We’ve been fighting poverty all wrong

“Since 1975, politicians have built huge portions of the American safety net — like the child tax credit (CTC) — around the idea that excluding the poorest Americans from government assistance will motivate them to climb out of deep poverty on their own and get a job.
This long-standing bipartisan consensus is manifest in the twin ideas of work and income requirements. Work requirements are simple: You either have a job or you don’t, and that binary is what determines whether you’re eligible for a handful of welfare programs.

Income requirements are a little wonkier. They stipulate that anyone without any income will receive no benefits. Only after earned income surpasses a specified level do benefits begin kicking in — which is where we get another dry name: “phase-ins.””

“The consensus excluding the poorest Americans from some forms of government assistance through phase-ins held until President Joe Biden’s 2021 American Rescue Plan. Its anti-poverty centerpiece was to cut phase-ins from the existing CTC and crank up the payment, creating what’s known as the expanded CTC.
The results were historic. Over the course of 2021, child poverty was cut nearly in half, and the long-running fear at the heart of the American welfare system — that unconditional aid would discourage work — never came to pass.

Then, to the dismay of advocates and recipients alike, Sen. Joe Manchin (D-WV) blocked the Democratic Party’s effort to make the expansion permanent, fearing, among other familiar concerns like the cost, that recipients would just buy drugs (the data shows that recipients spent the money on food, clothes, utilities, rent, and education). Come 2022, phase-ins returned to the CTC, approximately 3.7 million children were immediately thrust back into poverty in January, and the rest of the year saw the sharpest rise in the history of recorded child poverty rates.”

“Now that we have real-world evidence from a nationwide, year-long experiment, the expanded CTC’s success should ignite efforts to roll back phase-ins across the board. That also means cutting them from the CTC’s sister program, the earned income tax credit (EITC), which phases in as a supplement to wages for low-income Americans and helps about 31 million Americans.
The expanded CTC is estimated to have reduced child poverty rates anywhere from 29 percent to 43 percent, with the vast majority of that drop attributable to removing phase-ins. Extending that success to include the EITC would cut child poverty by an estimated 64 percent.”

“Winship was unsurprised that his fears of parents choosing to work less didn’t show up during the expanded CTC. It only lasted for one year and was recognized all the while as a temporary program. “These kinds of behavioral effects take time to set in,” he writes. In the long-term, after a decade or a generation of the program being in place, that’s when he would expect to see, as Oren Cass, executive director of the conservative think-tank American Compass, put it, “communities in which labor-force dropout is widespread and widely accepted.””

“Long-term speculation, however, can go both ways. The generational impacts of unconditional transfers could just as well lead to long-term investments in education and skills training, support entrepreneurship, and actually raise productivity and economic activity in the long run, all of which would boost, instead of wipe out, poverty reduction.

In 2018, researchers from Washington University in St. Louis estimated that childhood poverty costs the US $1.03 trillion per year, or 5.4 percent of the GDP. They found that every dollar spent on reducing child poverty would save the public 7 dollars from the economic costs of poverty.

Results from basic income pilots across the US also stand in contrast to Winship’s concern. “Our moms get the guaranteed income and not only do they continue to work, they level up their work,” Nyandoro, who runs the nation’s longest-running guaranteed income program, told me. “They’re able to move from jobs to careers. They’re able to go back to school. They’re able to get out of debt.”

The most recent evidence in favor of phase-ins Winship cites is a 2021 paper by a group of economists from the University of Chicago, led by Kevin Corinth and Bruce Meyer. It predicted that making the CTC expansion permanent would spark a 1.5-million-person exodus from the labor force. As analysts were quick to point out, however, the paper is based on a model that already assumes unconditional cash reduces work. Predicting work disincentives using a model that already assumes them tells us nothing about whether the assumption itself is tethered to reality.

Corinth and Meyer have since responded to criticism of their work disincentive assumptions, arguing that they fall well within the range used in other studies. These academic debates will continue, but in the meantime, where should the burden of proof lie?

Eliminating phase-ins from the CTC was a massive anti-poverty success and had no short-term negative employment effects. Recipients spent the extra few hundred bucks on necessities, from food and clothing to shelter and utilities. Even small businesses voiced their support on the grounds that it would boost spending and entrepreneurship.

On the other hand, a minority of skeptics retain speculative concerns that a few generations down the line, newfound consequences might overshadow these benefits.”


The science is clear. So why can’t governments agree on vaping?

““It’s really a product that’s good for some people and bad for other people, which doesn’t feel like too complex of a statement, but actually feels like something that is difficult for many to grapple with,” said Hartmann-Boyce, who is an associate professor of evidence-based policy and practice at the University of Oxford.
She led a 2022 Cochrane review — considered the best type of analysis of the available evidence — which looked at studies of e-cigarettes for smoking cessation. It found the strongest evidence yet that vaping works better than traditional nicotine replacement tools such as patches or gum to help people stop smoking. For those advocating that vaping is an effective harm-reduction mechanism, it was a significant win.

But it’s also more complicated than that.

Hartmann-Boyce said that since Cochrane first started looking at the evidence nearly 10 years ago, things have changed dramatically. The devices themselves are different now and are much better at delivering nicotine. That’s good for people trying to give up smoking but creates a problem with non-smokers like kids who are trying these for the first time.

But not everyone is even convinced it’s good for most smokers in the long term.

Jørgen Vestbo, a clinician and emeritus professor of respiratory medicine at the University Hospital of South Manchester, who recently returned to his native Denmark, agrees that the randomized controlled trials show e-cigarettes can help people quit.

But he also points to data from clinical trials that show people given e-cigarettes were more likely to use them for longer than those using aids such as nicotine gum. Vestbo said population-level evidence shows that as long as you are addicted to nicotine you are more likely to start smoking again.”

Will diet soda, yogurt, and cereal disappear from stores?

“the World Health Organization’s International Agency for Research on Cancer (IARC) declared aspartame as “possibly carcinogenic.” Another WHO committee, the Joint FAO/WHO Expert Committee on Food Additives (JECFA), independently assessed the ingredient, too, but maintained its existing recommendation — suggesting not that people cut the substance entirely out of their diets but that they limit their daily aspartame consumption to about 40 mg per kilogram (or about 2.2 pounds) of body weight. Diet soda contains about 200 mg of aspartame per 12-ounce can. By that measure, an adult weighing 60 kg, or roughly 132 pounds, would need to drink about 12 cans of diet soda a day to exceed the JECFA’s recommendation, assuming they had nothing else containing aspartame.
Making matters more confounding, the Food and Drug Administration had yet another take. It told Vox in an email that it had reviewed the information used in WHO’s assessment and “identified significant shortcomings” in the studies the agency relied on. “Aspartame is one of the most studied food additives in the human food supply,” the agency added.”

Study: Banning Investors From Buying Homes Leads to Higher Rents, More Gentrification

“They found that banning investors from buying and converting housing to rentals worked in one sense: The share of investor-owned rental properties in affected neighborhoods fell, and the number of properties bought by first-time homebuyers increased.
On the other hand, however, these new homeowners tended to be richer than the renters they were replacing, and the costs of rental housing increased overall.

“The ban has successfully increased middle-income households’ access to homeownership, at the expense of buy-to-let investors. However, the policy also drove up rents in affected neighborhoods, thereby damaging housing affordability for individuals reliant on private rental housing, undermining some of the intentions of the law,” write researchers in the study published on SSRN.”

Study Blames Regulation for Lower Rates of Innovation

“The authors find that “there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold,” which they label an “innovation valley” because the regulatory consequences of increased employee size mean that firms choose not to innovate. This fact holds for firms’ responses to demand shocks, as firms “with size just below the regulatory threshold” choose not to increase production to meet this demand because of the regulatory implications.
In total, the authors conclude that labor regulations equate to a 2.5 percent tax on profit, which reduces innovation by about 5.4 percent and “reduces welfare by at least 2.2% in consumption equivalent terms.” This tax on profit continues to affect firms to the right of the threshold, resulting in “a greater flattening of the positive relationship between innovation and firm size.”

The authors examine the effects of labor regulations on firms with between 10 and 100 employees, noting that “many labor regulations apply to firms with 50 or more employees,” and measure the firms’ innovative capacity by the number of patents.

These regulations force firms to devote resources away from production, including spending revenue on worker training, offering union representation, and creating profit-sharing schemes and a works council with employee representation.

“We are not saying all regulations are bad, but rather it is important to go beyond the usual approach to thinking about costs and benefits which are short-term and generally ignore long-run innovation,” Van Reenen tells Reason.”

“”Firms respond to incentives and disincentives and we find that even when firms experience positive developments, such as a surge in demand, they may still hesitate to invest in research and development and pursue innovation if they are near this size threshold,” Bergeaud explains to Reason. “Indeed successful innovation implies growth, which, in this case, would mean crossing the 50-employee threshold and incurring additional costs.”

Another interesting finding of the study is that firms innovating under substantive regulation tend to “swing for the fence” since “regulation deters incremental R&D” and firms want “to avoid being only slightly to the right of the threshold.” While significant innovations garner media coverage and drastically affect consumer well-being, minor innovations also provide benefits, allowing firms to deal with immediate concerns for less investment.”

Is weed safe in pregnancy?

“In a 2020 review of relevant studies published since the mid-1980s, the authors called out many of these studies for weak methodology. In particular, many researchers had failed to compare the outcomes they were measuring against any kind of a standard that would account for age and parental educational level. (That is: What if the kids of those who used cannabis during pregnancy were born to parents with lower levels of education, which could account for some differences?)
The review authors concluded that overall, “prenatal cannabis exposure is associated with few effects on the cognitive functioning of offspring.” What’s more, they noted, even when abnormalities were identified, almost all were still within the range of normal.”

“Despite the imperfect data, Mark suspects the risk of fetal harm with prenatal cannabis use is high enough to support recommending against purely recreational use.

But many aren’t seeking to get high.”

An economist spent decades arguing money wouldn’t help schools. His new paper finds it usually does.

“The paper, set to be published later this year, is a new review of dozens of studies. It finds that when schools get more money, students tend to score better on tests and stay in school longer, at least according to the majority of rigorous studies on the topic.”

“The findings seem like a remarkable turnabout compared to prior research from Hanushek, who had for four decades concluded in academic work that most studies show no clear relationship between spending and school performance. His work has been cited by the US Supreme Court and pushed a generation of federal policymakers and advocates looking to fix America’s schools to focus not on money but ideas like teacher evaluation and school choice.
Despite his new findings, Hanushek’s own views have not changed. “Just putting more money into schools is unlikely to give us very good results,” he said in a recent interview. The focus, he insists, should be on spending money effectively, not necessarily spending more of it. Money might help, but it’s no guarantee.

Hanushek’s view matters because he remains influential, playing a dual role as a leading scholar and advocate — he continues to testify in court cases about school funding and to shape how many lawmakers think about improving schools.”

“The context matters, they say. Sometimes money is spent well; sometimes it’s spent poorly. Sometimes the effects are big; other times they are small or nonexistent. Just focusing on the overall effect masks this variation.”

“Other researchers agreed that the variation in results is important, but that shouldn’t mean ignoring the overall impact. “The average effect still matters,” said West, the Harvard professor.”

Studies Link Marijuana Legalization to All Sorts of Positive Public Health Outcomes

“Legalization linked to fewer suicides, traffic fatalities, and opioid deaths. A new paper on the public health effects of legalizing marijuana finds “little credible evidence to suggest that [medical marijuana] legalization promotes marijuana use among teenagers” and “convincing evidence that young adults consume less alcohol when medical marijuana is legalized.””

UN climate report shows world is flying blind into the storm

“Extreme weather events of the past few years — including the 2022 heat wave that sent temperature records tumbling across much of Europe, and the floods that devastated Pakistan last year — have surprised some of the world’s top climate scientists with just how far they sat outside the normal range.
Experts still know relatively little about when and where these types of extreme climate events will happen. Or what happens when two events, like a drought and a heat wave, hit one place simultaneously. That’s because scientists have tended to look at broader averages across regions, rather than the most intense extremes in specific locations.

“We haven’t asked the models [to] come up with an outrageously high temperature number, like 50 degrees in Canada” — a mark reached during a heat wave in 2021 — “and work out how likely that is or if that’s possible,” said Friederike Otto, an author of the IPCC report and senior lecturer at Imperial College London. “And I think that’s why these are surprises.””

Leading climate scientists send the grimmest of warnings

“he U.N. Intergovernmental Panel on Climate Change, an international body made up of the world’s leading climate scientists. Its latest report on the science and consequences of global warming was seven years in the making, writes POLITICO’s E&E News reporter Chelsea Harvey.
“The report clearly notes that the effects of climate change grow worse and worse with every little incremental bit of additional warming,” Chelsea told Power Switch. “So it’s imperative to reduce emissions as swiftly as possible in order to limit even worse outcomes in the future as much as we can.”

The assessment sends a warning that the effects of climate change are already happening. And humanity is not on track to curb carbon pollution from fossil fuel production, agriculture and other sources enough to halt warming at 1.5 degrees Celsius, the most ambitious international target.

In fact, at the rate the world is burning carbon, the 1.5 C threshold will likely arrive in the next decade.

The world has already warmed 1 degree since the preindustrial era. Wildfires, floods, droughts and hurricanes are growing more severe. Sea levels are swelling as coastal communities and island nations face existential threats from encroaching waters.

Intensifying droughts and agricultural disruptions are creating food and water insecurity. Infectious diseases are surging. And people around the world are increasingly being displaced by climate-fueled disasters.

Human mortality rates from climate disasters were 15 times higher in highly vulnerable regions of the world, compared with more developed places, the report found.”