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
The Effects of Welfare and IDA Program Rules on the Asset Holdings of Low-Income Families
By Signe-Mary McKernan, Caroline Ratcliffe, Yunju Nam
Examines the effects of a comprehensive set of 13 welfare, Food Stamp, individual development account (IDA), earned income tax credit (EITC), and minimum wage program rules on the asset holdings of low-education single mothers and families. This report finds empirical evidence that more lenient asset limits in means-tested programs and more generous IDA program rules may have positive effects on asset holdings of low-education single mothers and families.
- More generous unrestricted asset limits are not associated with increased liquid asset holdings for either low-education single mothers or families.
- More generous restricted account asset limits are associated with increased liquid asset holdings for low-education single mothers and families.
- More generous Food Stamp vehicle asset limits are associated with increased vehicle asset holdings for low-education single mothers.
- Expanded categorical eligibility in the Food Stamp Program is associated with increased vehicle asset holdings for low-education single mothers and families.
- More generous IDA program rules are associated with increased liquid asset holdings and net worth.
- A more generous state EITC amount is negatively associated with liquid asset holdings but the percentage of the state EITC that is refundable is positively associated with liquid asset holdings.
- A more generous state minimum wage for federally covered categories (i.e., covered by the Fair Labor Standards Act) is associated with increased liquid asset holdings, vehicle asset holdings, and net worth.
Assessing Asset Data on Low-Income Households: Current Availability and Options for Improvement
By Caroline Ratcliffe, Henry Chen, Trina R. Williams-Shanks, Yunju Nam, Mark Schreiner, Min Zhan, Michael Sherraden
Identifies the most reliable and informative data sources for understanding low-income households’ assets and liabilities, details their limitations, and provides options for improving asset data sources and collection methods.
The four evaluation criteria—relevancy, representativeness, recurrence, and richness of correlates—serve as a framework for assessing how effectively various data sets can provide an understanding of low-income households’ assets and liabilities. Of the data sets reviewed, only one receives the highest ranking under all four criteria—the PSID. With these high rankings, the PSID has the potential to provide reliable information on low-income households’ assets and liabilities and is identified as a “primary” data set.
Because our primary research question asks that we identify the most informative and reliable data sources for understanding low-income households’ assets and liabilities, any data set designated a “primary data set” should comprehensively measure assets and liabilities (relevance criterion) and be representative of the overall U.S. low-income population (representativeness criterion).
The only other data sets that receive top ratings in these two criteria are the SIPP and SCF. They perform well enough in the other two criteria to also be deemed “primary” data sets.
Jobs and Business Ownership News
Low-Income Workers and Their Employers: Characteristics and Challenges
By Gregory Acs and Austin Nichols
Defines and documents the characteristics of low-wage workers and their employers. This paper finds that about one in four workers, ages 18 to 61, earned less than $7.73 an hour in 2003. Low-wage workers who reside in low-income families with children are substantially less educated than the average worker, are concentrated in industries with low wages, and have limited prospects for wage growth. Many policies aimed at low-wage workers are not well-targeted at workers in low-income families with children, in part because only one in four low-wage workers reside in such families. Nevertheless, policies targeted at low-wage workers may have broad benefits, including improving the lot of low-income families with children.
Place Matters: Employers, Low-Income Workers, and Regional Economic Development
By Nancy M. Pindus, Brett Theodos, G. Thomas Kingsley
Summarizes factors determining locational decisions of businesses and workers, as well as local economic growth, and suggests how employer needs as well as opportunities for low-income workers might be served by successful policies in the areas of housing, transportation, education and workforce development.
In looking at economic development, employer choices, and opportunities for low wage workers through the lens of place, it is clear that the landscape is shifting and policies must adapt accordingly. Spatial mismatch is more than employers and businesses leaving the urban core and poor urban residents lacking transportation to new job centers. Now, some urban centers are revitalizing, the creative class is growing in cities, and some suburbs (especially older suburbs and some outer-ring suburbs) are increasingly diverse and beginning to experience some of the same challenges as cities. And, there is a growing body of evidence that, in a knowledge-based economy, equity and tolerance are good for business. There is a growing consensus that geography of opportunity has changed, and continues to change.
Opportunities for new initiatives:
- Housing policies that promote “workforce housing” and the deconcentration of poverty by considering the mix of the workforce and matching housing opportunities to that mix.
- Transportation and other infrastructure funding that supports integration of systems and reduces sprawl by concentrating development near rail and bus hubs (“smart growth”).
- Aligning workforce and education with economic development by addressing spatial mismatches between training opportunities and where people live and work; improving coordination between employers, workforce development intermediaries, and community colleges; and facilitating cross-firm career mobility within regional labor markets.
Building Skills and Promoting Job Advancement: The Promise of Employer-Focused Strategies
By Karin Martinson
Discusses what we know about employer-focused training, describes three employer-focused training models, and concludes with some key questions to address to assist in moving forward with this type of skill development strategy. Three types of promising employer-focused job training:
- Incumbent worker training provided directly at the workplace through employers is a large-scale effort to involve employers in skill building.
- Sectoral training programs focus on providing training to a cluster of employers in one segment of the labor market.
- Career ladders: A subset of sectoral initiatives focuses on developing career pathways that lead to higher-paying jobs.
- Many sectoral and career ladder initiatives require the involvement of multiple systems, including workforce development, community colleges, the business community, unions, and community groups. It can be difficult to gain the cooperation of all parties needed to enact the type of major changes required by many initiatives.
- Many employer-focused training programs require substantial resources to plan and implement effective initiatives.
- While strides forward have been made, it is a continuing challenge to develop training options that effectively reach low-income workers.
Meeting Responsibilities at Work and Home: Public and Private Supports
By Pamela Winston
Summarizes what we know about families’ access to supports, employers’ experiences, and public and employer efforts to expand them.
Paid parental/family leave:
Time for parents and infants to bond is vital to children’s positive development, and long hours in out-of-home care in early infancy pose risks for children’s development, especially in the low-quality settings to which low-income families often have access. The United States is one of only 5 of 173 nations surveyed for a global index that does not have public policies to provide paid time off for parents to care for and bond with a new infant. Further, while some employers and states provide paid parental leave, low-wage workers are least likely to have access to it.
Paid sick leave/paid time off:
Paid time off that can be used for workers’ short-term illnesses or those of their children, routine medical care, involvement in children’s school meetings or activities, or for other family or personal needs can play an important role in fostering family well-being. Almost half (48 percent) of American private-sector workers are estimated to lack any paid sick leave, amounting to over 54 million employees.
Flexibility for employees to change start or end times, take time out during work hours for emergencies, request shift changes or exemption from mandatory overtime, or otherwise adjust work hours for family obligations can also help parents fulfill their responsibilities to their employers and their families. 57 percent of workers indicated in 2002 they did not have access to traditional flextime.
Access to affordable, consistent, and adequate-quality child care available during work hours can make an important difference to parents’ productivity and reliability on the job, and to children’s well-being. As a rule, the child care market does not provide a sufficient supply of affordable adequate-quality care, which can create particular challenges for low-income families. Public programs can provide financial and other support to many low-income families with low-wage workers, but typically many eligible people do not participate in them.
Maternity Leave in the United States: Paid Parental Leave is still not Standard, even among the Best U.S. Employers
By Vicky Lovell, Elizabeth O’Neill, Skylar Olsen
Institute for Women’s Policy Research
Analyzes parental leave policies of Working Mother100 Best Companies.
- Nearly one-quarter (24 percent) of the best employers for working mothers provide four or fewer weeks of paid maternity leave, and half (52 percent) provide six weeks or less.
- Nearly half of the best companies fail to provide any paid leave for paternity or adoption.
- While more than one-quarter of companies (28 percent) provide nine or more weeks of paid maternity leave, many of the winners’ paid parental leave policies fall far short of families’ needs.
- No company provides more than six weeks of paid paternity leave and only 7 of the 100 best companies provide seven weeks or more of paid adoptive leave.
Implementation and Sustainability: Emerging Lessons from the Early High Growth Job Training Initiative (HGJTI) Grants
By John Trutko, Carolyn T. O’Brien, Pamela A. Holcomb, and Demetra Smith Nightingale
Summarizes lessons from the early grantees of a major national effort to encourage the development of market-driven strategies addressing business and industry’s workforce challenges.
The discussions revealed insight into four general, interrelated, implementation issues:
1. Establishing and maintaining partnerships
- Bringing the right partnerships together is critical to success.
- Successful collaboration requires regular discussions and agreement regarding respective roles and responsibilities of each organization and the specifics of how staff will collaborate and share information.
- The existence of the HGJTI grants helped partnering organizations to better understand the resources and capabilities of other organizations.
- Employer partnerships are especially important to ensure that the workforce challenges are accurately defined and the strategies selected meet the current and immediate needs of the sector.
- Projects operating across large areas, such as in rural locations, face special issues regarding partnerships.
2. Project start-up, development, and design
- Effective and timely implementation of projects aimed at addressing critical workforce needs depends greatly on recruiting and retaining staff with the necessary occupation-specific skills.
- Effective training programs should have a strong front-end assessment and recruitment and outreach procedures in place.
3. Targeting and reaching trainees
- Grantees found that when serving disadvantaged populations and dislocated workers it is important to incorporate supportive services.
- Recruiting and retaining participants is a major activity for training programs, and a particular challenge when targeting on widely varying populations.
- At the time grantees were contacted, most had reached or were close to reaching their capacity-building and training goals.
4. Management and meeting federal grant requirements
- It is important to begin to focus on post-grant sustainability well before grant funds are exhausted.
- DOL/ETA staff provided various types of technical assistance and guidance to HGJTI grantees, but many needed more federal grants management support.
- Grantees found that they needed a longer grant performance period.
Child Care and Early Education News
Vouchers for Housing and Child Care: Common Challenges and Emerging Strategies
By Margery Austin Turner, Gina Adams, Monica Rohacek, Lauren Eyster
Highlights promising strategies for tackling challenges to housing and child care vouchers’ success. Vouchers play an important role in federal efforts to help low-income families obtain both housing and child care. These programs constitute essential components of the promise of welfare reform to encourage and support work among low-income families. And both types of vouchers have the potential to enhance long-term outcomes for children.
Although federal housing and child care voucher programs differ in important respects, they also face common challenges. First, the success of both programs in helping families access high-quality services depends upon the supply of these services in the private market and the willingness of providers to accept voucher families. If acceptable rental housing units or child care slots are not available where families need them, vouchers are not effective. In addition, low-income families may face challenges in negotiating the private market, gathering information about available child care or housing options, or identifying providers that meet their needs and offer good quality. Finally, both housing and child care voucher programs have to balance requirements to avoid any overpayment of subsidies (either by serving ineligible families or by miscalculating the appropriate subsidy amount) with a mandate to support work and enhance well-being among low-income families.
Pre-Kindergarten to 3rd Grade (PK-3) School-based Resources and Third Grade Outcome
By Brett V. Brown and Kimber Bogard
Examines multiple PK-3 school based resources that tap into children’s experiences of early elementary grade learn to PK-3 school-based resources by key social groups of children defined by poverty status, parental education, and race/ethnicity.
While the majority of children had access to most positive PK-3 school influences, marked inequalities in access were still found. Unequal access to these school resources were observed by parental education and income level, as well as race and Hispanic origin. The most educationally at risk children (i.e., parents have less than a high school education, family income below the poverty level, Black non-Hispanic children) were the least likely groups of children to access high resource elementary schools. This finding clearly indicates that the quality of elementary schools must be considered when examining questions concerning achievement gaps by income and race/ethnicity.
Our preliminary multi-variate analyses point to some core school variables that predict academic and behavior skills necessary for future success and well-being. Of particular interest are the differential relationships between two clearly defined sets of PK- 3 school-based resources reported in kindergarten, and their relationships to academic and behavior outcomes in third grade. Reading and math scores were consistently predicted by strong principal leadership, high academic standards, and teachers collaboratively developing curricular materials. Teacher turnover, which can be considered indicative of instability within a school, was related to lower rates of self-control and school engagement among third grade children. These findings suggest that there may be PK-3 school-based resources that independently predict academic and behavioral outcomes. Though these results are preliminary, we believe they are the strongest research evidence yet that such factors each have influence over levels of school readiness in young children.
Health and Safety News
Access to Employer-Sponsored Health Insurance among Low-Income Families: Who Has Access and Who Doesn’t?
By Lisa Clemans-Cope, Genevieve M. Kenney, Matthew Pantell, Cynthia Perry
September 11, 2007
Examines access to employer-sponsored health insurance among low-income families.
- In 2003 and 2004, about one in two children in low-income families did not have access to ESI, despite having one or more employed adults in the family.
- Among low-income working families, families with lower levels of income, families with lower parental education, families where parents work in smaller establishments, and families in which no parent has union representation are all less likely to have access to ESI.
- Public insurance fills a substantial part of the gap in health insurance coverage left by lack of ESI access for children in low-income working families, but parents without an offer of ESI remain uninsured at high rates. In fact, among families without an ESI offer, children are twice as likely—and parents nearly three times as likely—to be uninsured than families with an offer.
Employer-Sponsored Health Insurance and the Low-Income Workforce: Limitations of the System and Strategies for Increasing Coverage
By Linda J. Blumberg
Outlines the problems with employer-sponsored insurance from the perspective of employers, specifically those employing low-income workers, and discusses potential strategies for addressing them. Problems with employer-sponsored insurance from the perspective of employers:
- When employers competing for the same pool of workers tend to offer health insurance, then the pressure to offer such benefits increases for the other employers in that labor market. Likewise, in markets where ESI is not common, the pressure to offer it is significantly lessened.
- One of the more controversial and complex issues related to the employer decision to offer insurance is whether the incidence of employer premium contributions falls upon the employer or upon the worker. While the best empirical evidence available indicates that, at least in large part, employer payments are passed back to workers via reduced wages, most employers do not believe this is the case.
- Firms employing significant numbers of modest-wage workers will not be able to offer health insurance to their workers. This is because low-income workers will tend to prefer employment that provides additional wages as opposed to health insurance benefits to a significantly greater extent than will high-income workers.
- Another aspect of the price of health insurance to employers is labor turnover. The administrative costs associated with health plan enrollment and disenrollment are higher for employers with high-turnover workforces.
Policy options to address shortcomings of the system:
- Providing government subsidies for insurance coverage.
- Requiring all residents to obtain a minimum level of insurance: individual mandates.
- Requiring employers to participate in the financing of health insurance coverage for their workers: employer mandates.
- Approaches for controlling health care costs.
Other News and Research
The Feminization of Poverty
by Megan Thibos, Danielle Lavin-Loucks, and Marcus Martin
The J. McDonals Williams Institute
Examines the evidence for the feminization of poverty and analyzes the factors that contribute to the phenomenon; provides a portrait of feminized poverty at national and local levels; examines the role of public policy in alleviating women’s poverty and proposes policies that could significantly reduce the magnitude of the feminization of poverty.
Two schools of thought on the reasons for the feminization of poverty:
The feminization of poverty exists because of significant changes in the family structure such that households headed by females are not only a larger proportion of households but also are disproportionately impacted by factors contributing to poverty compared with other types of households.
Structural changes in the economy have caused the displacement of many women into occupational sectors that are gender-specific, low-wage, and low-benefit employment opportunities—such as pinkcollar jobs. Moreover, the shift into a knowledge-based economy has meant that those females with the least educational attainment and the least work skills will be least likely to experience work opportunities that can effectively and permanently move them and their families out of poverty.
Our focus is on three broad public policy areas that can have a positive impact on moving female-headed households out of poverty and into the self-sufficiency:
1) Expanding educational opportunities
2) Livable wages
3) Equitable wages and occupational segregation
Thanks and see you next month with more research from the Stepping Stones issue areas!