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Sunday, January 19, 2014

'What Happens When the Poor Receive a Stipend?'

The benefits of income supplements for the poor:

What Happens When the Poor Receive a Stipend?, by Moises Velasquez-Manoff, Commentary, NY Times: ...in 1996, the Eastern Band of Cherokee Indians in North Carolina’s Great Smoky Mountains opened a casino, Jane Costello, an epidemiologist at Duke University Medical School, saw an opportunity. The tribe elected to distribute a proportion of the profits equally among its 8,000 members. Professor Costello wondered whether the extra money would change psychiatric outcomes among poor Cherokee families. ...
The poorest children tended to have the greatest risk of psychiatric disorders, including emotional and behavioral problems. But just four years after the supplements began, Professor Costello observed marked improvements among those who moved out of poverty. The frequency of behavioral problems declined by 40 percent, nearly reaching the risk of children who had never been poor. Already well-off Cherokee children, on the other hand, showed no improvement. ...
 Minor crimes committed by Cherokee youth declined. On-time high school graduation rates improved. ... The earlier the supplements arrived in a child’s life, the better that child’s mental health in early adulthood. ...
Randall Akee, an economist at the University of California, Los Angeles, and a collaborator of Professor Costello’s, argues that the supplements actually save money in the long run. ... But contrary to the prevailing emphasis on interventions in infancy, Professor Akee’s analysis suggests that even help that comes later — at age 12, in this case — can pay for itself by early adulthood.  ...
[I]f giving poor families with children a little extra cash not only helps them, but also saves society money in the long run, then, says Professor Costello, withholding the help is something other than rational. ...

[There's quite a bit more in the article.]

    Posted by on Sunday, January 19, 2014 at 09:19 AM in Economics, Social Insurance | Permalink  Comments (27)

          


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