Design is crucial: “A half-​baked RCT is a waste of money.” Finally, administrative data can lower the cost of RCTs, making them more plausible than when he deployed the Abecedarian Project. In sum, “an RCT is one tool in the [research] tool shed.”

ADVOCACY

As evidence spread about the value of early childhood education (ECE), Nobel Laureate in economics James Heckman decided to champion the cost effectiveness of investments in children as an issue. He established a website and, funded by the Pritzker Children’s Foundation, calculated the return on investment (ROI) of children’s programs.22 Reviewing the ROI of the Abecedarian Project and a similar intervention, Heckman concluded that the ROI of early childhood programs was 13%, a finding greater than earlier estimates. The logic of Heckman’s analysis is depicted in Figure 6.3. By far the greatest social benefit is attributed to crime reduction. Later, Heckman concluded that ECE initiatives, such as the Perry Preschool program, benefited not only participants, but their children as well, documenting generational effects.23

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100,000’s (2014 USD)

4.5

3

1.5

0

←... Components of Total Benefits ...→

–1 Program Costs

Total Benefits

Labor Income Parental Labor Income

Net Present Value

Crime

Quality of Adjusted Life Years*

Significant at 10%

Per–annum Rate of Return: Males and Females 13.7% (SE, 3%). Benefit–cost Ratio: Males and Females 7.3 (SE, 1.8).

Figure 6.3.  Net present value of main components of the pooled (over gender) cost–​benefit analysis over the life cycle per program participant. https://​heckmanequation.org/​assets/​2017/​12/​abc_​comprehensivecba_​JPE-​SUBMISSION_​2017-​05-​26a_​sjs_​ sjs.pdf

Heckman’s stature contributed significantly to advocacy for ECE, at both the federal and the state level. For years, the Annie E. Casey Foundation had produced Kids Count, an annual ranking of states with regard to variables reflecting poverty, health, and education, as well as family and community. In 2018, for example, 52% of 3-​and 4-​year-​olds were not in school, representing 4.3 million children, an indication of a population that would benefit from ECE.24 A similar strategy was adopted by Zero to Three, which ranked states in its State of Babies Yearbook, clustering variables around “good health, strong families, and positive early learning experiences.” Of children below the federal poverty level, only 7.0% had access to Early Head Start.25 Think tanks also weighed in with proposals to advance ECE. New America, for example, featured a complement of four staff dedicated to early and elementary education and undertook a stream of studies documenting its pro-​ECE stance. Among those was an ambitious study in North Carolina, the host of the Abecedarian Project decades earlier. NC-​PreK, the merger of two early programs, Smart Start (SS) and More at Four (MF), serves 900,000 middle school students. The study focused on students who were

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retained a grade as well as those referred to special education. “The MF program reduced the probability of grade retention among students in Grade 8. The SS program reduced the probability of repeating the eighth grade, but there were no effects on grade repetition in grades 6 and 7,” researchers concluded. Both the SS program and the MF program reduced the probability of repeating a grade at least one time between Grade 3 and Grade 8. Both SS and MF programs reduced the probability of receiving special education services when students were in Grade 6, Grade 7, and Grade 8.  The two programs also decreased the probability of ever receiving special education services since Grade 3.

Researchers ended their report with this statement: “Investments by the State of North Carolina in each of these programs have produced long-​term positive impacts on targeted children that last through at least the end of middle school and do not fade out over time.”26

CODA

Childcare, which overlaps ECE, operates under multiple sponsors, each with its own network of providers. Head Start programs, for example, are often operated by nonprofit organizations, funded by government. Metropolitan governments as well as for-​profit companies also provide care. Formal childcare providers must comply with a modicum of standards; however, the large portion of childcare, including care for infants, is provided informally by relatives and neighbors, an informal network that often flies beneath the governmental radar. The complexity of the childcare non-​system presents formidable challenges for reform. Regardless, the import of childcare/​ECE is becoming more obvious as scholars and organizations understand child development better. A  succinct portrait is provided by researchers of the Brookings Institution, who plotted the likelihood that children would enter the middle class by income quintile. Depending on life-​stage period, cohorts of children and young adults vary considerably in their prospects of entering the middle class, on average about half as likely as the top quintile; however, children of color are decidedly disadvantaged compared to their Anglo peers, as shown in Figure 6.4. It follows that addressing the disparities in childcare/​ECE requires quite different strategies. Following an entitlement agenda, as illustrated by Social Security and Medicare, some advocates opt for a universal approach.

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Percent Meeting Benchmark

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Transition to Adulthood (Age 29)

Adulthood (Age 40)

30% 20% 10% 0% Early Childhood (Age 5)

Middle Childhood (Age 11) White

Adolescene (Age 19) Black

Hispanic

Figure 6.4.  Percent succeeding at each life stage by race/​ethnicity. Isabel Sawhill, Scott Winship, and Kerry Grannis, Pathways to the Middle Class (Washington, DC: Brookings Institution, 2012): https://​www.brookings.edu/​wp-​content/​uploads/​2016/​06/​0920-​pathways-​middle-​class-​ sawhill-​winship.pdf

Katha Pollit, for example, notes that care for a single child is out of reach for many families, with the cost consuming significant amounts of a family’s income: 37.7% in Georgia, 18.7% in Massachusetts, and 17.8% in Minnesota. Obviously, childcare expenses exact a toll on family finances, with formal care siphoning off most of a second parent’s earnings, often the mother’s. For more than half of mothers of young children, universal childcare would be timely, proponents argue.27 Subsequently, presidential candidate Elizabeth Warren proposed a nationwide network of local childcare centers, charging parents on a sliding scale—​poor families would pay nothing, but no family’s costs would exceed 7% of income—​with total costs projected at $1 trillion over a decade.28 Modeled after the Department of Defense childcare and Head Start, Warren’s approach would ensure universal access, include pre-​K , and enhance staff qualifications.29 But is federal spending of $100 billion a year a good investment for children, given the mixed childcare economy? Grover “Russ” Whitehurst, a Brookings Institution scholar, proposed a “good enough” preschool model. Citing research demonstrating that not all pre-​K programs deliver optimal outcomes, particularly those evaluated by RCTs where the control group performs better than the experimental group, Whitehurst advocated investing in centers serving low-​income children: “Studies of different groups of preschoolers often find greater improvement in learning at the end of the pre-​k year for economically disadvantaged children and dual language learners than for more advantaged and English-​proficient children.”30 “Good enough” childcare, in other words, should target children most at risk of failure with regard to education and socialization:

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From a reform perspective [good enough childcare] intends to reduce as much as possible environmental circumstances that are toxic for young children. It postulates a law of rapidly diminishing returns beyond the point of adequacy for investments in preschool interventions intended to enhance children’s cognitive abilities or personality traits.

The question with regard to ECE/​childcare is, What is the optimal reform agenda? A universal approach ensuring care for all children, or targeting those most disadvantaged? Given the convoluted non-​system of childcare in America, a salient factor is the quality of extant programs regarding staff qualifications. A  seminal audit study randomly assigned resumes to centers in 17 states, revealing that, while many centers required credentials and experience beyond state requirements, many centers also disregarded state regulations.31 What may, in practice, be optional state regulations regarding credentials and experience for childcare workers is compounded by the mixed results of Head Start identified above. Mediocre programming and staffing raise fundamental questions about the probity of investing tens of billions of dollars in a universal childcare initiative. In 2006, California voters rejected by a sizable margin a universal pre-​K program for 4-​year-​olds funded by a progressive tax on the wealthy.32

Indeed, the lesson from the Abecedarian Project is that public resources are better spent on the most disadvantaged children, for whom improved outcomes are greater, as opposed to more affluent and advantaged children whose parents are able to not only offer educational and cultural opportunities at home, but also arrange formal childcare for their children. If public resources are scarce—​a valid assumption into the future—​then childcare/​ECE funding would be better invested on the most disadvantaged children. An irony of child development programs is that good metrics regarding efficacy and efficiency support targeted interventions, while data are often ambiguous regarding mainstream programs, such as Head Start. Clearly, politics intrudes into social policy, as is evident in calls for universal childcare; however, evidence-​based policy provides data justifying a more discrete course of action.

NOTES 1. https://​en.wikipedia.org/​wiki/​Kindergarten 2. https://​en.wikipedia.org/​wiki/​Montessori_​education

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3. Don Martindale, The Nature of Sociological Theory (New York: Houghton Mifflin, 1960), pp. 364–​66. 4. https://​en.wikipedia.org/​wiki/​Erikson%27s_​stages_​of_​psychosocial_​ development 5. Lawrence Schweinhart and David Weikart, “High/​Scope Perry Preschool Program Effects at Age Twenty-​Seven,” in Jonathan Crane, ed., Social Programs That Work (New York: Russell Sage Foundation, 1998), p. 150. 6. Schweinhart and Weikart, p. 159. 7. Schweinhart and Weikart, pp. 153–​54. 8. https://​evidencebasedprograms.org/​document/​ perry-​preschool-​project-​evidence-​summary/​ 9. https://​en.wikipedia.org/​wiki/​Head_​Start_​(program) 10. Committee on Ways and Means, Overview of Entitlement Programs (Washington, DC: U.S. GPO, 2000), p. 599. 11. https://​www.acf.hhs.gov/​ohs/​about 12. https://​poverty.ucdavis.edu/​policy-​brief/​ short-​run-​fade-​out-​head-​start-​and-​implications-​long-​run-​effectiveness 13. https://​www.brookings.edu/​research/​ the-​long-​term-​impact-​of-​the-​head-​start-​program/​ 14. Jason DeParle, “Cleaner Classrooms and Rising Scores: With Tighter Oversight, Head Start Shows Gains,” New York Times, February 4, 2019: https://​ www.nytimes.com/​2019/​02/​04/​us/​politics/​head-​start-​preschool. html?action=click&module=Top%20Stories&pgtype=Homepage 15. Interview with Craig Ramey, March 13, 2019. 16. Schweinhart and Weikart, p. 158. 17. Craig Ramey, “The Abecedarian Approach to Social, Educational, and Health Disparities,” Clinical Child and Family Psychology Review, 2018, vol. 21, 528. 18. Craig Ramey, Frances Campbell, and Clancy Blair, “Enhancing the Life Course for High-​Risk Children: Results from the Abecedarian Project,” in Jonathan Crane, ed., Social Programs That Work (New York: Russell Sage Foundation, 1998), p. 160. 19. Ramey, Campbell, and Blair, p. 176. 20. Ramey, Campbell, and Blair, p. 179. 21. Ramey, p. 537. 22. https://​heckmanequation.org/​ 23. https://​heckmanequation.org/​resource/​ perry-​intergenerational-​effects-​summary/​ 24. https://​www.aecf.org/​m/​resourcedoc/​aecf-​2018kidscountdatabook-​2018.pdf 25. https://​stateofbabies.org/​wp-​content/​uploads/​2019/​03/​State_​of_​Babies_​ Yearbook_​national_​profile_​2.28.19.pdf 26. Kenneth Dodge, Yu Bai, Helen Ladd, and Clara Muschkin, “Evaluation of North Carolina’s Smart Start and NC-​PreK Programs: Follow-​Up Through Eighth Grade” (Raleigh, NC: Duke University, 2018), original emphasis: https://​duke. app.box.com/​s/​pw3zv27a2jkmfas2j183yg4ekamxzl8y 27. Katha Pollit, “Day Care for All,” New York Times, February 8, 2019: https://​ www.nytimes.com/​2019/​02/​09/​opinion/​sunday/​child-​care-​daycare-​democrats-​ progressive.html?action=click&module=Opinion&pgtype=Homepage 28. Jordan Weissmann, “Making Childcare Affordable Is an Extremely Obvious Way to Boost the Economy. Elizabeth Warren Gets That,” Slate, February 19, 2019: https://​slate.com/​business/​2019/​02/​elizabeth-​warren-​new-​child-​care-​proposal-​ real-​deal.html

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29. https://​www.warren.senate.gov/​imo/​media/​doc/​Universal_​Child_​Care_​Policy_​ Brief_​2019.pdf 30. Grover “Russ” Whitehurst, “A Good Enough Childhood,” Brookings Brief, December 20, 2018, original emphasis: https://​www.brookings.edu/​research/​ a-​good-​enough-​early-​childhood/​ 31. Chris Herbst, “Why Requiring Teacher Qualifications in Child Care Might Not Matter in Practice,” Brookings Brief, March 26, 2019: https://​www. brookings.edu/​blog/​brown-​center-​chalkboard/​2019/​03/​26/​why-​requiring-​ teacher-​qualifications-​for-​child-​care-​might-​not-​matter-​in-​practice/​?utm_​ campaign=Brown%20Center%20on%20Education%20Policy&utm_​source=hs_​ email&utm_​medium=email&utm_​content=71378569 32. https://​www.edweek.org/​ew/​articles/​2006/​06/​14/​40reiner.h25.html

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CHAPTER 7

Year Up

Y

oung adults who are not college bound represent a policy conundrum, insofar as they are not apt to earn enough to attain the American Dream, and their marginalization from the status quo invites social as well as political disaffection. Popular biographies have depicted the plight of rural families, including Hillbilly Elegy1 and Heartland,2 complementing more analytic works.3 Anxiety, frustration, and anger take a toll from working-​class families who persist in jobs that fail to sustain them. Indeed, the implosion of opportunity has been associated with “diseases of despair”—​drug overdose, alcoholism, and suicide—​that have ravaged rural America. In 2016, deaths due to drug overdose totaled 63,632, more than American fatalities in the Vietnam War.4 Less lethally, the exasperation of families struggling financially contributed to their political alienation, accounting, in part, for Donald Trump’s election to the presidency. Three decades of stagnant wages left the average working-​class family bereft economically, despite recent low unemployment. The median family income of families headed by an adult without a high school diploma increased from $23,100 in 2013 to $26,500 in 2016,5 but this was insufficient to lift a family of two above the poverty level.6 As family incomes have lagged since the 1970s, lower-​income households lagged behind better-​ off households, failing to recover from losses due to the Great Recession. The bottom 30% of households, as well as half of all families, have been treading water during the decade of recovery from the 2008 economic collapse, which for them represents a decade of lost opportunity. As shown in Figure 7.1, only the top 10% of households have weathered the economic storm of the Great Recession.

Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

4 0 1

10% 8.0% 7.2% 5

2.8% 2.9% 2.0% 0.3% –0.1% –0.4%

0

–5

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–15 2008 Top 5 percent 50th (median)

2010

2012

90th percentile 40th percentile

2014 80th percentile 20th percentile

2016 60th percentile 10th percentile

Figure 7.1.  Cumulative percentage change in annual household income for selected income percentiles, 2007–​2017. https://​www.epi.org/​blog/​household-​income-​growth-​slowed-​markedly-​in-​2017-​and-​was-​stronger-​for-​those-​ at-​the-​top-​while-​earnings-​declined-​slightly/​

Chronically low wages leave working-​class households in a bind: eligibility for public assistance programs, such as Medicaid and the Supplemental Nutrition Assistance Program, include an assets test, which requires liquidating savings of more than $2,000 in most states. Of families desperate enough to resort to welfare, continuing eligibility forbids building assets, creating a “welfare trap.” For households forsaking public assistance, inadequate earnings leave many resorting to subprime financial services, such as payday lenders, to cover routine expenses, further compounding their economic difficulties.7 If the earnings prospects of the post-​baby-​boom generation have disappointed, those of millennials have been no better. Absent comparable employment opportunities, young working-​class adults have been trapped in entry-​level, minimum-​wage jobs, and they remain economically dependent on their parents. Without sufficient income for starting a family or purchasing a home, the American Dream disappears in the mists of a distant future. Since 1975, the inflation-​adjusted median income for adults 25 to 34 has been unchanged, compared to older cohorts who have experienced increases in earned income.8 Clearly, navigating youth through high school and into secure employment that generates a living wage remains a challenge.

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BACKGROUND

Historically, the United States has encouraged youth unlikely to attend college to enroll in vocational education, which is ordinarily high school programs providing training in skilled trades—​carpentry, plumbing, electrical work—​sometimes complemented with an apprenticeship. Yet, unlike countries with robust apprenticeship programs, such as Germany, where companies assure young workers a livable wage, the American experience has been decidedly unsuccessful. A  series of training programs for non-​ college-​bound youth, introduced with the War on Poverty, such as Job Corps, culminated with the School to Work Opportunity Act (STWOA) of 1994, promoted by Secretary of Labor Robert Reich, who was enamored of the German model. Labor market scholar Kathleen Thelen recalled the outcome, “STWOA foundered on the familiar shoals of collective action problems among firms and lukewarm support from organized labor.”9 The demise of STWOA left vocational education as the institutional responsibility of high schools and community colleges, but with little federal support. Subsequent review of job training programs for youth and young adults proved disappointing. Researchers concluded, “Programs such as the $1.5 billion Job Corps program (job training for disadvantaged youth), the $300  million Upward Bound program (academic preparation for at-​risk high school students), the $1.2 billion 21st Century Community Learning Centers (after-​school programs for disadvantaged youth)” did not produce outcomes as promised.10 In their wake, protracted poverty, high unemployment, and asocial alternatives—​petty crime, drug abuse, and family disorganization—​characterized disaffected youth. Against this discouraging backdrop, the Obama Administration advanced an evidence-​based policy agenda, in part necessitated by an unemployment rate of 10%. In short order, requiring outcome research as well as reforming a disorganized employment system became priorities. Fragmentation of the federal workforce system, consisting of dozens of job training programs overseen by 600 Workforce Investment Boards, delivering services through 3,000 One-​Stop Centers, became immediately evident. The Office of Management and Budget and the Department of Labor included a Workforce Innovation Fund (WIF) to make federal employment policy more evidence-​based. With a modest appropriation of $125 million, the WIF made awards for two purposes: increasing the quality of evidence for employment programs and reforming the federal workforce training system. Tiered funding varied grants in accord with the quality of outcomes delivered: $68.1 million for six high-​quality field experiments in

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the top tier, $46.1 million for eight promising programs in the middle tier, and $32.6 million for twelve projects adhering to a reform model but with few deliverable outcomes.11 As had been the case with nurse home visiting, conventional-​formula funding for job training, supporting state training activities regardless of outcomes and sustaining the status quo, impinged on introducing a new research requirement, which would have to be accompanied by additional resources, or subtracted from extant programs, consequences that were problematic for governors dealing with the economic downturn. While tiered funding finessed the issue, the problem of younger workers’ navigating an unfriendly labor market was addressed by funding one high-​ quality initiative, the Los Angeles Reconnections Career Academy, and a second-​tier project, Linking Innovation, Knowledge, and Employment of Riverside, California. California was warming to evidence-​based workforce programs. As WIF progressed, a change in the labor market was underway:  employers seeking efficiencies through temporary, on-​call jobs created a growing segment of the labor market, the precariat.12 An elusive category, the precariat consisted of workers in temporary jobs, such as Uber, Lyft, and TaskRabbit, who lacked a career track; often their income was inadequate for self-​support, causing a constant scramble for employment.13 Low wages had typified sectors of the labor market, of course, including food-​service workers for McDonald’s as well as employees of big-​box stores, such as Walmart. Michael Piore had labeled low-​wage workers without benefits or career ladders a “secondary” labor market, distinct from employees who worked for salaries and received benefits and had a career trajectory.14 In this respect, the precariat represented a digital update of the secondary labor market, both comprised disproportionately of younger workers. Since the Great Recession, of workers employed part-​time, one fourth sought full-​time work; the number of involuntary part-​time workers having increased 44.6%. Although involuntary part-​time employment spanned all demographic groups, 41.1% were minorities of color, and the median earnings of African American men without a high school diploma were only 15% of that of men from other demographic groups not having completed high school.15 While a subset of the precariat—​students and artists—​may have relished a bohemian lifestyle, tentative employment not only impeded the steady employment and income necessary to achieve the American Dream but also discouraged work among less-​educated youth, who might be inclined to mischief instead.16

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Efforts to reorient workforce training were also shared by nonprofit organizations. Long a leader in employment research, the Upjohn Institute for Employment Research released, in 2019, “Building Share Prosperity: How Communities Can Create Good Jobs for All.” Citing the historic role of place-​based employment in community prosperity, the Upjohn report asserted, The best path for economically distressed communities is to ensure their residents are prepared for and connected to good jobs. This route yields both private and public benefits: investments needed to provide good jobs for residents not only improve the well-​being of individuals and families, they also contribute to overall community prosperity.17

Emphasizing college scholarships, such as the Kalamazoo Promise, which ensures college access for all high school graduates, now replicated by 300 communities, the report viewed education as a workforce investment for struggling communities. By the same token, the circumstances of low-​ income students warranted special consideration, “At the postsecondary level, first-​generation college-​goers and low-​income students need more intensive tutoring, assistance navigating college rules and processes, and supports for basic needs like food and transportation.”18 If economically fragile communities were to optimize scholarships for college-​bound youth, attending to their social and economic circumstances would be critical.

GERALD CHERTAVIAN

Exposed to the plight of urban youth through Big Brothers, Gerald Chertavian had concluded more systemic interventions were called for. In 1987, Chertavian became a Big Brother to David Heredia, a 10-​year-​old living with his mother in public housing in New York City. Comprehending the obstacles to David’s prospects, Chertavian exposed David to opportunities outside the inner city, eventually covering the young man’s tuition so that he could become a graphic artist; later, David would become a Big Brother himself. Extrapolating on his Big Brother experience, Chertavian committed to expanding opportunity for disadvantaged youth. Parlaying his successful Wall Street experience and Ivy League credentials, Chertavian determined to launch an initiative to increase the employment prospects of inner-​city youth. In 2000, he founded Year Up, a program directing at-​ risk adolescents to internships with financial services firms.

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Chertavian’s book A Year Up chronicled his experience in formulating the program model. By the book’s publication, Year Up had been introducing inner-​city youth to internships with major corporations for a decade. Year Up had a rigorous application process, insisting that high school and GED graduates comply with corporate decorum: “We insist on proper business attire, no T-​shirts, no sneakers, no street slang—​no fooling.” Age 18 to 24, Year Up trainees reflected a profile of disadvantaged inner-​city youth: 59% were African American, 21% were Hispanic, 5% were Asian, 5% were white, and 10% were other or mixed race; 83% had a high school diploma and 17% had earned a GED; 34% lived in public or subsidized housing; 16% were parents; and 61% were male and 39% were female.19 Chertavian designed Year Up to adapt inner-​ city youth to corporate culture. Each Year Up participant begins with 5 months of technical and professional skills classes followed by 6  months of full-​time internship. Throughout the year, students earn college credits and a weekly stipend. At the beginning of 11  months of training, each student starts with 200 points, which can be increased or decreased based on performance. Chertavian reported, “On average, close to 70% of our incoming students graduate.” Acknowledging the challenges confronted by poorer students from adverse backgrounds, Year Up includes multiple supports for students, including wraparound support providers and counselors, on-​site advisors or “coaches,” and mentors from businesses. “Learning communities” of 40 students, established at program entry and headed by a dedicated program manager, provide additional staff and peer support for students. After 5 months of classroom training, participants transition to internships where they are supported by direct supervisors who work for the host company as well as Year Up’s dedicated internship services and corporate partner relations staff. From its inception, Year Up has been funded by diverse sources; however, a cardinal principle has been that students pay no fees for participation and, in fact, they receive a stipend for the full duration of the program through classroom education and their internship. “The fees paid by corporations for our interns cover about half of our expenses for each student,” Chertavian stated. “Less than 10% of our funding is from the government. The rest must be raised [from foundation solicitations].” Approaching $30,000 per participant, Year Up’s costs are not low, but lifetime earnings and tax payments more than cover the program’s expenses.20 Year Up’s success in attracting not only corporate sponsorship of interns, but also foundation subsidies for internships, attests to the affinity Chertavian has cultivated with the business community.

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RCTS

Bridging the “opportunity divide” between 5 million underemployed high school graduates and 12 million highly skilled jobs anticipated in the next decade,21 Year Up accelerates upward mobility of inner-​city youth through enhancing marketable job skills, personal development, internships, and college credits.22 To determine the program’s effectiveness, Year Up has mounted several randomized controlled trials (RCTs), the first, running from 2007 to 2011, at its own expense, and then with some additional financial support for extended follow-​up from the Charles Stewart Mott and Edna McConnell Clark Foundations. As Garrett Warfield, Year Up’s researcher director recalled, In partnership with the Economic Mobility Corporation (EMC), Year Up conducted an impact evaluation using a randomized controlled trial with 195 young adults at three program sites in Boston, Providence, and New  York.23 EMC tracked 135 Year Up students and 60 control group members for 3 years after the program to measure and compare employment outcomes and enrollment in postsecondary education. Year Up participants earned about $13,000 more than members of the control group over the 3 years after the program. Participants’ earnings were 32% greater than those of the control group. EMC’s president Mark Elliott called this “the most exciting evaluation results we’ve seen in youth employment in 20 or 30 years—​and the first to show a really substantial earnings gain.”

Having found an RCT useful for program improvement, Year Up pursued additional field experiments. Subsequently, Year Up became one of nine programs evaluated by the federal Pathways for Careers and Education (PACE). Abt Associates evaluated Year Up by recruiting young adults from eight sites—​Atlanta, Boston, Chicago, New  York, Providence, the San Francisco-​ San Jose Bay Area, Seattle, and Washington DC—​and 1,669 were assigned to the test group and 875 to the control group. The PACE assessment included interviews with managers to determine program fidelity. Evaluations at 1.5 and 3 years after random assignment revealed significant benefits. While 57% of controls engaged in post-​high-​school training, often at community colleges, 96% of Year Up completers did so. Moreover, the subsequent earnings of Year Up participants were 53% higher than controls after the sixth and seventh quarters following random assignment. As shown in Figure 7.2, the earnings impact of Year Up participants followed a positive

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Figure 7.2.  Impact on average earnings in successive follow-​up quarters. https://​www.yearup.org/​wp-​content/​uploads/​2018/​06/​Year-​Up-​PACE-​Executive-​Summary-​2018.pdf

trajectory after an initial fall at program inception that reflected the opportunity cost of being peripheral to the labor market while participating in Year Up. It is important to clarify, however, that the treatment group earnings shown in Figure 7.2 exclude the stipend that Year Up provides participants, which more than offsets earnings losses during the program year. Indeed, when the stipend is included, treatment group members accumulated over $1,800 more in earnings than control group members during the program year. Abt Associates concluded, “Large positive effects persisted through the third follow-​up year. Impacts also were positive for an array of other indicators of early career progress, although effects on college persistence were mixed.”24 The researchers concluded that, compared to other career training programs, “These earnings impacts are the largest reported to date for workforce programs tested using a randomized controlled trial (RCT) design.”25

GARRETT WARFIELD

As Senior Director of Research and Evaluation, Garrett Warfield has been committed to Year Up for deeply personal reasons: “I came from a family

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with a lot of love but [that] was fundamentally broken in some serious, serious ways—​poverty, drug and alcohol abuse, instability, with some family members going in and out of prison, terminal illness—​that experience of having someone who cared about me as a mentor and a coach made all the difference.” By grit and perseverance, Warfield found education to be a means for personal fulfillment, and he graduated from a public high school as class valedictorian. Like many Year Up interns, Warfield had struggled, but having guidance made all the difference in the world. “The one thing that transcended all that was understanding how to help people,” he recalled. Higher education provided the basis for “giving back” the investment that others had made in him, and research seemed a way to channel that motivation, while also generating a real product. “When I was leaving the academy, I was eager to take all that stuff and try to find a way to apply it. I started early in research as an undergrad, working for a treatment center run by Boston University.” But Warfield also spent time abroad, studying at Middlesex University outside of London. Returning to the United States, he completed a doctorate at Northeastern University and then found a position evaluating programs for a community foundation. “I found a niche job market as an internal evaluator, working for nonprofits needing to know, ‘Are we really doing something worthwhile?’ a really important question. So, I found a role that seemed like a good fit. I worked for a local community foundation responsible for $1 billion in assets, and that invested in operating and evaluating a gang intervention program.” Program evaluation was not touted as a career option in graduate school, he recalled. “I never knew this kind of role existed because we never talked about it in the academy. After years in graduate school this was a dream job, and the stakes were incredibly high, but it was a small close-​knit team of about 30 people who cared deeply about the work,” he recalled. “I say the stakes were high because it was gang intervention; some days of the week young adults were shooting at each other.” Seven years after earning a doctorate, Warfield was immersed in research at Year Up, continuing a trajectory unusual for a nonprofit. “My team and I do interviews, crunch numbers, focus groups, do what it takes, but within 48 hours of that project being done I can see positive change in a program setting and helping young adults—​all that matters a lot.” Unlike many nonprofits, Year Up was keen to develop a strong track record in research. “I think many organizations feel threatened by an accountability requirement,” he observed. “Peeling back the layers or pulling back the curtain to see what’s really going on is scary; it’s really, really scary.” Consequently, the default for some nonprofits has been to evade rigorous research.

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And actually, many organizations would not like aspects of their work revealed by an external party coming in and poking and prodding to hold them accountable . . . many organizations are threatened or intimidated by that; I’d say that that feeling comes out of the funding world saying, “We’ve been investing for quite some time in different programs with mixed evidence”—​some work, some don’t work—​and if we want to be responsible at the end of the day for these moneys we need to hold these programs accountable.

Yet, norms around philanthropic giving have changed, placing a premium on outcome research, adding program capacity that increases agency costs. “Very quickly, in order to get access to this funding, that you’ve been receiving for some time, it’s now contingent on all these requirements and you’re not set up to meet these requirements—​they’re very expensive, rarely will we give you enough money for staff so that you could actually do this kind of work well—​now you have to prove your worth so you start tracking your work, measuring what you do.” Because many nonprofit staff lack the skill set to evaluate efficacy and efficiency, on-​the-​job training becomes necessary. Warfield spoke from personal experience: I have developed finance chops over the years, but I didn’t come into this work with the ability to balance a business’s budget. I didn’t come into this work with the ability to oversee a human resources department in for-​profit and nonprofit management.

Unfortunately, graduate programs often omit content relating to Year Up’s embrace of social entrepreneurship. “Most people go through school and they don’t really have any classroom work in what we do. Social impact MBA programs have just started getting traction in the last decade.” Warfield asserts the importance of a critical stance when thinking through evaluation research. The field requires a capacity for critical self-​ examination:  “Someone who comes in with the passion to ask tough research questions, then thinking critically about testing hypotheses, then going back and being their own devil’s advocate to dig a little deeper.” Among nonprofits pursuing innovations in workforce training, Year Up is distinctive for embedding RCTs in its growth. “We’ve done four RCTs,” Warfield explained. “The story behind PACE (Pathways for Advancing Careers and Education, a collaboration involving the Administration for Children and Families, the Social Innovation Fund, and Abt Associates) includes previous research we conducted. Social policy-​ wise we have decades of relevant history in workforce development, but poor evidence.” For example,

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The Job Training and Partnership Act (JTPA) invested $2 billion nationally, but not all programs are implemented that well, some stuff works, some stuff is promising, and some stuff is not. And that gets simplified into “nothing works.” In response to that mantra and lack of confidence, in subsequent years we ended up with a couple of billion dollars pulled away from youth workforce development initiatives.

Thus, “Year Up evolved during the early 2000s, in this context of ‘nothing works’ as a philanthropic initiative.” Year Up not only confronted the challenge of training under-​enrolled and underemployed inner-​city, minority youth, but also faced a “culture around youth workforce development that was negative.” In addition to being held accountable via RCTs, Year Up must meet expectations of interns and sponsors. “Year Up’s bottom line has to satisfy two stakeholders:  young adults we serve and corporate partners. That puts us in a unique position, so we can talk corporate while helping young adults,” attested Warfield. “So, business has provided revenue alongside philanthropy. The expectations of philanthropy are influenced by business, which is concerned about the bottom line. We believe in what you’re doing from a philosophical perspective as a philanthropic partner, and also what you’re telling us about your business model makes sense.” With regard to workforce training, Year Up’s orientation toward company staffing needs is a plus. “You’re developing a viable talent acquisition model for our company. If a company wants to fill vacancies, and traditional pathways coming out of college aren’t doing that, and we’re losing as much as $10 to $15 thousand over a 3-​month period by having a vacancy at a corporation that goes unfilled, we have a pipeline of help,” Warfield explained. Addressing the staffing requirements of corporations has been essential for Year Up’s success. As prominent companies hired Year Up interns and found them to be assets, the program expanded. According to Warfield, Within a few years, we got the program running, then expanded in the northeast, gradually down to DC. After 4 or 5 years it becomes abundantly clear that people need to know that Year Up is delivering on its promise. Corporate partners want to know that this is helping produce young adults who are earning more money over time, [and] philanthropy certainly wants to know that.

But Warfield insists that credit is due to Year Up’s founder. “Probably the most important part here—​and I don’t want to blow smoke—​our leader, Gerald, really, sincerely cares about actually delivering on a promise. He is a

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man of his word. And he’s a bit of a numbers-​nerd. People on our board are coming from similar backgrounds like him.” Not coincidentally, Year Up’s board, with significant representation from finance, helped acquire a nine-​ story bank building in downtown Boston to serve as the organization’s headquarters. Gerald Chertavian’s business background has infused an ethos in Year Up that, along with insistence on RCTs, accounts for metrics that most nonprofits lack. At the end of the day, if you’re going to produce your profit, you need to show it. Year Up can measure our outcomes, we can track young adults after they graduate from Year Up. And we can do that in a way that people can’t really question, beyond a shadow of a doubt that what you’re saying is real. And that’s where the rigor of a randomized controlled trial comes in.

Warfield explained that the combination of bottom-​line values and rigorous research vaulted Year Up out of the malaise affecting workforce training: At the time, because there was so much doubt in the workforce development space there weren’t many funders who were going to put money on the table for a nonprofit to go do an RCT. So, the first one we did we paid for out of pocket. If what we’re doing isn’t working, we have to learn from that and commit from learning from that.

Warfield admitted that RCTs presented obstacles for Year Up. “The biggest challenge was creating a control group; you have to turn people away from the program,” he admitted. “I’m not happy about turning people away from our doors, but if we’re going to do this then let’s do it right. At the end of the day we can only serve so many students anyway. So, we have to fill all those seats, but also over-​recruit for a control group.” But Year Up persevered. “Our first study was small; three sites involving 200 students—​our baby RCT. We followed graduates for 3 years and they had a 30% earnings gain, which, at the time, had never been shown.” This outcome was a striking contrast with conventional workforce training, as Warfield acknowledged. For years and years, we’d wondered about 18-​to 24-​year-​olds. We know that Head Start and early literacy programs work well, but if we don’t invest in young adults it leaves 5 million people in this age range who aren’t going away and still need help. Here’s the justification for why programs like Year Up are important.

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Warfield admitted there were early skeptics, including Nobel Laureate James Heckman, who had calculated the return on investment for, and is a big proponent of, early childhood education. “At the 2011 Clinton Global Initiative we’re there and Jim Heckman was there; he read our first RCT study and basically conceded that there’s hope in programs like Year Up.” But the 2011 PACE RCT was in a different research league altogether. As might be expected from a researcher, Warfield is enthusiastic about field experiments, while acknowledging their challenges: RCTs are amazing, but they’re a pain in the ass, and I’m someone who loves this kind of work. It’s a heavy, heavy lift. Now we have a team dedicated to research. Starting with one RCT, we’ve now done four, leading to continual product improvement: test, learn, break, test, learn, break is the cycle. Just keep testing and learning as rapidly as you can to improve what you’re doing.

Continual product improvement through RCTs distinguishes Year Up. Warfield observed, “There are relatively few organizations who have the chops to do this. Usually, they’re working with an external researcher who’s been assisting them for years and years.” In contrast, Year Up’s in-​house research capacity has become a distinguishing feature, Warfield noted. “There are folks out there doing this kind of work, but we’re relatively few and far between.” Ultimately, the measure of success rests with the interns that Year Up serves, a population that Warfield identified with. Of special concern are males of color, who seem to defy conventional workforce interventions. Warfield explained, “Our young black men are doing great. The biggest impacts are realized in programs serving those with the greatest needs. We’re not immune from wage gaps related to race and gender.” With some pride, Warfield reviewed the demographic breakdown of Year Up graduates: “Every demographic subgroup shows an increase in earnings.” Despite Year Up’s success, Warfield is not naive about its workforce training model, especially as regards the wage gap. Every 5 years we do an alumni census, which shows we’re closing the wage gap. With our population we’ve cut the wage gap in half. We continually advocate for equity in wages, but structural factors make that difficult. In Wisconsin, for example, there are districts where people are disconnected from resources, particularly corporate settings for internships. Where are the employers? In rural settings, Year Up’s traditional brick-​and-​mortar approach may not work well.

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The urban–​rural fault line in workforce training may require modification of the Year Up model. Warfield reflected, “What we’re working on now is how [to] take pieces of Year Up and deploy them as a plug and play product . . . Gray collar, hospitality work might be applicable. Then bridge them. The answer is not to shoe-​horn Year Up’s traditional approach into some place where it wouldn’t work, such as where I grew up, where there aren’t large corporate partners nearby.” A young researcher who’s seen his share of personal challenges, Warfield is upbeat about Year Up, enthusiastic about his contribution to an innovation that is changing the lives of youth of color. As an admitted numbers nerd, he has become adept in fields some distance from conventional research, including budgeting and human resources. But outcome analysis is a new field, so he’s accepted those challenges. Waxing philosophic, Warfield summed up his experience with a wry comment: “You’re in the sandbox; sometimes you turn up a cat turd but at other times you build a castle.”26

YOUTH TRAINING

As concern grew for young adults not in school or the labor market, other organizations complemented Year Up. Per Scholas began reconditioning computers in the Bronx in 1995; in 2008 the nonprofit phased-​out computer recycling in favor of IT training. By 2010, Per Scholas had been evaluated by an RCT and won a White House Social Innovation Fund award. In 2012, in partnership with the Creating IT Futures Foundation, Per Scholas embarked on nationwide replication, beginning in Columbus, Ohio. The following year, Per Scholas deployed in Cincinnati and boasted enrollment of 500 students. In 2014, another site was established in Silver Spring, Maryland, with a fifth site added in Dallas the following year. Subsequently, Per Scholas expanded operations in the South Bronx and Newark, New Jersey. After two decades Per Scholas had attracted the support of dozens of prominent foundations and local governments.27 Per Scholas has been evaluated by two RCTs, the first relatively small. A  second RCT, however, involved 700 adults:  their average age was 31, 81% were of color, and 60% had been unemployed immediately before the study. Three years after random assignment, the Per Scholas group was 6% more likely to be employed, and their annual earnings eclipsed those of controls by 27%, or $4,829 by the third year. The Per Scholas group was less likely to receive public assistance and was more likely to be satisfied with their lives than controls.28

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In 2011, another workforce training innovation was launched in the Bronx: Pursuit. Conceived by Jukay Hsu, an immigrant from Taiwan who served in Iraq as well as the Bloomberg mayoral administration, Pursuit was a nonprofit focusing on IT training. Pursuit attracted un-​and underemployed young adults, about half trainees on public assistance and about half female. Pursuit also promised to re-​employ blue-​collar workers. Partnering with high-​tech companies, such as BlackRock and JP Morgan Chase, Pursuit exploited impact investing to accelerate the upward mobility of the minority poor.29 Offering 10  months of free coding instruction, Pursuit boasted 300 graduates who at entry had an average income of $18,000 but claimed earnings of $85,000 with their first high-​tech job.30 Unlike Year Up and Per Scholas, Pursuit has yet to be evaluated by an RCT.

CODA

In 2017, Brookings Institution scholar Richard Reeves published Dream Hoarders, a plangent lament about the prerogatives of American arrivistes. Reeves faulted aspiring families for perks ranging from access to college, zoning, and internships, the equivalent of what economists would term rents, wrung out of social capital.31 The book put the American plutocracy on notice that a mole was in their midst and was willing to out them. Validation of Reeves’ thesis of unscrupulous plutocrats came 2 years later when the Department of Justice uncovered the largest cheating scam in the nation’s history:  50 card-​carrying members of the upper-​middle class were arrested for contriving admission to the nation’s premier, Ivy League colleges. Among the charges were cheating on entrance tests and bribing academic officials, but one case stood out: “A teenage girl who did not play soccer magically became a star soccer recruit at Yale. Cost to her parents: $1.2 million.”32 The event certainly marred the American meritocracy, but the irony was in obscuring an incipient private-​sector insurgency to actually counter meritocratic privilege. Year Up, Per Scholas, and Pursuit, which ensured inner-​city youth got a decent job with a living wage, were initiatives that grew organically from soil that government had found barren. As private ventures channeling inner-​city youth into the labor market, these workforce innovations reflected the passion of upper-​class altruists for organizing a network of organizations dedicated to poverty remediation in the most adverse environments. In education and job training, their private nonprofits have flourished where government programs have foundered, but they are just one feature of a changing policy terrain in youth development.

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Teach for America (TFA) provides a signal illustration. Conceived by Wendy Kopp to place instructors in disadvantaged schools, since 1990 TFA has provided 60,000 teachers across the nation. Kopp’s strategy was to attract the top graduates from first-​tier universities, to provide just a summer of rigorous training, and to negotiate with inner-​city and rural school systems for placements. TFA was an immediate hit. Tapping into a reservoir of altruism, TFA was often the top employment option for seniors at Ivy League colleges.33 Equally impressive, TFA teachers performed better than those prepared by conventional teacher-​training programs, as determined by random assignment studies. A 2013 study co-​sponsored by the U.S. Department of Education found that TFA teachers were comparable to traditional teachers but generated improvement in math scores equivalent to 2.6 months in a school year.34 A 2015 evaluation by Mathematica Policy Research found that, although TFA instructors had significantly less training than traditional teachers, students in pre-​K through Grade 2 improved their reading scores an equivalent of 1.2 months over the span of those years.35 Subsequently, two TFA graduates, Mike Feinberg and Dave Levin, embarked on a more institutional strategy, creating the Knowledge Is Power Program (KIPP) as a charter school.36 The combination of a longer school day and academic year as well as higher expectations soon distinguished KIPP charter schools, which numbered 224 by 2019.37 Two RCTs of KIPP schools revealed that 2 to 3 years after random assignment, KIPP students benefited 5 and 10 percentage points on reading and math, respectively, compared to students in control groups.38 Due to outcomes demonstrated by two RCTs, KIPP received a “top tier” designation from Social Programs that Work. As the charter school movement gained traction, KIPP became an exemplar of alternatives to traditional public schools. The award-​winning documentary Waiting for Superman, which followed the selection of students for a charter school as well as the experiences of their families, reflected parental support for charter schools.39 Meanwhile, Geoffrey Canada’s Harlem Children’s Zone (HCZ) had organized two charter schools, midway through his innovative “birth to college pipeline.”40 Evaluated by researchers from Harvard, the charter schools effectively closed the black–​white achievement gap, likely because HCZ students spend much more time in classrooms than students in public schools. The conservative Heritage Foundation, reflexively critical of liberal designs in social programs, applauded the achievements of HCZ in overcoming the significant educational disadvantages of Harlem youngsters.41

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Like workforce training, such as Year Up, Per Scholas, and Pursuit, TFA and KIPP were innovative nonprofits; however, they differ in one important respect: staff of the former are not represented by collective bargaining agreements, while school instructional staff are represented by unions. TFA presented a direct challenge to teacher unions by providing training over a summer, far less than conventional teacher education preparation, yet rigorous research showed that TFA instructors were comparable, and often superior, to conventional teachers. Similarly controversial, KIPP not only siphoned funding from public schools, but also evolved a strong alliance with parents, many of whom found public education inadequate. The popularization of TFA and KIPP represented an institutional challenge to public education, and, because teachers’ unions were strong supporters of the Democratic Party, a political fight followed, with Democrats favoring public education and Republicans supporting charter schools. The dispute reached a crescendo in 2019 when California state legislators, reflecting opposition by teachers’ unions, threatened to ban TFA from the state. “Backed by powerful teachers unions, Democrats are pushing to ban Teach for America from California amid a wave of teacher’s strikes and a heated debate over charter schools in the nation’s most populous state,” reported Politico. “The push comes as education policy becomes an increasing point of tension, putting the national nonprofit and its recruits—​promising college grads eager to teach in poor communities—​in the crosshairs of the state’s supermajority Democratic legislature.”42 The specter that emerges is one of liberal Democrats, despite strong evidence favoring TFA and KIPP, favoring teachers over the education of disadvantaged students and their parents. The connection between nonprofits innovating in primary and secondary education and workforce training for unskilled inner-​city youth is obvious. As teachers’ unions organize an economic rent, consumers of public education become peripheral to an essential public service. Worse, as private-​sector innovations demonstrate superior performance, they are negated as a threat posed to the status quo. Arguably, had elementary and public education been more adequate, compensatory workforce training would not have been necessary. But there is a larger issue here:  drawing on the altruism of upper-​ middle-​class youth, the very young adults poised to join the “1%,” disruptive innovations have evolved in education and workforce training that, in accelerating the upward mobility of inner-​city, minority youth, actually serve to reverse the opportunity hoarding of which Reeves complained. Poignantly, Resource Generation (RG) illustrates upside-​down philanthropic

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capitalism. Established in 2000 by New England donors concerned about issues related to women, social justice, and race, RG capitalized, ironically, on the Occupy movement, aligning with the 99%. Through informal social events and more strategic Donor Organizing Institutes, RG has represented affluent people under 35 seeking to transcend conventional philanthropy.43 A sociologist who had interviewed several RG participants observed, “These progressive children of privilege told me they study the history of racial capitalism in the United States and discuss the ways traditional philanthropy tends to keep powerful people at the top.”44 Unwilling to abide by a philanthropic code of silence about their wealth, members of RG have asserted their obligation to put it to public benefit. Punctuating the revolt of the arrivistes, Abigail Disney, granddaughter of Roy Disney, criticized the pay of Walt Disney, Inc’s CEO Robert Iger, which was $65 million for 2018, 1,424 times the median pay of a Disney employee. “It is time to call out the men and women who lead us and to draw a line in the sand about how low we are prepared to let hard-​working people sink while top management takes home ever-​more-​outrageous sums of money,” she argued, suggesting the company do more to “rebuild the American middle class.”45 By definition, disruptive innovation, originating from unexpected sources and precipitated by unanticipated events, threatens the status quo. As evidence supports innovation over interests vested in the status quo, ideological and political realignments will reverberate through social policy.

NOTES 1. J. D. Vance, Hillbilly Elegy (New York: William Collins, 2016). 2. Sarah Smarsh, Heartland (New York: Scribner, 2018). 3. Joan Williams, White Working Class (Cambridge, MA: Harvard Business Review, 2017). 4. https://​www.cdc.gov/​media/​releases/​2018/​p0329-​drug-​overdose-​deaths.html 5. https://​www.federalreserve.gov/​publications/​files/​scf17.pdf 6. https://​obamacare.net/​2016-​federal-​poverty-​level/​ 7. Jonathan Morduch and Rachel Schneider, The Financial Diaries (Princeton, NJ: Princeton University Press, 2017). 8. David Leonhardt, “The Fleecing of the Millennials,” New York Times, January 27, 2019. 9. Kathleen Thelen, Varieties of Liberalization and the New Politics of Social Solidarity (New York: Cambridge University Press, 2014), p. 80. 10. http://​coalition4evidence.org/​wp-​content/​uploads/​2010/​05/​Viewpoint-​Essay-​ Sawhill-​Baron-​Youth-​Today-​May-​2010.pdf

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11. Ron Haskins and Greg Margolis, Show Me the Evidence (Washington, DC: Brookings Institution, 2015), ­chapter 6. 12. Guy Standing, The Precariat (London: Bloomsbury, 2011). 13. David Brooks, “The American Precariat,” New York Times, February 10, 2014. 14. Michael Piore, “The Dual Labor Market,” in The State and the Poor, eds. H. Beer and R. E. Barringer (Cambridge, MA: Winthrop, 1970). 15. William Julius Wilson, More Than Just Race (New York: WW Norton, 2008), p. 68. 16. David Stoesz, The Investment State (New York: Oxford University Press, 2018), pp.  71–​74. 17. Michelle Miller-​Adams, et al., “Building Shared Prosperity” (Kalamazoo, MI: Upjohn Institute, 2019), p. 1: https://​research.upjohn.org/​cgi/​viewcontent. cgi?article=1238&context=reports 18. “Building Shared Prosperity,” p. 3. 19. file://​/​Users/​davidstoesz/​Downloads/​By-​The-​Numbers-​-​-​NTL-​March-​2019-​ %20(1).pdf 20. Gerald Chertavian, Year Up (New York: Viking, 2012), Prologue. 21. Martha Ross, “Most Out-​of-​Work Adults Face Bleak Job Prospects” (Washington, DC: Brookings Institution, 2019): https://​www.brookings.edu/​ blog/​the-​avenue/​2019/​05/​15/​most-​out-​of-​work-​young-​adults-​face-​bleak-​job-​ prospects/​?utm_​campaign=Brookings%20Brief&utm_​source=hs_​email&utm_​ medium=email&utm_​content=72802895 22. https://​www.yearup.org/​stories/​opportunity-​divide/​ 23. Anne Roder and Mark Elliott, “Sustained Gains,” Economic Mobility Corporation, 2014: https://​yearup.app.box.com/​s/​93875cm724avceftkjjn9bsqeh rgl2l7 24. https://​www.yearup.org/​wp-​content/​uploads/​2018/​06/​Year-​Up-​PACE-​Full-​ Report-​2018.pdf 25. https://​www.yearup.org/​wp-​content/​uploads/​2018/​06/​Year-​Up-​PACE-​Full-​ Report-​2018.pdf 26. Interview with Garrett Warfield, March 22, 2019. 27. https://​perscholas.org/​ 28. https://​evidencebasedprograms.org/​document/​per-​scholas-​evidence-​summary/​ 29. https://​www.pursuit.org/​about-​us 30. https://​www.nytimes.com/​2019/​03/​15/​business/​pursuit-​tech-​jobs-​training. html 31. Richard Reeves, Dream Hoarders (Washington, DC: Brookings Institution, 2017). 32. Jennifer Medina, Katie Benner, and Kate Taylor, “Actresses, Business Leaders and Other Wealthy Parents Charged in U.S. College Entry Fraud,” New York Times, March 12, 2019: https://​www.nytimes.com/​2019/​03/​12/​us/​college-​ admissions-​cheating-​scandal.html?module=inline 33. Wendy Kopp, One Day, All Children (New York: Public Affairs, 2003). 34. https://​tfainternal.app.box.com/​s/​1tdmlosi9h5lexsw6scz 35. https://​teachforamerica.app.box.com/​s/​wyuu1rpqogxmksat86mnuk16sur981le 36. Jay Matthews, Work Hard, Be Nice (Chapel Hill, NC: Algonquin, 2009). 37. https://​www.kipp.org/​approach/​ 38. https://​evidencebasedprograms.org/​programs/​kipp-​charter-​schools/​ 39. https://​en.wikipedia.org/​wiki/​Waiting_​for_​%22Superman%22 40. Paul Tough, Whatever It Takes (New York: Houghton Mifflin, 2008).

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41. https://​www.heritage.org/​education/​report/​ assessing-​the-​harlem-​childrens-​zone 42. https://​www.politico.com/​states/​california/​story/​2019/​04/​06/​ teach-​for-​america-​except-​for-​california-​955316 43. https://​resourcegeneration.org/​ 44. Rachel Sherman, “The Rich Kid Revolutionaries,” New York Times, April 27, 2019: https://​www.nytimes.com/​2019/​04/​27/​opinion/​sunday/​rich-​social-​inequality. html?action=click&module=Well&pgtype=Homepage§ion=Sunday%20 Review 45. Abigail Disney, “It’s Time to Call Out Disney,” Washington Post, April 23, 2019: https://​www.washingtonpost.com/​opinions/​its-​time-​to-​call-​out-​my-​ familys-​company-​-​and-​anyone-​else-​rich-​off-​their-​workers-​backs/​2019/​ 04/​23/​5d4e6838-​65ef-​11e9-​82ba-​fcfeff232e8f_​story.html?utm_​term=. dd21fe787df5&wpisrc=nl_​ideas&wpmm=1

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CHAPTER 8

Arnold Ventures

T

he iconic social innovations that evolved since the 1970s, their outcomes demonstrated by multiple RCTs—​ the Perry Preschool, Nurse-​ Family Partnership, and the Abecedarian Project—​ have been replicated more recently in other fields—​by Year Up and Per Scholas—​ propelling the evidence-​based policy movement forward. Critical in this evolution has been the interplay of government, foundations, and nonprofit organizations, forming what is arguably the most dynamic feature of a rapidly evolving knowledge economy, one that promotes putting private capital to public purpose. The emergence of postindustrial society destabilized democratic capitalism, primarily through digital technology, an uncontrolled Internet, and financialization of the economy. Indeed, the growth of the high-​tech knowledge economy introduced extraordinary wealth for digital pioneers, among them Steve Jobs, Paul Allen, Jeff Bezos, and Mark Zuckerberg, in the process making Apple and Amazon the world’s first trillion dollar companies. At the same time, unregulated applications of new technologies invited cowboy capitalism and subsequent economic mischief that metastasized into the Great Recession as well as the digital piracy that corrupted the 2016 presidential election. Thus, the reconciliation of public benefit with extraordinary wealth produced by digital technology and generated during the nation’s second Gilded Age became a compelling concern. As had the titans of commerce of the industrial era—​Andrew Carnegie, David Rockefeller, and Henry Ford—​the captains of the digital economy established eponymous charities: The Bill and Melinda Gates Foundation, the William and Flora Hewlett Foundation, and a donor advisory fund

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established by Mark Zuckerberg. Billions of tax-​exempt dollars catalyzed innovation in a multitude of activities—​pre-​K to 12 education, criminal justice, poverty alleviation, child welfare, and higher education—​at the same time attracting controversy insofar as untaxed corporate foundation funds were privately directed, arguably supplanting government programs. Yet, proponents of foundations noted a majoritarian problem with respect to government initiatives: any public program requires support by a majority of elected representatives, a threshold that tends to reinforce the status quo rather than introduce risky ventures abjured by public officials. Pragmatically, the problem could be finessed by integrating public programming with foundation investments, the synergy demonstrating the virtue of public–​private partnerships. Out of the protean milieu, new organizations emerged, emblematic of the evidence-​ based movement.

THE WASHINGTON STATE INSTITUTE FOR PUBLIC POLICY

In 1982, the Washington State legislature established the Washington State Institute for Public Policy (WSIPP) under the auspices of Evergreen State College, a public 4-​year institution.1 Enabling legislation specified, “The Institute . . . is to serve the needs of policymakers by involving the state’s academic talent in the study of important statewide issues . . . by undertak[ing] research studies, sponsor[ing] conferences, publish[ing] monographs, and otherwise assist[ing] in promoting the flow of information between academics and state and local officials.”2 WSIPP not only reflected Justice Brandeis’s observation that states serve as “laboratories of democracy,” but also operationalized a research organization that would become unique among states. Charged with constructing an inventory of social programs that had been rigorously evaluated regarding efficacy (delivering desirable outcomes) and efficiency (while being cost effective), WSIPP vetted and archived hundreds of studies regarding children’s services, criminal justice, healthcare, higher education, mental health, pre-​K to 12 education, and public health.3 In the course of providing optimal information to lawmakers, WSIPP has enjoyed bipartisan respect. “I wish [WSIPP] had more capacity,” one Republican legislator remarked, “We need people like that to highlight the areas we should be focusing on and to know whether the money we’re investing gets an outcome. That way it’s not just rhetoric, it’s not just debate, but we’ve got a basis to make a sound decision.”4

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Three decades after its inception, WSIPP was unique among states: “Washington State has forged a unique political culture, with regard for using evidence as part of the decision-​making process, and has created a ‘research-​to-​policy pipeline’ to support that process,” noted Stephanie Lee, WSIPP’s current director and a coauthor. The WSIPP policy process is depicted in Figure 8.1 using a legislative mandate on juvenile justice.5 Responding to legislators’ interest in optimizing public resources, WSIPP has become institutionalized in Washington State. In the process of developing an archive of program outcomes, WSIPP staff have evaluated fields of activity, such as early childhood education (ECE). For example, in an assessment of early childhood interventions, including the Abecedarian Project, Lee and her colleagues concluded that long-​term benefits can be revelatory: “In many cases, [ECE] benefits can be measured in monetary terms by looking at consequences such as increased earnings and reduced costs to public sector services.”6 Stephanie Lee reflected on research as a career track, which prepared her well for directing the nation’s leading state research institution. I was in graduate school for experimental psychology pursuing a PhD, when I came to the realization that I didn’t want to become an academic. Once I got my Master’s degree I began exploring the world of applied research. I started out at a charity in London where I worked for 4 years, then moved back to the U.S. After a couple of years in California, I was looking to return to Washington, and the Institute happened to be hiring.

From studies in learning and memory, Lee realized applications to “thinking about how research could in general really inform how people operate in the world. And I think there’s a really nice translation there to

Set agenda: The 1997 Washington State Legislature directed WSIPP to review and analyze research on jovenile justice programs, in order to better inform options for reducing youth violence and juvenile crime.

Generate research: WSIPP researched and meta-analyzed the effectiveness of an array of juvenile justice programs.

Disseminate information: WSIPP produced a report on the estimated benefits and costs of those programs.

Translate information: WSIPP helped the juvenile courts and the juvenile Rehabilitation Administration deterimine which effective and costbeneficial programs could be feasibly implemented in Washington.

Policy action: The juvenile courts choose two programs to implement; the legislature directed WSIPP to evaluate these programs.

Figure 8.1.  WSIPP policy process. Rebecca Goodvin and Stephanie Lee, “Promises and Pitfalls of Evidence-​based Policymaking,” Psychology, Pubic Policy and Law (2017) 23 (4): 490.

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the world of policymaking. How we can more closely study and learn from people’s experiences, the better we can create public policy to create better outcomes for those folks.” Directing WSIPP places Lee in charge of a large research organization. “We have 21 full-​time staff, we’re primarily researchers with Master’s and PhDs in various disciplines, [and] we also have some administrative and support staff. Our annual budget is roughly $3 million; it fluctuates from year to year. Most of our funding comes from the State of Washington for specific research assignments.” Lee observed, There’s no other state that I know of that has a similar organization, although a number of states have wonderful research shops within their legislative services. There are a lot of states that are doing interesting and innovative things, [but] I think the way we’re constructed is a little bit different, and that sets us apart, in terms of the legislature actually creating our organization, rather than relying on a university to produce the kind of work that we do.

Understandably, Lee receives queries from other states about optimizing various social programs; however, WSIPP is state funded, so the focus, per legislative mandate, is on Washington State. As a result, WSIPP was prompted to rely on private organizations to provide technical assistance to other states, helping to establish Results First, funded by the Pew Charitable Trust and MacArthur Foundation. Our first endeavor where we were working for the MacArthur Foundation [was] to create a version of our benefit/​cost tool that could potentially be modified by other states. That eventually evolved into the work of the Pew/​MacArthur Results First initiative. When we get calls from individual states asking how to figure out benefit/​cost analysis, we refer them to the Pew/​MacArthur Results First initiative. They have funding to provide technical assistance to states while we do not. We consciously made the effort to train their staff so they can train other states.

As a state agency, WSIPP exists at the interface between localities and national activities. Lee understands the challenges presented to WSIPP: That locally based approach could be seen as insular, but at the same time, there is this big push to think about not just what works but what works for whom, and where, and how. So that folks are thinking more about not just in general what’s an effective strategy, but would that strategy that’s been tested elsewhere

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really work for us? And if we think it will, then let’s do it. But let’s make sure to follow it up with some more local evaluations of that program in the location.

Lee also appreciates that WSIPP is a pivotal organization in the evidence-​ based policy movement, interfacing with think tanks, foundations, and universities, not only in the United States but internationally, as well. I think a lot of the interesting things about our work is that once we started publishing on our website, the number of requests coming through from other states and other countries has really ballooned. It’s clear there is demand for this kind of work. It highlights the challenges of being this small organization with this heightened demand for results and information. Organizations like Pew[/​ MacArthur] Results First can help bridge that gap. It sounds like J-​PAL has been doing quite a lot in that area to bring these kinds of skills out into the world beyond their academic foundations.

Significantly, Lee views WSIPP’s role as part of a larger project “to democratize access to the evidence base, by increasing the number of people who have the expertise to do that kind of work.” Furthermore, WSIPP also represents significant management oppor­ tunities with regard to continually upgrading state social programs. “I think there are a lot of folks out there who’ve got wonderful ideas and are really making efforts to implement what’s been demonstrated to work in other places. I think the challenges moving forward will be about continuing to build the evidence base and as society moves forward having the ability to constantly test what is being done,” Lee says. The opportunity for continual improvement by embedding rigorous research in existing programs is evident. It’s really that follow-​through that’s important:  once you’ve done something that you think is really going to work to make sure that it really does work and then testing the conditions about how it works best and for whom it works best, are going to be really important questions that we investigate. And I do think it’s really important that we not leave out that part of the equation. So, implementing what works is wonderful, but it’s not the end of the road.

The key, Lee asserts, is staying on task: “It’s really easy to build yourself into a corner once you put in place all these scaffolds for implementing high-​ quality programs. But if you’re not constantly learning from what you’ve been doing it’s easy to start drifting in the wrong direction and not even know it.” In other words, continual program improvement applies to WSIPP

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as much as to the programs it evaluates, or as Lee summed up: “There’s a lot to be said about this organic development of research capabilities and capacity driven by state interests and state needs.”

RESULTS FIRST

Extrapolating from WSIPP, the Pew/​ MacArthur Results First was established in 2010 with a $10  million grant designed to encourage states to adopt benefit–​cost analyses to optimize social programming. Gary VanLandingham, who was Director of Results First of the Pew Center on the States, observed that state budgeting had evolved from simple additive accounts to sophisticated computer forecasts, which could be adapted to enhance decision-​making. From that observation VanLandingham convinced Pew to expand the WSIPP model to other states interested in optimizing legislation. Eventually, 14 states signed up for what VanLandingham described as “a transformation in how government makes its toughest choices.”7 Sara Dube, current Director of Results First, says the initiative now partners with 27 states and 10 large counties, mostly in California. Boasting 20 staff and consultants, Results First focuses on research tools and developing a clearinghouse database. Dube admits to being skeptical about the venture, at first: “At the beginning we made altar calls to see if folks were interested; we were pleasantly surprised to see that people were interested, clamoring for a way to increase their use of evidence. It seemed that fiscal austerity contributed to states’ making the best of limited resources.” Pew/​MacArthur Results First now provides direct training and technical assistance in capacity building for states and counties. Dube recalled that initially, “It became very clear that staff didn’t have the skill set to take this and run with it, so we started with a few key staff—​midlevel staff—​in agencies and legislative committees. Training has been hands-​on, supplemented by webinars, the content state-​specific.” As major foundations, such as Gates, Annie E.  Casey, Robert Woods Johnson, Arnold, and Bloomberg, have embraced evidence-​based funding, Dube says Results First’s strategy voice has been amplified, in a relatively short period: “I do think this is a movement, that we’re moving in the direction with policymakers doing the best with taxpayers’ dollars and the use of evidence can help them get there. The states will be the focus of a lot of this.” Along with WSIPP and Results First, the Laura and John Arnold Foundation (now Arnold Ventures) has been pivotal in the evidence-​based movement. After acquiring the Coalition for Evidence-​based Policy and

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Jon Baron, its founder, Arnold Ventures became the go-​to philanthropy for funding RCTs. As rigorous evidence was incorporated in decision-​making in social policy, a network of experts evolved, researchers who shared studies at conferences and on the Internet as well. Notably, the network represented federal and state agencies, think tanks, and professional organizations, as well as commercial research firms.

JON BARON

The founder of the Coalition for Evidence-​based Policy, Jon Baron, recalled the provenance of his interest in empiricism in social policy. My father was a medical researcher; we’d talk about controlled studies over the breakfast table. I’d come back from school and say, “There’s this interesting policy idea,” [and] he’d say, “Well, that’s very interesting, but is there a controlled study to prove it?” So, I found that very interesting at the time, but I guess it stuck. He was relentless in that. Then I saw that researchers were not good at influencing the policy process, so I thought this was an area where I could do well. I thought I could bring evidence to the policy process.

But his pursuit of field experiments to amplify social policy followed later. With degrees in law and public policy, Baron worked in Congress for 5 years, followed by stint with the Department of Defense for a similar period, and then he transitioned to chairing an international trade commission. Reviving his interest in rigorous evidence to improve policy, Baron launched the Coalition in 2001. The work of private research firms, the Manpower Demonstration Research Corporation (now MDRC), Abt, and Mathematica Policy Research, proved formative, particularly their role in welfare reform during the 1990s. “MDRC’s randomized trials were the first large-​ scale [trials] under real-​ world conditions,” Baron remembered. The momentum behind evidence-​based policy could be traced back to 10 individuals in federal agencies and private research firms, resulting in a series of large-​scale RCTs. While there were about 100 RCTs in 1960, the number jumped to 10,000 per year in the 1990s. An eye-​opener for us was in 2009, when the Office of Management and Budget distributed guidance to encourage RCTs, expanding the Nurse-​Family Partnership with a $10  million pilot. The Maternal, Infant, and Early Childhood Home Visiting Program and social investment fund created

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an enormous pull [to the effect] that you had to have rigorous evidence to get in the game.

Subsequently, RCTs were encouraged through a funding stream prioritizing evidence-​ based interventions. Preferring interventions demonstrated through RCTs has been an important policy innovation. “Tiered evidence provides (1)  flexibility, (2)  innovation, and (3)  scale-​up, the logic to continually re-​allocate funding from indeterminate to effective interventions,” Baron said. Baron admitted that the evidence-​ based policy movement can be politicized, although he contended that rigorous evaluations are nonpartisan. Evidence-​based policy is neither liberal nor conservative. Whatever government is funding should have a positive impact on people’s lives. If we do social spending as usual, sending money out the door through a turn-​the-​crank method where evidence plays no role in what gets funded, there’s every reason that you’re not going to get the hoped-​for effects.

In sum, evidence-​based policy “is empirical, practical, and the shortest path to improving people’s lives.” By the same token, rigorous evaluation of large-​ scale programs, which seemed like a good idea upon inception, has yielded disappointing outcomes, but for specific reasons, he acknowledged: “Large-​ scale studies of heterogeneous populations—​the Job Training Partnership Act, Head Start—​tend to produce negligible outcomes, so it’s better to evaluate specific interventions.” “Over the past 17  years, since the Coalition for Evidence-​ based Programs, there has been tremendous progress building evidence, studies using random assignment in particular or other rigorous methods,” Baron asserted. “Randomized trials have become more accepted in government and the popular press also. RCTs provide the strongest evidence that a program works or not; the number of RCTs has just exploded.” Despite proliferation, effective outcomes remain rare: “Surprisingly few programs produce the hoped-​for effects; the number of programs that produce meaningful change in someone’s life is still small.” As RCTs were promoted by the federal government, the reputation of the Coalition grew, and “14 years later, it was folded into the Laura and John Arnold Foundation.” Currently, Arnold Ventures has promised to fund any credible RCT. “We’re funding 70 RCTs now, using administrative data, which make lower-​cost RCTs possible.” Typically, Arnold Ventures RCTs run about $700,000. To determine a credible study, we look for “a strong

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research team, and prior promising evidence.” To date, “we’ve funded every good proposal that’s come through the door.” Baron noted that RCTs are staff-​intensive projects, which explains why few university departments mount them. “To run an RCT you have to be able to run an organization, so this is not a small experiment for a university economics department,” he observed. Yet, a small number of universities are successfully deploying RCTs, particularly Harvard and MIT. To encourage rigorous evaluations, Arnold Ventures has developed a “Move the Needle” initiative, funding replications of RCTs showing positive outcomes. “The resultant synergy between government and private institutions has amplified evidence-​based policy,” Baron concluded. Representing an unusual persona, the researcher-​entrepreneur, Baron easily moved from the nonprofit Coalition for Evidence-​based Policy to Arnold Ventures, a major philanthropy. Having Arnold Ventures as a base signified that the credibility of RCTs was on the rise, not just the purview of green eyeshade researchers. Laura and John Arnold were willing to give Baron the freedom to fund and evaluate the quality of studies constituting an ever-​larger library of evidence-​based programming.

LAURA AND JOHN ARNOLD FOUNDATION

John Arnold, a public-​school graduate keen on math and economics, attended Vanderbilt University, from which he landed a job as a petroleum and gas trading analyst for a booming Houston energy company, Enron. Adept at analytic work, in 2001, Arnold received an $8 million bonus. While Enron would later fail due to illegal financing, Arnold was not implicated. He soon converted his savings to start a hedge fund, Centaurus; by 2007, Arnold was America’s youngest billionaire. Arnold’s wife Laura grew up in Puerto Rico, becoming a formidable intellect in her own right, earning degrees from Harvard and Oxford and culminating her studies with a law degree from Yale. With $3 billion in assets from liquidating the hedge fund, the Arnolds embarked on a career in philanthropy. Initially expecting to make direct contributions to emerging innovations, such as KIPP schools and Teach for America, the Arnolds became skeptical of social programs touted by good intentions. “There was something about that narrative that never sounded right to us,” John recalled. Laura’s reservations were similar. “You see this lack of rigor and this emphasis on anecdote in a lot of how nonprofits promote themselves. It all felt a little soft to us.” Worse, she observed, “The problems weren’t getting better. They were getting worse despite enormous investments in areas such as

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education.” As David Callahan recounted, “The more the Arnolds explored the policy world, the more they came to believe that much of the intellectual edifice underpinning the social and public sectors was flimsy.”8 Rather than sort through an unending list of new programs, the Arnolds determined to evaluate the same programs with respect to vigorous evidence. Laura’s TEDx talk summarized their motivation for focusing on evidence-​ based research: First, we need more randomized controlled trials to figure out what works. Those of us who work for or with governments can steer discussions and funding toward randomized trials. Second, governments need to follow the evidence in deciding what to fund. That includes redirecting funding from things that have been done for a long time but don’t work to programs with evidence of success. We can all contribute to this culture shift. And third, we need better data. We can encourage data sharing, create usable and interactive data systems so that we don’t spend time and money trying to harmonize data sets that don’t talk to each other. And we can foster collaborations among states, nonprofits, and government agencies to try to get this right.9

In 2008, the Laura and John Arnold Foundation was established, according to its website, as “a philanthropy dedicated to tackling some of the most pressing problems in the United States. We invest in sustainable change, building it from the ground up based on research, deep thinking, and a strong foundation of evidence.” With a team of 80 experts in health, education, criminal justice, and public finance, the Arnold Foundation began funding rigorous evaluations of social programs. In 2015, the Arnold Foundation absorbed the Coalition for Evidence-​Based Policy, which had been founded by Jon Baron to promote RCTs in social programming, in the process ranking programs with regard to substantive evidence. Changing its name to Arnold Ventures, the foundation pledged to fund all credible RCTs. In July 2017, Jon Baron introduced “Straight Talk on Evidence,” noting that conventional incentives to researchers, including publication in peer-​ reviewed journals, prospective funding of future projects, and prestige in the research community, encouraged maximizing positive outcomes while minimizing qualifying results. Taking a critical stance on studies promoted as evidence-​based, Baron positioned himself as a referee, calling fouls when researchers failed to be forthcoming in their studies. For example, a 2019 study by the Department of Health and Human Services of nurse home visiting programs found “weak or no effects”; however, the report conflated four approaches, three of which—​Early Head Start’s Home-​Based Option,

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Healthy Families America, and Parents as Teachers—​compromised the outcomes of the fourth—​Nurse-​Family Partnership. Baron recommended separating outcomes by program intervention, which would reveal more information and amplify research.10

CONTROVERSY

In 2014, the Arnold Foundation came under scrutiny for questioning the solvency of public pension funds; with the Pew Foundation, Arnold had invested $4.8  million to analyze the integrity of state pensions. Then, congruent with Arnold Ventures’ focus on public finance, John Arnold contributed $2.8 million for investigations into state campaign finance on the part of a journalism nonprofit, the Center for Public Integrity (CPI), stirring additional controversy as it followed other titans of capital who had acquired media outlets: Rupert Murdoch’s purchase of The Wall Street Journal, Jeff Bezos’ acquisition of the Washington Post, and Douglas Manchester’s snapping up of the San Diego Union-​Tribune. Bill Buzenberg, formerly of National Public Radio and head of CPI, assured the public there was a “firewall” between contributors and editorial independence.11 Aside from the specter of injecting bias into journalism, along with the Pew Center on the States, the Arnold Foundation generated debate by advocating pension reform by transferring extant defined benefit plans to defined contribution plans, thus subjecting benefits to the whims of the market. Eventually, the Arnold Foundation funded pension reform proposals in California, Nevada, Florida, Rhode Island, Kentucky, Colorado, Montana, and Illinois.12 Among the most fiscally troubled of states was Illinois. A  redoubt of liberalism, boasting a world-​class city (Chicago), three world-​class universities (the University of Chicago, Northwestern University, and the University of Illinois), and consistent Democratic legislative majorities, Illinois had become the poster child of public pension excess. Written into the state constitution, public pensions assured retirees of benefits at the expense of other state priorities. In 2018, the Taxpayer Education Foundation (TEF) released its twelfth annual report on the state’s pension liabilities, noting that almost 25% of tax revenue was dedicated to public pensioners, $8.6 billion for six statewide funds. From data gleaned from a Freedom of Information Act request, TEF counted more than 20,000 pensioners receiving more than $100,000 in state benefits. To contain rising pension obligations, TEF suggested new hires be enrolled in defined contribution plans.13

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David Sirota, a journalist, noted that Arnold and Pew elided more progressive solutions to the pension crisis haunting many cities and states, which would preserve traditional pension benefits and replenish pension funds depleted by the financial crisis and the chronic refusal of politicians to make actuarially required contributions. For example, while sounding the alarm about pension liabilities, Pew and Arnold have not aggressively pressed to raise taxes on wealthy Americans like Arnold or to reduce taxpayer-​funded corporate subsidies that are typically far larger than pension fund shortfalls.14

Regardless of ideological preferences, the public pension crisis has contorted public finance. The University of Pennsylvania Wharton School of Business places public pension obligations at $4.4 trillion, representing one fifth of the national debt.15 In the absence of sharp increases to pension funds or paring back benefits, obligations to public pensions will continue to grow at double-​digit rates, effectively crowding out other priorities, including public education, transportation, public safety, and research and development. In a volatile controversy, Pew and Arnold have advocated retreating from defined benefit plans, a conservative position, while at the same time funding education innovation and criminal justice reforms, nominally a liberal position. In this respect, it is worth noting that, as there are no panaceas in public policy, there are also no ideal policy proscriptions. A democratic society depends on a full array of alternatives provided to an informed public, not fewer options prescribed by diktat.

THE EVIDENCE-​B ASED POLICYMAKING ACT OF 2018

The evidence-​based policy movement reached an apogee with President Obama’s signing legislation empaneling the Evidence-​based Policymaking Commission, on March 30, 2106. Comprised of 16 representatives of government, commerce, and the academy, the Commission constituted a “who’s who” of rigorous research in public policy. In September 2017, the Commission released its report, The Promise of Evidence-​based Policymaking.16 A testament to legislative acumen during the turmoil of the Trump presidency, the report became federal law, the Evidence-​based Policymaking Act of 2018 (P.L. 115-​435). In focusing on federal administrative data, the Act emphasizes three themes:  strengthening privacy protections, improving secure data access, and enhancing government’s evidence capacity.17

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With respect to improving federal data capability, the Act mandates federal agencies to pursue evidence-​based policy in planning, designating staff, and acquiring expertise. Far more than incremental adjustments in public agencies, the Act provides a template for future federal activity. Specifically, the Act requires an evidence-​based plan, including data to be collected, methods to be employed, as well as “a list of any challenges to developing evidence to support policymaking, including any statutory or other restrictions to accessing relevant data.” Moreover, each agency will designate a senior employee as an “evaluation officer,” with responsibility to“continually assess the coverage, quality, methods, consistency, effectiveness, independence, and balance of the portfolio of evaluations, policy research, and ongoing evaluation activities of the agency.” To augment the evaluation officer, the Act provides for a senior statistical agent, complemented by a Council on Statistical Policy. Finally, the Act will be overseen by an Advisory Committee on Data for Evidence Building.18 Following initiatives of the Bush and Obama administrations, the Evidence-​based Policymaking Act of 2018 not only formalized federal mandates regarding rigorous research, but also was quickly embraced by prominent federal agencies, such as the Department of Health and Human Services. States as well as government contractors will have to incorporate evidence-​based practices in their reporting to federal agencies, with evaluation officers empowered to require rigorous evidence as a condition for receipt of federal funds. While states, such as Washington State, and contractors, such as the Maternal, Infant, and Early Childhood Home Visiting Program, will be able to comply with provisions of the Act, others are on notice that anecdote, intuition, and guesswork will no longer be sufficient for pulling down federal funds. Much as foundations have laid the groundwork for evidence-​based programming, an amplified federal role adds substantive gravitas to the movement.

CODA

The Evidence-​based Policymaking Act thus represents the culmination of state and foundation ambitions to make social programming more congruent with rigorous research. While proponents of empiricism in the public square will greet the Act with enthusiasm, the role of philanthropy remains controversial. While the relationship between foundations and government has been fraught, it has also been complementary. As David Callahan, founder of Inside Philanthropy and author of The Givers,19

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observed, “Democracy is great but it’s not good at risk taking.” Slow to innovate, the nation has relied on foundations to fund demonstrations of promising interventions; yet, the cost, literally and figuratively, has been government’s forfeiting taxes that would have been otherwise collected from wealthy philanthropists. This trade-​off is not simply a matter of moral metaphysics. Callahan observed, “Government develops a program, with a constituency, then the program is hard to kill.” On the other hand, “Philanthropy is incredibly valuable in operating as the risk capital for society, engaging in innovation, experiments, and discovery, while also subsidizing activities the majority doesn’t want to fund, sticking up for minority viewpoints that may be marginalized or oppressed by the majority.” Thus, the charitable foundation plot line is well known, Callahan noted: “(1) fund an initial pilot, (2) evaluate the program, (3) if positive, replicate and scale-​up.” Yet, darker, possibly sinister, possibilities emerge as well. “Philanthropy can be a form of money in politics, developed by living donors and billionaires,” observed Callahan, “so philanthropy is an amplifier of plutocratic influences of the upper class.” The same largesse that funds philanthropy propels “economic inequality, invariably equat[ing] to civic and political inequality via PACS, lobbying, and philanthropy.” Structured into institutions of the civic sector, egregious wealth becomes “problematic when more of the money for civic society comes from people at the top, the upper class is colonizing one more sector of society, while a mass civic culture shrivels up.” Moreover, the dispersal of philanthropic wealth requires specialized administrative capacity: a “managerial elite” with the requisite fiscal and social skills. In recent decades, public resentment has become palpable as “a large number of people are alienated and marginalized from politics and are angry at elites.” Eventually, philanthropy is the fuel for a vast infrastructure of highly educated professional advocates and policy wonks who wield ever more influence while people in the rest of the country feel that they are not heard. On the left, anger is directed at the business elite; from the right and center, anger is directed at self-​appointed experts who believe they can solve all our problems. They have all their fancy degrees and credentials, call more and more shots.

The consequences have been political, as “Hillary Clinton was defeated after conservatives exploited anger toward foundations that are essentially shadow elite entities,” Callahan averred. Omission is another problem:  “You can’t wave your magic wand and get your philanthropic dollars going to where those dollars should be

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going for the sake of equity, and that’s a problem with philanthropy,” said Callahan. While rural America has been neglected as capital and talent migrate to cities, some foundations have refocused their giving. With respect to George B. Kaiser, whose eponymous foundation has helped revitalize Oklahoma City, Callahan observed, “As in other states and localities across the U.S., public sector resources in the Sooner State have suffered from a long, drawn-​out decline over the past several decades. That has left local governments without the means to properly fund public education, healthcare, parks and more.”20 Despite such public commitments, there is little likelihood that foundations will supplant or crowd out government funding. As pundit Jennifer Rubin has observed, among the rifts in any dynamic, modern society—​race dividing white from black, ethnicity splitting Anglos from Hispanics and Asians, wealth separating the rich from the rest—​an inescapable political divide has become urban versus rural.21 The political consequences are inscribed in the Constitution, through which more populated regions are more represented in the House of Representatives, while each state receives two Senators, balancing the needs of less populated regions. This lesson from Government 101 has not only reverberated throughout recent elections, especially the 2016 presidential election when rural American overwhelmingly rejected the Democratic candidate, but also has polarized Congress.22

NOTES 1. https://​en.wikipedia.org/​wiki/​Washington_​State_​Institute_​for_​Public_​Policy 2. Washington State Institute for Public Policy, “Washington State Institute for Public Policy: Origins and Governance” (Olympia, author, 2009): http://​www. wsipp.wa.gov/​ReportFile/​1050/​Wsipp_​Washington-​State-​Institute-​for-​Public-​ Policy-​Origins-​and-​Governance_​Full-​Report.pdf 3. http://​www.wsipp.wa.gov/​CurrentProjects 4. Quoted in Jonathan Kaminsky, “The Great Evaluator,” State Legislatures, July/​ August 2013, p. 53. 5. Elizabeth Drake, “Reducing Crime and Criminal Justice Costs,” Justice Research and Policy, 2012, vol. 14, no. 1. 6. Stephanie Lee, Elizabeth Drake, Annie Pennucci, Grethen Bjornstad, and Triin Edovald, “Economic Evaluation of Early Childhood Education in a Policy Context,” Journal of Children’s Services, 2012, vol. 7, no. 1, 53. 7. Kaminsky, “The Great Evaluator,” p. 55. 8. David Callahan, The Givers (New York: Knopf, 2017), pp. 147–​51. 9. https://​www.arnoldventures.org/​stories/​laura-​arnold-​delivers-​tedx-​ pennsylvania-​avenue-​talk-​importance-​using-​rigorous-​evidence-​solve-​problems

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10. https://​www.straighttalkonevidence.org/​2019/​02/​25/​major-​federal-​ randomized-​trial-​finds-​disappointing-​early-​effects-​of-​home-​visiting-​for-​low-​ income-​families-​but-​obscures-​a-​potentially-​important-​silver-​lining/​ 11. Rick Cohen, “Questions: Laura & John Arnold’s Gift to Investigative Journalism,” Non-​Profit Quarterly, August 8, 2014: https://​nonprofitquarterly.org/​2014/​08/​ 08/​questions-​on-​laura-​john-​arnold-​s-​gift-​to-​investigative-​journalism/​ 12. David Sirota, “Enron Mogul John Arnold Funds State Politics, and Now Journalism About Money in State Politics,” International Business Times, August 6, 2014: https://​www.ibtimes.com/​enron-​mogul-​john-​arnold-​funds-​state-​ politics-​now-​journalism-​about-​money-​state-​1650110 13. http://​www.taxpayereducation.org/​2018/​06/​ 12th-​annual-​illinois-​pension-​report/​ 14. Sirota, “Enron Mogul John Arnold Funds State Politics.” 15. https://​knowledge.wharton.upenn.edu/​article/​ the-​time-​bomb-​inside-​public-​pension-​plans/​ 16. https://​www.cep.gov/​cep-​final-​report.html 17. https://​bipartisanpolicy.org/​wp-​content/​uploads/​2018/​12/​Foundations-​for-​ Evidence-​Based-​Policymaking-​Act-​of-​2018.pdf 18. https://​www.congress.gov/​115/​bills/​hr4174/​BILLS-​115hr4174enr.pdf 19. Callahan, The Givers. 20. Phillip Rojan and David Callahan, “Philanthropy When Government Falls Short,” Inside Philanthropy, March 28, 2019. 21. Jennifer Rubin, “Here’s an Issue that Democrats Can Jump On,” Washington Post, April 11, 2019. 22. Michael Tomasky, If We Can Keep It (New York: Liveright, 2019).

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CHAPTER 9

Abdul Latif Jameel Poverty Action Lab

H

aving encountered Jeffrey Sachs, a Harvard developmental economist, in Moscow, where she was teaching French, Esther Duflo had a change of heart about a discipline she had once dismissed as “moronic.” Returning to Paris, she and her then-​boyfriend, Emmanuel Saez, now a frequent collaborator with another French economist, Thomas Piketty, on economic inequality, enrolled at MIT to study economics. At MIT, Abhijit Banerjee, an economist from India, intrigued Duflo by proposing research based on natural experiments. That class left Duflo configuring ways to mount randomized controlled trials (RCTs) in developing countries to determine which development projects actually worked. In the absence of rigorous research, the development default tended to be what economists found fashionable:  major infrastructure projects, mass immunizations, microfinance. Fads violated Duflo’s preoccupation with efficiency, however. “If you’re a developmental economist—​at, least in my view—​you realize there are many, many, many hundred-​dollar bills lying on the sidewalk,” she asserted. “There are efficiency gains waiting everywhere.”1 RCTs optimized efficiency, but also provided benchmarks for assessing efficacy of outcomes; Duflo was hooked. Enthusiasm about RCTs prompted Duflo and Banerjee to establish the Abdul Latif Jameel Poverty Action Lab (J-​ PAL) at MIT in 2003. The “randomistas,” as they became known, filled in a space in developmental economists, represented by two dueling giants: Sachs, an advocate of the United Nations Millennial Development Goals, who contended that only massive investments in developing countries could mitigate the profound deficits in health, education, and poverty,2 versus William Easterly,

Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

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of New York University, who argued that trial-​and-​error methods associated with capitalism presented from-​the-​ground-​up interventions more relevant to impoverished peoples.3 Into the fray wandered Paul Collier from Oxford University, contending that a nation’s institutional infrastructure was essential for prosperity. Advancing a series of developmental charters as preconditions for developmental assistance, Collier proposed “independent service authorities”—​ mediating institutions overseeing distribution of goods, oversight of services, and financing.4 A logical complement for Collier’s authorities would be conducting RCTs to determine which developmental projects actually worked. In building J-​PAL, Banerjee and Duflo were deploying a research institution that operated in the policy space between grand development projects and laissez-​faire capitalism. J-​PAL’s insistence on RCTs was paradoxical insofar as it parachuted a First World technology into the Third World, raising the specter of technological neo-​colonialism. But any accusation to that effect was blunted by Banerjee’s upbringing in Calcutta and Duflo’s insistence on reviewing local projects through extensive travels in Asia and Africa. By 2006, J-​PAL had mounted 206 RCTs worldwide, and Duflo’s leadership garnered commensurate honors:  a MacArthur “genius” award in 2009 and the 2010 Clark medal to an economist under 40. Banerjee and Duflo portrayed the J-​PAL approach in Poor Economics, presenting five observations about poverty: • The poor operate with inadequate information, contributing to errors in judgment. • Impoverished people lack institutional supports important for optimal decisions. • Absent access to some markets, the poor pay excessive prices for necessities. • A history of failed institutions often consigns the poor to penury. • Expectations of the poor frequently devolve into self-​ fulfilling prophecies. Community-​based projects not only make development more apropos for the poor, but also disabuse experts of grand designs in poverty alleviation: If we listen to poor people themselves and force ourselves to understand the logic of their choices, if we accept the possibility of error and subject every idea, including the most apparently commonsensical one, to rigorous empirical testing, then we will be able not only to construct a toolbox of effective policies but also to better understand why the poor live the way they do.5

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In 2017, Duflo presented the Ely Lecture to the American Economic Association; her topic was wryly understated:  “The Economist as Plumber.”6

JOHN FLORETTA

As Director of Policy and Communication, John Floretta has been involved with J-​PAL since 2011, after working with the United Nations in China, where he acquired Mandarin. Five years later and uncertain if he wanted to remain a China specialist, polymath Floretta recalled his fascination with math, calculus, and economics. At the Fletcher School at Tufts University, he recalled, “A lot of the people on the policy and communications team have a focus on public policy or public administration, but then loaded up on quantitative courses in econometrics.” Subsequently, “I found myself taking a class here with one of the founders, Esther Duflo,” which proved a career-​altering event. “At that time J-​PAL was setting up its policy team. I was really interested in this idea that precisely measuring the impact of programs should play more into policy and practice than it did at least in my UN experience. And I was really excited to be part of a team that was communicating findings from the research,” he recalled. Having used RCTs to evaluate the benefit of interventions in developing countries, such as deworming children infected with intestinal parasites and insecticide-​treated bed nets to prevent malaria, J-​PAL’s India office embarked on experiments to determine how best to improve elementary education, in conjunction with Pratham, a nongovernmental organization. To address the problem of young students’ falling behind in academic progress, Pratham introduced Teaching at the Right Level (TaRL), where groups of children with similar levels of proficiency would meet for 2 hours daily with a community instructor to bring them up to grade level. Having demonstrated proof of concept in urban settings, Pratham introduced TaRL in rural schools, which required relying on volunteers for instruction. A  series of RCTs demonstrated the value of TaRL in improving the knowledge and skills of students who had lagged behind; however, the prospect of introducing TaRL nationwide to 33 million students not only was daunting, but also raised the specter of external validity as well:  could an intervention demonstrated by a small number of RCTs be generalized to students nationwide? Subsequently, Pratham’s approach was modified, reducing instruction time to 1 hour daily. Moreover, instruction was assigned to community representatives

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trained in TaRL so that instruction did not detract from in-​class time overseen by teachers but was added to the instruction day and was managed by nonteachers. Later, RCTs would document that TaRL students improved significantly in their ability to identify letters correctly and to read short paragraphs compared to controls, justifying nationwide replication.7 Four years in India working with Pratham provided Floretta with direct exposure to the promise and problems of RCTs in improving policy. Returning to J-​PAL, he has managed communications and policy for 4 years. Floretta is clearly bullish on RCTs: I think there was a big push among economists to have a precise measurement of antipoverty programs, what’s actually working in the field. If you look back at the history of RCTs, you see a lot of work being done in the U.S.—​agriculture, political science. But it wasn’t until the mid-​1990s, with the work that Michael Kremer was doing in Kenya, the PROGRESA experiments in Mexico, and Banerjee’s work in India, that the ability to run a large-​scale study like that in developing countries became possible. J-​PAL, in collaboration with Innovations in Poverty Action (IPA), has been able to help make that happen. So that was quite novel—​there wasn’t a lot of applied experimental work happening at this scale before; J-​PAL and IPA helped drive that infrastructure.

As field experiments proliferated in developing countries, J-​PAL’s list of associates in universities around the world grew to over 170 researchers from 54 universities, significantly more than “five or ten” at J-​PAL’s inception. Floretta noted that, in being labor intensive, RCTs require significant organizational capacity. “On the ground you need the ability to do large-​ scale data collection and have team members who are building partnerships with government [and] NGOs, and that imposes a huge investment by J-​ PAL and IPA.” India and Pratham are illustrative: “In India now there are 70 randomized evaluations ongoing that are being implemented by the J-​PAL regional office by the staff of about 150 and a group of enumerators of over 1,000,” he explained. The number of countries that J-​PAL and IPA have enlisted for RCTs reflects the movement of evidence-​based policy in developing countries. Floretta said, I think it is a movement with regard to the number of researchers and projects. [It is] a larger movement in evidence-​based policymaking, and part of a results-​ based agenda for international development. As quickly as J-​PAL has grown, it’s still a minority of projects in international development. Among the vast

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majority of US AID or UN projects, randomized evaluations are still not very common as a tool for examining program effectiveness.

Despite being at the forefront in policy innovation, Floretta acknowledged institutional obstacles in international development. As Pratham found, the Indian educational bureaucracy was initially resistant to a nonprofit’s intruding in its affairs; yet, TaRL had bugs that needed to be worked out. “It takes a bit of bravery to really want to know the precise outcome of your program,” Floretta reflected. Initially, we constructed an RCT to see if adding an hour to the school day would increase literacy, but it didn’t work. So, we did another which unpacked features of the intervention, and the second RCT revealed significant improvements, so that model is now implemented for 20 million students. Now, we’re thinking about generalizing the intervention to other contexts, such as Africa, where you may have the same problem.

Modifying the Pratham approach, subjecting TaRL to continuing evaluation, provides essential evidence for program expansion. “There have been 7 TaRL RCTs in India, focusing on tracking each kid through the day with regard to their learning level, but also inserting additional fun activities targeted for what they are. We’ve learned there are cost-​effective and engaging ways to pull kids aside for remedial education.” Thus, J-​PAL continues to innovate with TaRL. “By now we’ve tested all kinds iterations,” Floretta said. “It could be 2 hours a day, it could be a summer camp, but in this case the R&D was done outside the government system, then brought inside, so R&D produces a private good, which an NGO can use to raise resources, while also becoming a public good.” J-​PAL’s work in India has implications for education elsewhere. Research by J-​PAL staff and associates informed the World Bank’s 2018 report, Learning to Realize Education’s Promise. Notable among the multiple deficits that impede development in Africa is basic education, which varies with economic inequality, as noted in Figure 9.1. J-​PAL’s collaboration with Pratham has also informed remedial education in the United States.Floretta noted, In Chicago, there’s a tutoring project focusing on math skills for boys so they can graduate from high school. If you pull boys aside for math tutoring—​one tutor for two boys—​45 minutes a day for 5 days, that type of program is really effective at closing the gap in math skills. So that program is very similar to the one we evaluated in India.

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F M F M Poor Rich

Togo

F M F M Poor Rich

Niger

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Not competent

Benin

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World Bank, Learning to Realize Education’s Promise (Washington, DC: Author, 2018), p. 7.

F M F M Poor Rich

F M F M Poor Rich

High competency

Côte d’lvoire Burkina Faso

Low competency

Cameroon Congo, Rep.

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Figure 9.1.  Children from poor households in Africa typically learn much less.

100

75

50

25

0

25

50

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100

Senegal

F M F M Poor Rich

Burundi

F M F M Poor Rich

Percentage of grade 6 PASEC test takers in 2014 who scored above (blue) and below (orange) the sufficiency level on reading achievement: poorest and richest quintiles by gender, selected countries

Percent

Two RCTs, conducted with the cooperation of Chicago Public Schools, evaluated an intervention developed by SAGA Innovations, in which one tutor worked with two students, and they found significant improvements: Students in SAGA learned an extra 1 to 2  years’ worth of math beyond what their peers learned in an academic year. Tutoring raised participants’ average national percentile rank on 9th and 10th grade math exams by more than 20%. GPAs increased by 0.58 out of a 4.0 grade point scale, and the students’ failure rates in math fell by more than 50%.8

Nationwide, SAGA Innovations now tutors 2,500 students at risk of dropping out of high school. Ultimately, the value of education reform is to improve teacher training, proffered Floretta. In that regard, “Harvard’s School of Education has two courses where a lot of the work they’re drawing from has been produced by J-​PAL-​related researchers.” Floretta conceded that RCT outcomes can destabilize the status quo, but with a twist. In one Indian jurisdiction, TaRL challenged the local educational bureaucracy. In Bihar, the director was transferred, but there was also a 20% reduction in corruption. Later, he was able to introduce aspects of the [TaRL] study at the central level. That allowed funding to go directly from government to citizens, so you could bypass [the] layers populated by corrupt officials. The political economy windows were more open a couple of years later for a policy like that.

But RCTs can also identify efficiencies, Floretta asserted. With respect to India’s National Work Guarantee Act, researchers found that residents of Bihar were having difficulty accessing employment. “The RCT allowed the researchers to measure that you could generate the same number of work days with a 20% cost reduction by cutting out that leakage in the system. The RCT can point at that compared to a control group, this program is delivering the same result at a 20% savings.” Duflo deserves much of the credit for institutionalizing RCTs in development economics, according to Floretta. “Part of J-​ PAL’s role is professionalizing randomized evaluations. Esther Duflo was instrumental in developing [randomized controlled] trial registration at the American Economic Association.” J-​PAL also encourages localities to embed RCTs in ongoing programs, especially for the underserved, such as the homeless and low-​income populations. Floretta is particularly proud of MIT’s new MicroMaster program, designed to spread the RCT movement internationally. “Our MicroMasters is the first of its kind. If you’re in a developing

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country, you can take 5 MIT courses for as little as $100/​course, and if you pass the course, earning a certificate in data decisions in public policy. Thereafter, you can apply for a blended Master’s degree at MIT. We have the first class starting in the fall of 2020.”9 In addition, J-​PAL and MIT have collaborated with executive education programs, training 5,000 people in the last decade. We did this to democratize the knowledge base. So, a program like this indicates you have these skills, even if you’re a refugee from Syria or weren’t part of the elite from India. If you had the technical skills, this is a signal that you have the technical chops to do this kind of work, independent of the elite path associated with conventional education.

Furthermore, the MicroMasters program also introduced a pedagogical innovation, Floretta noted. Esther Duflo’s and Abhijit Bannerjee’s inspiration came from their observation that if you’ve already flipped instruction by requiring students to read material beforehand, leaving class to work through problems, then why not use the Internet to make education available worldwide? So, the first year is completely nonresidential. MOOCs (Massive Open Online Courses) afford access to a global talent pool, providing a platform to demonstrate skills, then students can come to MIT to finish their Master’s degree.

In sum, Floretta is confident about J-​ PAL’s role as evidence-​based policymaking evolves. With 900 RCTs studies ongoing in 80 countries, J-​ PAL is improving the allocation of public and private resources in some of the most disadvantaged places on the planet. “Bringing evidence into the policy discussion can be really powerful.”10 At the same time, Floretta observed that old distinctions—​developed versus developing nations, the First World versus the Third World—​are being erased as program efficacy, demonstrated by RCTs, migrates across regions and among countries. Globalization, already pervasive in economics, affects research as well.

J-​P AL NORTH AMERICA

In 2013, J-​PAL turned the tables, establishing a North America Division for promoting RCTs in the First World. Having demonstrated the value of RCTs in developing countries, the “randomistas”—​as they became known—​ shifted their focus to the United States. Among J-​PAL’s first projects was a

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natural experiment involving Oregon’s Medicaid program. What would be the findings of comparing a test group with access to Medicaid to a control group left to fend for itself in an adverse healthcare environment? Established in 1965 as Title XIX of the Social Security Act, Medicaid had expanded in subsequent decades, ensuring access to healthcare primarily for the aged in nursing homes, the disabled poor, and young mothers. Medicaid was structured as a federal–​state collaboration; about half of the cost of Medicaid was borne by states, and over time the cost began consuming a considerable share of state budgets. In 2010, the Affordable Care Act (ACA) promised to expand Medicaid to uninsured low-​and moderate-​ income families, offering states sizable funds to defray their costs. Later, a Supreme Court decision interpreted ACA’s Medicaid expansion as a state option. The political turmoil over “Obamacare,” with Democrats defending a complicated expansion of healthcare and Republicans intent on its repeal, made evaluation of its provisions ineluctably attractive. J-​PAL waded into the healthcare controversy, evaluating Oregon’s Medicaid program, generating some of the first experimental data related to ACA. In 2008, unanticipated funding permitted Oregon to expand Medicaid; however, newly available revenues were insufficient to enroll all residents in Medicaid, leaving tens of thousands on a long waiting list. Employing a federal waiver, Oregon officials conducted a lottery, selecting 35,169 individuals (from 29,664 families), out of 89,824 individuals on the waiting list; about 30% of the lottery winners enrolled in Medicaid. One year later, J-​PAL had determined three primary outcomes: the treatment group had more healthcare utilization, had reduced out-​of-​pocket payments as well as medical debt, and had improved self-​reported physical and mental health, compared to the control group.11 Medicaid coverage resulted in significantly more outpatient visits, hospitalizations, prescription medications, and emergency department visits. Coverage significantly lowered medical debt, and virtually eliminated the likelihood of having a catastrophic medical expenditure. Medicaid substantially reduced the prevalence of depression, but had no statistically significant effects on blood pressure, cholesterol, or cardiovascular risk.12

The research continues to determine more long-​term effects. ACA proponents seized on the outcomes, focusing on reduced anxiety among the poor with regard to healthcare costs, while critics emphasized the lack of improvement in physical healthcare; yet, 1  year of outcomes was only a snapshot of what was in all likelihood a protracted problem in

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medical neglect. Regardless, J-​PAL had produced a significant contribution to the healthcare literature via a random-​assignment field experiment.

MARY ANN BATES

The Executive Director of J-​PAL North America, Mary Ann Bates, is responsible for overseeing RCTs in First-​World America. “Moving research to action has been J-​PAL’s tag line from the beginning,” she asserted. Learning of J-​PAL while a grad student in California, Bates moved to Cambridge in 2010. There, working with Larry Katz, Chief Economist in the Labor Department under the Clinton Administration and a Harvard economics professor, Bates secured funding from the Sloan Foundation to replicate J-​PAL in North America. “I think what was so exciting is that we were able to take some of the lessons we’d learned in developing countries and bring them back here. One of the reasons I’ve stayed with J-​PAL is realizing that the learning is going in both directions,” she observed. A focus of J-​PAL North America has been healthcare, Bates said, citing the “hot spotting” project launched in Camden, New Jersey. A family physician in solo practice, Dr. Jeffrey Brenner had won a MacArthur “genius” award for his efforts to better care for patients with multiple disorders.13 Subsequently, J-​PAL North America reached out to him to mount an RCT to better understand how interventions might improve care while being cost effective. Prompted by administrative data showing that a small percentage of people account for a large portion of medical/​healthcare costs, J-​PAL decided to conduct an RCT to determine the outcomes of care management on patients with multiple infirmities. Given that 5% of the US population accounts for more than half of healthcare expenditures, there is particular interest in interventions targeting high-​cost individuals. Healthcare “hotspotting” refers to a data-​driven process for the identification of [the] high-​cost individuals in a defined region of the healthcare system. It is used to guide targeted intervention and follow-​up to better address patient needs, improve care quality, and reduce cost.

In addition to healthcare management by nurses, healthcare workers, and social workers, the study evaluates the impact of social benefits, including Supplemental Security Income, the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Medicaid. Healthcare consumers have been randomly assigned to intervention and control groups, but outcome data have yet to be generated.14

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While the Oregon study demonstrated how RCTs could inform state officials, it also revealed their lack of knowledge about field experiments. One of the things I’ve been excited about in recent years is that there is a growing movement for evidence-​based policy. I do think there are enthusiastic researchers, but the extreme partisanship and dysfunction in government masks what is happening at the state level to use evidence to inform policymakers. But there are many people at the state level who lack the capacity or have staff with the necessary skill set to do this work. We can use administrative data for research, so in South Carolina [Nurse-​Family Partnership replication], we’re using administrative data to follow up on moms to determine, are they going to the ER, how are their kids doing in school?

Still, Bates admitted that not all problems or regions receive equal attention with respect to field experiments. “I’d like to do more studies of rural areas,” she said. “Our name is the Poverty Action Lab and I think there are a number of questions we could address in rural areas.” Fortunately, J-​PAL’s voracious appetite for collaborators has led to partnerships with a few universities, although this raises additional issues. There’s an interesting story on the academic side: there’s a special skill set to conduct an RCT in the field with partners. The risk and rewards of doing an RCT are entirely different from conducting a study with an existing data set. I don’t think this happens magically within an academic discipline. So, it’s not that academics don’t think RCTs are valuable, but the logistics are formidable. Now that we’ve identified academics who are comfortable in mounting RCTs, when we get a request, we can suggest someone they might work with.

Bates also conceded that practitioners are often apprehensive about experimenting on clients, expressing objections like, “I can’t believe you’re wanting to experiment on our clients.” Yet, experience shows that once program managers and staff understand the benefits of a lottery as a method for randomization in determining who receives services as opposed to administrative discretion, objections evaporate. An evaluation of a Chicago summer jobs program, for example, showed that once they’d accomplished randomization, everyone was on board because it was transparent, and it was fair. Everyone understands a lottery, and it’s preferable to the status quo where every kid wants a summer job but determining who gets one and who doesn’t can be viewed as capricious, as in “You qualify

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but we don’t have the number of slots.” So, the criteria are fuzzy and there’s discretion involved.

How decision makers put research to use can, on the one hand, be used to cut programs, but, on the other, yield program improvements, Bates claimed. I think that it’s true that evidence of a program’s ineffectiveness can be used to cut it, but evidence of a program’s effectiveness can go a long way to improving services. So, it’s essential to ask the right question: if you want to know if a program is improving people’s lives, let’s identify an outcome. So, at the state level, we’d want to identify how a program improves people’s lives, but also creates savings for the state.

Bates cited the replication of TaRL in Chicago to illustrate the point. Replicating the Pratham India “teaching at the right level” study in Chicago delivered massive improvements for children who were below grade level. So, I think we can make a lot of progress if we get out of the mindset that what I think will make a difference is determined by geography, as opposed to examining the specific problem than selecting an intervention that might be apropos.

BUILDING CAPACITY

Toward upgrading the skills of state and local program managers, J-​PAL has embarked on two strategies. In 2015, J-​PAL announced its State and Local Innovations Initiative, offering technical assistance as well as funding to embed research for local and state projects. Fields of activity include crime, housing, education, employment, and health. Through the initiative, selected US state and local governments will receive funding, on-​the-​ground technical support, and access to J-​PAL’s network of affiliated professors from leading universities across the United States to help them design and implement randomized evaluations and use the evidence generated to inform their policy decisions.15

Reflecting the collaboration between universities and foundations, the State and Local Innovations Initiative is funded by Arnold Ventures. Bates is eager spread the word on J-​PAL’s Innovations venture. “If you’re an elected official at the state, county, or metropolitan level, and you’re interested in an RCT, send us a letter of interest, we’ll provide technical

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assistance in terms of matching you with researchers who can also fund your project,” she said. “Over the past few years we’ve seen increasing complexity and nuance on the requests we’ve received from mayors, for example, requesting assistance in evaluating Housing First.” Another way to enhance research capacity is MIT’s MicroMasters program, a credential in Data, Economics, and Development Policy. Given J-​ PAL’s addition of North America to its developing nation portfolio, could MicroMasters be offered to enhance the research capacity in the United States? “There are a lot of people who have the passion to work at the local and state level, but lack the capacity to do this work,” Bates observed. We actually spend more time talking people out of doing RCTs. We start with a . . . question we want to answer; what’s the best way to answer that? And [we] often commit the rest of the week [to] figuring out a theory of change, then spending time on the mechanics of randomized evaluations. RCTs aren’t cheap, but they’re cheaper than people think they are. We can use administrative data to lower costs.16

WSIPP’s Stephanie Lee sees promise in adopting a MicroMasters for American domestic policy. “That would be incredible,” she said. “I can’t really speak to it without having thought what it might mean in practice. But it’s such an interesting and incredible idea.” CODA

J-​PAL’s pivot from developing countries to North America may seem paradoxical in light of conventional distinctions, such as the Third World (Asia and Africa) versus the First World (America and Western Europe); however, ample data show that many regions of the United States resemble developing nations. One of the most provocative studies compares counties by race (African American, Asian, white, and Native American) and longevity, clustering populations into “eight Americas”—​Asians representing America 1, with greatest longevity, and urban African Americans representing America 8, with other clusters in between.17 Epidemiologists have long recognized that African Americans die younger than whites, but regional variations are striking. Compared with whites, death stalks both male and female blacks at much younger ages, with their attenuated longevity associated with living in the South. But urban African Americans also compare unfavorably with Africans, who have lower rates of cancer, among both men and women.18

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Administrative data have also depicted disparities of opportunity, a research focus of Harvard’s Raj Chetty, whose research first came to public attention with an analysis revealing that 92% of children born in 1940 earned more than their parents, while only 50% born in 1980 earned more, evidence that the American Dream had deflated in only a generation.19 Subsequently, Chetty and colleagues evaluated a housing voucher program through which public housing residents could move to more affluent neighborhoods, Moving to Opportunity (MTO). Using anonymized administrative data and tax returns, the researchers found significant, but qualified benefits: Moving to a lower-​poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-​poverty area when they are less than 13 years old have an annual income that is $3,477 (31%) higher on average relative to a mean of $11,270 in the control group in their mid-​twenties.

On the other hand, children older than 13 whose families relocate to more prosperous neighborhoods do not benefit as much. The policy lesson is clear, researchers concluded: “Offering vouchers to move to lower-​poverty neighborhoods to families with young children who are living in high-​ poverty housing projects may reduce the intergenerational persistence of poverty and ultimately generate positive returns for taxpayers.”20 Chetty and associates have also used administrative data to chart generational upward mobility. Notably, social circumstance introduces sizable variations in family prosperity. For example, “44% of black men who grew up in the lowest-​income families in Watts, a neighborhood in central Los Angeles, are incarcerated on a single day. By contrast, 6.2% of black men who grow up in families with similar incomes in central Compton, 2.3 miles south of Watts, are incarcerated on a single day.”21 Another intruding factor is urban versus rural: “In the Midwest, children who grow up in rural areas tend to have higher rates of upward mobility than those who grow up in urban areas. In the South, the pattern is reversed: upward mobility is higher in cities.”22 Since most of the population is urban, cities have come into sharper focus, revealing significant variations with regard to the income of children from the lowest quartile of families in relation to job growth, as shown in Figure 9.2.

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Children's Mean Household Income by Parents in Lowest income Quartile

46 Newark

44

Pittsburgh Providence

42

Salt Lake City

San Francisco Boston Minneapolis San Jose New York

Manchester

Los Angeles San Diego

Bridgeport Buffalo

Seattle

Washington DC Sacramento Houston Portland

Miami Philadelphia Chicago

40

38

Milwaukee Cleveland New Orleans St. Louis Dayton Cincinnati Detroit

Kansas City Grand Rapids

lndianapolis

36

0

Fort Worth

20

San Antonio Phoenix

Fresno Dallas Port St. Lucie

Orlando

Nashville

Tampa Columbus

Baltimore

Denver

Raleigh Jacksonville Atlanta Charlotte

40

60

Job Growth Rate from 1990 to 2010 (%)

Figure 9.2.  Upward mobility versus job growth, 50 largest cities. https://​opportunityinsights.org/​wp-​content/​uploads/​2018/​10/​atlas_​paper.pdf

Far better for a poor child to be raised in Salt Lake City than Detroit, at least as reflected by median income. Thus, administrative data can amplify opportunity as well as disadvantage. When natural experiments appear, as in Oregon’s Medicaid lottery, administrative data can show who benefits and when, which is important information for policymakers. Equally important, administrative data can provide the tracking information necessary for follow-​up regarding income, tax payments, welfare receipt, criminal conduct, and educational attainment. It is for precisely these reasons that a preoccupation of the Commission on Evidence-​based Policymaking was federal data archives. Without diligent supervision, privacy can be jeopardized, resulting in complaints about the ineptitude of federal officials. On the other hand, careful stewardship of “big data” can amplify the evidence-​based policy movement.

NOTES 1. Ian Parker, “The Poverty Lab,” New Yorker, May 17, 2010. 2. Jeffrey Sachs, The End of Poverty (New York: Penguin, 2005). 3. William Easterly, White Man’s Burden (New York: Penguin, 2006); The Tyranny of Experts (New York: Basic Books, 2013).

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4. Paul Collier, The Bottom Billion (New York: Oxford University Press, 2007), pp. 118–​19. 5. Abhijit Banerjee and Esther Duflo, Poor Economics (New York: Public Affairs, 2011), pp. 268–​72. 6. https://​www.aeaweb.org/​articles?id=10.1257/​aer.p20171153 7. Abhijit Banerjee, “From Proof of Concept to Scalable Policies” (Cambridge, MA: National Bureau of Economic Research, 2017). 8. https://​www.povertyactionlab.org/​case-​study/​ improving-​learning-​individualized-​tutoring-​united-​states 9. https://​micromasters.mit.edu/​dedp/​ 10. Interview March 25, 2019. 11. https://​www.chcf.org/​wp-​content/​uploads/​2017/​12/​PDF-​ OregonHealthInsExperimentNBER.pdf 12. https://​www.nber.org/​oregon/​ 13. https://​hotspotting.camdenhealth.org/​ 14. https://​www.povertyactionlab.org/​evaluation/​ health-​care-​hotspotting-​united-​states 15. http://​news.mit.edu/​2015/​ j-​pal-​north-​america-​launches-​state-​and-​local-​innovation-​initiative-​1106 16. Interview March 25, 2019. 17. https://​journals.plos.org/​plosmedicine/​article?id=10.1371/​journal. pmed.0030260 18. https://​journals.plos.org/​plosmedicine/​article?id=10.1371/​journal. pmed.0030260 19. https://​www.nytimes.com/​2016/​12/​08/​opinion/​the-​american-​dream-​ quantified-​at-​last.html 20. http://​www.equality-​of-​opportunity.org/​images/​mto_​paper.pdf 21. https://​opportunityinsights.org/​wp-​content/​uploads/​2018/​10/​atlas_​paper. pdf, p. 3. 22. https://​opportunityinsights.org/​wp-​content/​uploads/​2018/​10/​atlas_​paper. pdf, p. 7.

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PART III

Equitable America Evidence-​ based programs are unlikely to reach scale unless they are embedded in an agenda benefiting working-​ class households and communities. While liberals belatedly acknowledged the 2016 presidential election as failing to address the concerns of blue-​collar voters, whom they alleged to be misogynist and xenophobic, the election could also be interpreted as a referendum on liberal social engineering, personified by Hillary Clinton, which empowered a professional class that had mismanaged the economy, overseen failing schools, and maintained ineffective social programs. Because of widely shared apprehension about the rise of a technocratic elite, evidence-​based policy is apt to fall to the same forces of anger and indignation that subverted Hillary Clinton’s presidential campaign, unless it resonates with working-​class voters. Reorienting field experiments in this manner is a special challenge, insofar as outcome research is, by definition, retrospective, analysis of interventions after they have been deployed, with effects sometimes not revealed for years. But, as Part II demonstrates, program innovators not only have conceived of better approaches, but also have designed them to be assessed experimentally. Thus, the challenge for advocates of evidence-​based policy is to conceive initiatives that have wider applications, that appeal to blue-​collar voters, and that are also subject to rigorous evaluation. The economic decline of the industrial states of the Midwest is central to the issue. Spiking economic inequality has become a liberal trope; yet, like all synoptic thought, the concept simplifies at the expense of exploring what otherwise might be promising details. Consider income data, which has shown steady, if uneven, progress since the beginning of the millennium. Nobel Laureate Paul Samuelson, noting that income data frequently omit taxes paid and benefits, editorialized that the lowest quintiles have fared better than others between 2000 and 2015:  the lowest quintile’s

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after-​tax and benefit income increased 32% and that of the second-​lowest quintile increased 17%, compared to the middle quintile’s, which increased 15%, the second-​highest quintile’s, which increased 16%, and the upper quintile’s, which increased 15%.1 If lower income brackets have fared better than their better-​off peers, why all the anxiety about upward mobility and the security of the middle class? Figure III.1 puts Samuelson’s observation into perspective. While the income of the bottom quintile increased between 2000 and 2015, it remained far below that of other quintiles, despite redistributive income and benefit policies. As critics of inequality complain, the upper quintile continues to enjoy excessive income even after paying nominally progressive taxes. While Samuelson’s observation appears to square with a welfare state that redistributes income by taxing the wealthy and providing social benefits for the less affluent, his argument fails to convince. Why? Assuming 2,000 hours of work per year, the lowest quintile experienced the equivalent of a wage increase of $0.27/​hour over 15 years, an increase that is negligible compared to rising costs in healthcare and education. Equally profound, the Congressional Budget Office (CBO) neglects stagnant wages in decades prior to 2000 and tax expenditures disproportionately benefiting upper-​ income households, to say nothing of disparities of wealth. With respect to labor, the social contract integral to the American welfare state assured working-​class households they would have economic security and upward Percent 80 Income Before Transfers and Income After Taxes Transfers and Taxes

60

40

Top 1 Percent

20

81st to 99th Percentiles

0

Lowest Quintile

Second Quintile

Middle Quintile

Fourth Quintile

Highest Quintile

Figure III.1.  Shares of income before and after taxes and benefits by income group, 2015. https://​www.cbo.gov/​publication/​54646

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mobility, providing they played by the rules:  working hard, saving when possible, and contributing to their communities. If the 2016 presidential election demonstrated anything, it was that, with its work ethic in tatters, the working class revolted. Compounding economic inequality, a significant shift in employment status from full-​time, year-​round employment to temporary, on-​call jobs resulted in a significant subset of workers who were only tentatively attached to the labor market:  “the precariat.”2 As typified by Uber and Lyft, employers took advantage of the Great Recession to redefine work, substituting contingent workers for full-​time employment; 94% of jobs created in the past decade have been contingent jobs. Accordingly, wages dropped, even for college graduates.3 Retooling the labor market has affected nonprofessional workers across the board: formerly well-​paid blue-​ collar males, women of color in the service sector, and young workers entering the workforce. Workers constituting the precariat have not only less income and fewer assets, but also fewer benefits. Economic precarity reverberates through America, contributing to an unprecedented drop in parenthood as young adults realize they cannot afford to support families, buy homes, and save for retirement—​the American Dream has become a vestige of industrial America.4 These discrepancies have registered poignantly among households of America’s industrial heartland. In accounting for the 72,000 drug-​ overdose fatalities in 2017—​ in 1  year exceeding the fatalities of the Vietnam conflict—​Marcia Angell cited the demise of the American Dream for working-​class households. Most working-​class Americans have not benefited from our booming economy, the fruits of which have gone almost entirely to the richest 10%. For the bottom half of the population, income has scarcely budged since the 1970s, while expenses for necessities like housing, healthcare, education, and child care have skyrocketed.5

Even prior to the 2016 presidential election, these same households had defected from the Democratic Party, a historical affiliation since the inception of the Labor Movement, electing Republican governors in Illinois, Michigan, Ohio, Indiana, and Wisconsin, the nation’s “rust belt.” In retrospect, Nina Tanden, leader of the liberal Center for American Progress, conceded, “I fundamentally believe the Democratic Party has not offered a real answer on how to create upward mobility for people who haven’t gone to college. We have to rethink the entire social contract for the twenty-​first century.”6

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A cardinal problem with economic inequality has been the disconnect between those writing the script—​academics and journalists working in the Acela corridor on the East Coast and professors teaching at universities on the left coast—​and those in “flyover country,” failing to explain the collapse of opportunity due to lost jobs and, subsequently, declining income and wealth. Ironically, Richard Rorty (1931–​2007) predicted the popularity of a Trump-​like leader intent on exploiting working-​class resentment: Discerning two competing intellectual tracks—​concern for international equality versus national opportunity—​Rorty anticipated that the “cultural left,” preoccupied by the former, would be surprised by authoritarianism as the working-​class opted for the latter. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for—​ someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots. . . . One thing that is very likely to happen is that the gains made in the past forty years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion. . . . All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.7

Astonished at the outcome of the 2016 election, Democrats redoubled their efforts to rectify their neglect of blue-​ collar households; however, liberal policy prescriptions were often at odds with working-​class sensibilities, reflecting the declining influence of unions in the Democratic Party.8 Hillary Clinton’s “deplorables” faux pas morphed into a liberal caricature of “low-​information” voters, a euphemism for “dumb.” In a series of postelection campaign events, Trump reminded working-​class voters that they had been abandoned by establishment elites. And those voters found the message to be true: “In some ways, they do think they are smarter than we are, and they do think they are better than we are, and they think they can make better decisions with our money than we can—​and that’s B.S.,” averred a retired female systems engineer who attended a Trump rally. “I’m a pretty smart cookie.”9 Comprehending the political consequences of economic disinvestment proved difficult for liberals who had walked away from the blue-​collar union movement that had propelled the polity of the upper Midwest toward the Democratic Party for a half-​century. In an important study of Trump voters, many of whom had earlier supported Obama, researchers uncovered a deep cultural chasm:

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The most traumatic economic and cultural change to America in the past thirty years:  technology, global wage competition, and a nationalizing, secularizing culture [have] upended the way of life of the American blue-​collar manufacturing worker more than they have for any other subgroup. In [workers’] eyes, they have lived by the rules and done everything they were supposed to: they worked hard, played hard, raised their kids to do the right thing, coached their kids’ softball games, served as ushers at their churches, were civically engaged, and asked only to watch their favorite team play football on Sundays and have a chance to give their offspring a slightly better economic situation in their hometown when they were done.10

The victims of coastal elites, established in metropolitan enclaves—​ New  York, Washington, DC, Los Angeles, and San Francisco—​working-​ class voters showed their contempt by electing a bloviating billionaire who had never run for elected office. But class fissures had been predicted by Charles Murray (long held in contempt by liberals), who analyzed zip codes on the coasts that had eclipsed their middle-​American compatriots, coining “overeducated elite snobs,” or OES syndrome, to indict an arriviste aristocracy. Card-​carrying members of the OES “may even be self-​deprecating about their cultural preferences,” Murray shrewdly observed. “They just quietly believe they and their peers are superior to the rest of the population, intellectually and in their nuanced moral sensibility.”11 The shift in jobs from manufacturing, located in the upper Midwest, to knowledge-​based financial services, located largely in coastal cities, has had a profound political impact. “Starting in the 1980s, the American economy bifurcated. On the one side, cities with little human capital and traditional economies started experiencing diminishing returns and stiff competition from abroad,” observed a labor economist. “On the other side, cities rich in human capital and economies based on knowledge-​based sectors started seeing increasing returns and took full advantage of globalized markets.” Much of the current debate on inequality in the United States focuses on the class divide between the America of the privileged—​those with a good education and solid professional jobs—​and the America of the underprivileged—​those with low levels of schooling who often live from paycheck to paycheck with no job security.12

Thus, while social stratification is a consequence of inequality, geography is of comparable import politically. “Rich metropolitan areas have gotten even richer, attracting ever more of the nation’s fastest growing industries,”

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editorialized Paul Krugman. “Meanwhile, small towns and rural areas have been bypassed, forming a sort of economic rump left behind by the knowledge economy.”13 Yet, Americans have been reluctant to uproot their families in search of opportunity. An analysis of geographic mobility revealed that only 13% of those leaving the least-​prosperous counties moved to the most-​prosperous counties.14 Whether the best economy in a half-​ century is able to reverse these vectors is doubtful. The April 2019 Department of Labor report, documenting an increase of 263,000 jobs and an unemployment rate of 3.2%,15 will not move thousands of jobs from New York City to rural West Virginia, any more than modest income gains will ensure a living wage for young adults without a college degree. The dark cloud of the massive federal debt precludes an adequate fiscal response in the event of a recession. Addressing these flaws in exceptionally robust economic performance requires changes in social policy. The dynamics of capital and labor, compounded by geography, pose fundamental problems for social policy predicated on an American welfare state that emerged during the 20th century when industrial capital generated surpluses that could be taxed and allocated for social programs. Social benefits focused on supporting a male breadwinner, who was essential for not only economic productivity but also family and community integrity. As that paradigm unraveled during the latter decades of the 20th century, the need for a 21st-​century social policy congruent with an increasingly diverse workforce as well as communities hollowed out by job loss became evident. In the following chapters, innovations that would benefit bereft communities are introduced—​innovations that, once brought to scale, could mute the political polemic that not only stalemates policy but also divides the nation.

NOTES 1. Paul Samuelson, “The Myth of Stagnant Incomes,” Washington Post, November 18, 2018. 2. Guy Standing, The Precariat (London: Bloomsbury, 2011). 3. David Coates, Flawed Capitalism (New Castle on Tyne, UK: Agenda, 2018), pp.  52–​60. 4. Nicholas Bakalar, “U.S. Fertility Rate Reaches a Record Low,” New York Times, July 3, 2017. 5. Marcia Angell, “Opioid Nation,” New York Review of Books, December 6, 2018. 6. Michael Hirsch, “Who Will Speak for the Democrats?” New York Review of Books, November 8, 2018, p. 17.

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7. Richard Rorty, Achieving Our Country (Cambridge, MA: Harvard University Press, 1998), p. 90. 8. https://​www.nytimes.com/​2018/​10/​18/​opinion/​democrat-​electorate-​left-​turn. html?action=click&module=Opinion&pgtype=Homepage 9. Jonathan Allen, “Trump Lectures Critics,” NBC News, October 24, 2018. 10. Salena Zito and Brad Todd, The Great Revolt (New York: Crown Forum, 2018), p. 45. 11. Charles Murray, Coming Apart (New York: Crown Forum, 2012), p. 84. 12. Enrico Moretti, The New Geography of Jobs (New York: Mariner Books, 2013), p. 106. 13. Paul Krugman, “The Knowledge Economy and the Trump Rump,” New York Times, November 19, 2018. 14. https://​www.brookings.edu/​blog/​up-​front/​2018/​11/​19/​americans-​arent-​ moving-​to-​economic-​opportunity/​?utm_​campaign=Brookings%20Brief&utm_​ source=hs_​email&utm_​medium=email&utm_​content=67676900 15. https://​www.nytimes.com/​2019/​05/​03/​upshot/​unemployment-​inflation-​ changing-​economic-​fundamentals.html?action=click&module=inline&pgtype=H omepage§ion=The%20Upshot

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CHAPTER 10

American Development Accounts

D

windling opportunity for working-​class families reached a crescendo in 2016 with the election of an ethno-​populist, Donald Trump, to the presidency. In retrospect, pundits would link the election result to a massive shift in the labor market, resulting in millions of lost manufacturing jobs, bereft communities, and rising mortality.1 Between 1979 and 2009, 8 million manufacturing jobs were lost to automation or overseas outsourcing, consigning many blue-​collar workers to lower-​paying service-​sector jobs.2 As households struggled with stagnant incomes, the mortality rate of white men increased compared to Hispanic and African American males. “Deaths of despair among those without a university degree are primarily the result of a 40-​year stagnation of median real wages and a long-​term decline in the number of well-​paying jobs for those without a bachelor’s degree,” stated Anne Case and Angus Deaton.3 Deindustrialization had political consequences as well. In 2016, many disillusioned workers reacted to scarce opportunity by defecting from the Democratic Party to the Republican Party. Well before their allegiance shifted and vaulted Donald J. Trump into the White House, voters of previously competitive states in the industrial heartland—​Ohio, Wisconsin, Illinois, Michigan, and Indiana—​had voted for GOP legislatures and governors. American policy responses to loss of opportunity have traditionally emphasized supporting income for low-​income families, to the neglect of wealth-​ building strategies.4 While income supports, such as Unemployment Insurance, the Supplemental Nutrition Assistance Program, and the Earned Income Tax Credit, are essential for covering daily expenses, upward mobility depends on saving and building personal

Building Better Social Programs. David Stoesz, Oxford University Press (2020). © David Stoesz. DOI: 10.1093/oso/9780190945572.001.0001

02

assets, such as completing postsecondary education, purchasing a home, or creating a business.5 History accounts for wealth disparities: slavery of African Americans, legacy admissions at private universities, and sexism in public policy endure as discrimination in housing, legacy admissions at private universities, and the “glass ceiling” that prevents women from entering executive suites. To a significant degree, the tax code has favored the affluent, especially with regard to tax expenditures. Of course, public welfare programs benefit the poor, although many of these are difficult to navigate, provide inadequate assistance, and prohibit more than minimal savings. Notably, inequality of wealth in America is worse than income inequality; moreover, variations in wealth inequality are striking. For example, from 1989 to 2016, the wealth of workers under 55 declined significantly, compared to that of those 65 and older.6 From 1989 to 2018, wealth controlled by the top 1% of Americans increased from 24% to 31%, while those in the bottom half of the population have negligible net worth.7 Increasing wealth disparities are depicted in Figure 10.1. Accordingly, social policy in the 21st century could stress social investment and wealth creation, not just income transfers to support consumption. For example, the Assets for Independence Act (AFI) of 1998 provided a tepid $125 million over 5 years to encourage low-​income households to establish Individual Development Accounts (IDAs) to save for postsecondary education, for purchasing a first-​time home, or for starting a business; Trillions of nominal dollars

Percent of aggregate 100

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80

80

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60

40

40

20

20

0 1990 1994 1998 2002 2006 2010 2014 2018 Top 1% Next 40%

0 1990 1994 1998 2002 2006 2010 2014 2018

Next 9% Bottom 50%

Figure 10.1.  Net worth by wealth percentile group. https://​www.federalreserve.gov/​econres/​feds/​files/​2019017pap.pdf

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Top 1% Next 40%

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however, the program was rescinded in 2018. Before AFI was defunded, field experiments demonstrated that incentives increase savings of low-​ income households significantly. Between 1997 and 2002, the American Dream Demonstration (ADD) assessed IDAs at 14 sites across the country, including a field experiment in Tulsa. All told, 2,378 participants saved $1.12 million, averaging $23/​month. Even the poorest families found ways to save; families surviving at half the federal poverty level scrimped in order to deposit 8% of household income. A decade later, “account holders were much more likely to be home owners and to have retirement accounts and liquid assets.”8 Subsequently, the Saving for Education, Entrepreneurship, and Downpayment (SEED) demonstration was deployed in 11 states to determine the merit of Child Savings Accounts (CSAs) for children from low-​income families. SEED OK (Oklahoma Kids) was structured as an experiment featuring randomized assignment:  of children born in 2007 and their families, 1,358 in the treatment group received a $1,000 deposit in a 529 educational savings plan, with a $100 incentive to open the account, and were compared to a control group of 1,346 children and their families. Deposits for low-​income children were matched 1:1, while deposits for moderate-​income children were matched 0.5:1. Despite the Great Recession, deposits in SEED OK increased 60% between 2007 and 2016. Eventually, 16% of families in the treatment group established 529 plans, and 8% contributed to them.9 In Albuquerque and Los Angeles, Building Savings for Success randomly assigned 807 low-​income participants to a treatment group receiving matching funds for savings or a control group. Albuquerque participants received a match of $4 for every $1 saved up to $1,000, Los Angeles participants got $2.50 for every $1 saved, and the intervention group received financial education and access to a savings account. One year after program inception, the treatment group not only saved an average of $799 more than the control group, but also reported significantly less material hardship as well as enhanced financial security.10 Despite the promising outcomes, the results of multiple experiments to encourage low-​income households to save are mixed. While poor families can save, the amounts set aside are modest at best. As Robert Friedman, founder of Prosperity Now admitted, The effort that goes into facilitating high rates of participation may not be worth it, and while poor families save, it will never be easy or even feasible for them to save a lot (more than $120–​$240 per year).11 Voluntary savings plans, despite incentives, yield minor reserves for low-​income families.

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Field experiments encouraging low-​income families to build assets notwithstanding, savings strategies overwhelmingly favor the affluent over the low-​and middle-​income households. Thus, assets have grown in relation to income, a reasonable expectation as household earning expands over time, but corrosive when income contracts. Indeed, when wages plummet for communities, as in the case of cities of the upper Midwest, which grew with manufacturing early in the 20th century but imploded toward its end, an entire region is adversely affected. And the fallout reverberates politically as well, with voters becoming receptive to the nativist populist message advanced by Donald Trump. Thus, rectifying the wealth gap not only is beneficial for households and communities, but also pays political dividends.

THE WEALTH GAP

The American promise of prosperity for all has foundered on the shoals of slow productivity growth and rising economic inequality. Accompanying declining wages, the savings rate of Americans has declined by more than half since 1950.12 While considerable attention has focused on income inequality, wealth disparities are far worse, especially for blue-​collar households. The Great Recession of 2008 erased the savings of many working-​class families; between 2005 and 2009, the median wealth of white families fell 16%, but it plummeted 53% for African Americans and 66% for Hispanics.13 Well into the recovery from the Great Recession, disparities in wealth have widened, as depicted in Figure 10.2. While promising minimal income benefits to most American households over the coming decade, the 2017 Tax Cuts and Jobs Act vastly increases the wealth controlled by affluent families.14 While the top 10%’s income and wealth have grown rapidly, the lower 40% of households have experienced marginal improvement. The average income of families in the top tenth increased 9% from 2013 to 2016, rising to $251,500, compared to the 3% increase for the bottom 20%, growing to $16,200. The wealth gap has been even greater: From 2013 to 2016, the top tenth’s wealth increased 24%, rising to $2.4 million per household, while the bottom quartile’s wealth rose from zero to only $200. Like income, wealth varies with race and ethnicity. Among lower-​income groups, whites have lost significant wealth following the Great Recession, their net worth plummeting from $42,700 in 2007 to $22,900 in 2016. For 2016, the net worth of Hispanics was $7,900, and for blacks $5,000, the approximate value of a used car.15 While African American families have typically earned half what white families earned, black wealth has been one

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