As part of our ongoing commitment–in partnership with The Urban Institute–to providing information and resources related to the goals of Stepping Stones, please find below summary of recent research on issues of economic security and financial independence for women and their families.
This research is summarized and compiled for The Women’s Foundation by Kerstin Gentsch of The Urban Institute, NeighborhoodInfo DC.
Financial Education and Wealth Creation News
Subprime and High Interest Rate Mortgage Lending in the Washington, D.C., Region
By Peter A. Tatian
Urban Institute
March 27, 2007
Looks at the latest data on subprime mortgage lending and high interest rate loans from the Home Mortgage Disclosure Act (HMDA) for the 25 jurisdictions that make up the Washington, D.C., metropolitan area.
Subprime loans are those that have higher costs (such as higher interest rates) than prime loans. Subprime loans are designed for applicants with poor credit histories, high loan-to-home-value ratios, or other credit risk characteristics that would disqualify them from lower cost, prime-rate loans.
There is increasing concern around the country with the amount of subprime and high cost mortgages issued in recent years. Subprime lending has made credit available to households with low incomes or credit scores that would not allow them to qualify for prime-rate loans. Nevertheless, as is now becoming all too clear, subprime lending can be detrimental if borrowers who take out higher-cost loans later have difficulty repaying them and risk defaulting on those loans.
Click here for the abstract and introduction, or here for the full report.
Jobs and Business Ownership News
Behind the Pay Gap
American Association of University Women
April 23, 2007
Shows that women earn less even when working in the same career field, likely due to sex discrimination.
- One year after college graduation, women earn only 80 percent of what their male counterparts earn. Ten years after graduation, women fall further behind, earning only 69 percent of what men earn. Even after controlling for hours, occupation, parenthood, and other factors known to affect earnings, the research indicates that one-quarter of the pay gap remains unexplained and is likely due to sex discrimination. Over time, the unexplained portion of the pay gap grows.
- The research also shows that ten years after graduation, college-educated men working full time have more authority in the workplace than do their female counterparts. Men are more likely to be involved in hiring and firing, supervising others, and setting pay.
- This pay gap exists despite the fact that women outperform men in school – earning slightly higher GPAs than men in every college major, including science and mathematics.
Minorities in Business: A Demographic Review of Minority Business Ownership
By Ying Lowrey
Office of Economic Research, Office of Advocacy U.S. Small Business Administration
April 2007
Provides information on minorities in the work force and minority-owned businesses, including statistics about the minority population, their labor force participation, age, education, occupation, work schedules, average personal and household income, business ownership, and business dynamics.
- In 2002, minorities owned approximately 18 percent of the 23 million U.S. firms.
- Black-owned firms had the highest growth rate for several measures between 1997 and 2002: 45.4 percent for the number of firms; 24.5 percent of total receipts for the group; and 16.7 percent for employer firm receipts. Asians also experienced growth in the number of employer firms, at 12.6 percent, and in annual payroll, 25.3 percent. The number of American Indian and Native Alaskan businesses grew 2.1 percent.
- Hispanics or Latinos constituted the largest minority business community and owned 6.6 percent of all U.S. firms, 3.7 percent of employer firms, and 7.4 percent of nonemployer firms.
- Percentages of minority women owning businesses rose from 1997 to 2002: 29 percent of Black employer firms and 47 percent of Black nonemployer firms were women-owned in 2002. In contrast, women owned 17 percent of White employer firms and 31 percent of White nonemployer firms.
- Owners use a variety of sources of capital to start or acquire businesses. Nonemployer firm owners generally use a less varied array of financing sources than owners of firms with employees. Higher percentages of male/female equally owned, male-owned, and White-owned employer firms than of other firm groups financed their startups or acquisitions through business loans from banks. Higher percentages of Black- and Native American-owned employer businesses, as well as equally men- and women-owned employer firms used business loans from the government or government-guaranteed bank loans. More than all other groups, Islander employers used personal and business credit cards to finance their startups and acquisitions.
For full report, click here.
Social Security Spouse and Survivor Benefits for the Modern Family
By Melissa Favreault and C. Eugene Steuerle
Urban Institute
March 27, 2007
Examines the effect of earnings sharing—through which husbands’ and wives’ earnings records are combined and averaged throughout their marriage when computing benefits—as well as other changes to spouse/survivor benefits.
Social Security spouse and survivor benefits advantage single-earner families relative to dual-earner families paying the same total taxes. Our paper considers earnings sharing—through which husbands’ and wives’ earnings records are combined and averaged throughout their marriage when computing benefits—as well as other changes to spouse/survivor benefits, including caregiver credits and minimum benefits. All the roughly cost-equivalent packages examined improve adequacy and horizontal equity compared to current law. The earnings-sharing proposal, however, only reduced poverty with significant adjustments to the treatment of surviving spouses. The packages reveal tradeoffs among beneficiary groups, with particular tensions around work and marital status.
The abstract and executive summary are available on-line, as is the complete paper.
Child Care and Early Education News
KidBits: Using data to drive better outcomes for children and youth
DC Action for Children
March 28, 2007
A report meant to fuel efforts to improve conditions of children, youth and their families across the District of Columbia.
- Offers a snapshot of data in six key areas: school readiness, school success, healthy children and youth, youth opportunity, children and youth in stable families and youth transitioning to adulthood.
- Shows that poverty is growing, and becoming more concentrated in the areas of the city where there are the most kids.
- Offers several key recommendations to local policy makers:
o End child poverty in the District of Columbia.
o Create a citywide public awareness campaign to help parents understand the importance of routine, preventive care and kept appointments.
o Aggressively address the growing truancy issue by expanding the current court initiative to more schools and institute real time and immediate notification of parents and other caregivers.
o Add HPV and herpes to the list of reportable sexually transmittable diseases (STD) and provide treatment at the city’s STD clinics.
o Direct additional resources to young people not in school and not connected to other services and supports with a specific emphasis on Wards 7 and 8.
o Create and implement comprehensive plan to end child abuse and neglect.
o Direct resources for prevention efforts.
o Recommit to implementing the city’s Effective Youth Development Strategy.
For full report, click here.
Health and Safety News
How Well Do Health Coverage Tax Credits Help Displaced Workers Obtain Health Care?
By Stan Dorn
Urban Institute
March 26, 2007
This testimony addresses three topics: health coverage challenges facing displaced workers; the strengths and weaknesses of the HCTC program in helping these workers retain health coverage; and policy options to improve the HCTC program so it can be more effective in meeting the health coverage needs of workers who lose their jobs because of international trade.
Health Coverage Tax Credits (HCTCs) have been generally ineffective in providing health care to displaced workers for several reasons:
- The credits are used by only 11 percent of eligible workers.
- The coverage for which credits may be used often leaves out the health care that workers need. When job loss is followed by a gap in coverage of 63 days or longer, plans can deny treatment of the worker’s known health problems. Moreover, many states offer only plans with high deductibles that make care unaffordable for workers with limited incomes. Also, such plans often exclude or severely limit such basic services as prescription drugs, maternity care, and treatment of mental illness.
- In some states, HCTC plans increase their premiums substantially for enrollees who are older, female, or have health problems.
- When a displaced worker turns 65 and qualifies for Medicare, the worker’s spouse loses HCTC, even if that spouse is too young for Medicare and has no other coverage.
HCTC’s shortcomings can be addressed successfully through program changes like the following: - Increase the size of HCTCs to pay at least 75 percent of premiums.
- When beneficiaries have low household income, provide supplemental credits that lower worker costs to no more than 10 percent of premiums.
- Eliminate the requirement that workers must enroll in qualified coverage and pay full monthly premiums before the Internal Revenue Service (IRS) will rule on their eligibility for HCTC.
The summary of testimony and the complete testimony are available online.
Other News and Research
Kids’ Share 2007
By Adam Carasson, C. Eugene Steuerle, Gillian Reynolds
Urban Institute
March 15, 2007
Reports on trends in federal spending on children from 1960 to 2017, looking across over 100 major federal programs, including tax credits and exemptions.
This study reports on trends in federal spending on children from 1960 to 2017, looking across over 100 major federal programs, including tax credits and exemptions. Children’s spending increasingly shifted from broad-based programs to programs targeting low-income or special needs children over the 1960 to 2006 period. Thirteen major programs enacted between 1960 and 2006, which include Medicaid, the earned income tax credit, and Food Stamps, comprised 65 percent of federal spending on children in 2006. Overall, federal children’s spending increased in real terms from $53 billion in 1960 to $333 billion in 2006, or from 1.9 to 2.6 percent of GDP. Yet as a share of federal domestic spending, children’s spending declined from 20.1 to 15.4 percent. Meanwhile, spending on the automatically growing, non-child portions of Social Security, Medicare, and Medicaid, nearly quadrupled from 2.0 to 7.6 percent of GDP ($58 billion to $993 billion) over the same time period. Over the next ten years, children’s programs are scheduled to decline both as a share of GDP and domestic spending, because they do not compete on a level playing field with these rapidly growing entitlement programs.
Click here for the executive summary or here for the complete report.
