My Wonkblog column doesn’t provide useful specific detail, but Keister’s table 2.10 provides food for thought. She examines wealth among respondents in the National Longitudinal Survey of Youth (NLSY79). She examines mobility across socioeconomic quintiles among respondents who were living with their parents in 1979, and were (almost all) living on their own in the year 2000:
Adult quintile year in the year 2000
Childhood quintiles in 1979
As I read the table, there isn’t a whole lot of intergenerational mobility here. A child living in a household at the top quintile has a 55.1% chance of remaining in the top quintile, and only an 11% chance of ending up in the bottom 40%. The comparable numbers for someone in the middle quintile are 13% and 31%, respectively. And of course movement out of the bottom quintile is pretty much the mirror-image of movement out of the top.
This post has two points. One is substantive. The other concerns tradeoffs between academic publications and blogging. (Apologies if title is lost on non-NBA-playoff fans.)
First the substance: Drug testing of welfare recipients is a really bad idea
As a policy professional, you like to assume that some policy ideas are dead. Researchers demonstrate that it doesn’t work. Experience demonstrates that it works out poorly when it is put into practice. You think that it’s dead and buried. So you visit the gravesite, nostalgically, carrying the hockey mask it used to wear. Then a bolt of lightning strikes. It pops out of the grave, snatches away the hockey mask, and gets itself enacted into law by various state legislators across the country before you can kill it again.
As I wrote in Wonkblog this week, that’s what’s happening right now. A number of states contemplate suspicionless, population-based screening of welfare recipients for illicit drug use. Measures to do this have passed in eight states and debated in many others, despite an abundance of evidence that such policies will not accomplish their stated purposes. Read the rest of this entry »
Yesterday morning at 6:30, I found myself driving around the labyrinth of Chicago’s McCormick Place trying to find a shortcut from Lake Shore Drive to the parking structure. The tour didn’t go well, but I did get a fascinating look at where the busses let people off and the forklifts operate far from where the general public is supposed to be.
Fortunately I encountered no homeland security agents, and (more frighteningly) no Chicago traffic personnel bearing thick ticket pads. I parked without incident—unless you count the $21 parking fee.
I was there for the annual meeting of the American Society of Clinical Oncology. It’s an amazing affair with something like 25,000 attendees. I spoke on a panel at the invitation of my colleague William Dale. My assignment was to discuss the implications of the Affordable Care Act for geriatric oncology. Twenty minutes before our session was scheduled to begin, you can see that the excitement in the hall was palpable.
My friend Hank Aaron (yes the economist, not the baseball guy) sent along a nice review essay on this subject, simply titled: “What Should the Supreme Court Do About Affirmative Action?”
Hank’s email happened to arrive at the end of our admissions season. I’ve read more than 100 admissions folders this year in my capacity chairing our school’s MA-level admissions committee. This is a weighty responsibility. Ethical, legal, and operational tensions surrounding university admissions are intimately familiar to me.
I continue to be struck that most of the best arguments, on almost every side, were presented with greatest eloquence, sincerity, and rigor forty years ago in briefs and public commentary occasioned by the Bakke case, arguably the most famous Supreme Court decision of the 1970s. In 1977, McGeorge Bundy of all people provided one of the very best arguments in that case. As Bundy noted, immediate pressures for race-conscious admissions came from many sources, but its
deeper and more durable cause was the growing conviction that there was a fundamental contradiction between an asserted opposition to racism and the maintenance, by whatever process of selection, of essentially all-white colleges and professional schools.
Bundy’s essay is especially striking when one considers that Bakke was closer in time to the passage of the Civil Rights Act of 1964 than we now are to the date of George W. Bush’s reelection.
We still know surprisingly little about what really matters, statistically, in predicting which of our applicants would most benefit from our academic programs to do great things in the world. One partial exception arises in medicine. There is some evidence that medical school applicants with higher MCAT scores are more technically proficient and display better clinical reasoning than otherwise similar peers, and this matters.
Even in clinical medicine, the evidence is far from definitive. Performance on the biological and physical science MCAT portions significantly predicts grades and board scores in these areas. The links between other aspects of the MCAT and medical school performance, not to mention links to actual clinical proficiency, are much more murky.
The reality, for so many different reasons, is that we cannot provide excellent medical care to African-American or Latino patients and communities if the medical and skilled nursing workforces do not represent men and women of color in their ranks. This holds to an even greater degree in social services and public health.
It’s not merely that patients and clients want to “see people who look like them,” though this sentence crudely captures one human reality in the helping professions. More than that, one needs to know something about–have some tactile familiarity with–the life circumstances of the people one is trying to help. An endocrinologist whose teachers, classmates, and peers are all products of upper-middle-class meritocratic suburbia will be poorly-equipped to care for many of his patients.
This isn’t merely a matter of race or ethnicity. For years, medical and public health authorities struggled to address an HIV epidemic exploding within populations and communities that were worlds away from the personal experience and biography of most medical and public health practitioners. Crucial time was lost, and the HIV prevention was less effective than it should have been.
Much of the available evidence on admissions concerns who will do well in our coursework, which of course is a very different question from who will make a real difference in the world. Hank Aaron, in his nice essay, suggested that the “environment in law school is ruthlessly meritocratic to an extent true of few undergraduate programs.” In one narrow sense that is true. Yet in another way, that’s definitely untrue. At a minimum, the criteria through which law-school “merit” is judged deserve greater scrutiny. Much of the legal curriculum is famously unrelated to actual legal practice. Many personal skills and knowledge relevant to excellent lawyering are basically unaddressed and untaught in elite legal education.
In my own teaching, students with higher math GRE scores perform much better in my economics and medical cost-effectiveness courses. That clearly matters. Yet our MA students go on to many social welfare, public health, and social work roles. For many of my students, technical skills probably matter more within our own building than these skills matter after students walk out of our door.
There is also a weirdly revealing way we try to read people’s resumes backwards to establish their proper ranking in our meritocratic order. Donald Trump wants to inspect President Obama’s college transcripts, presumably to see whether the President benefitted from affirmative action. Leaving aside the racialized insult, it’s as if Barack Obama’s subsequent achievements leading Harvard Law Review, serving on the University of Chicago faculty, rocketing to the United States Senate and to the presidency would somehow be invalidated if it turned out that he had received a B- in freshman calculus or didn’t ace the LSAT.
Race-conscious admissions aren’t my favorite. They don’t address earlier, more fundamental obstacles to upward mobility. These policies can bring genuine costs, most notably the genuine human costs imposed on worthy rejected applicants such as Allan Bakke.
A policy that results in large and visible differences in entry qualifications would be especially costly and unwise. The achievement gap is a real problem. There is something dishonest and undignified about seeking to explain it away or in criticizing generally-reasonable specific content of the tests that yield the most disturbing race/ethnic differences in mean scores.
For all its problems, race-conscious affirmative action remains necessary. I haven’t seen credible alternatives that aren’t worse. Abolishing affirmative action, or dramatically curtailing it, could easily bring great harm.
I’ve taught in elite academic settings for a while now. Academic life being what it is, many of my students come from wealthy backgrounds. Children of the affluent can attend great high schools and extra tutoring. They can take unpaid internships. They can spend semesters abroad learning German. They can take an unpaid intern at Greenpeace or Slate rather than spend the summer waiting tables at Chili’s.
The above paragraph underscores the reality that American meritocracy retains a strong, perhaps inherent class overlay. This is a serious problem, most recently emphasized in Chris Hayes’ new book. In an era of rising inequality, the problem becomes correspondingly more troubling.
Still, at least these affluent parents are using their wealth to help their children become capable and accomplished, genuinely qualified for competitive jobs and educational opportunities. Despite some troubling structural implications, these human capital investments are more admirable and productive than just providing your kids with fancier stuff.
My Friday Wall Street Journalincludes the following story, which concerns “High-End Luxury Suites Aimed at the Sulky Set”:
As families have gotten smaller and houses have gotten larger, the teen room has begun to evolve into a social center in its own right in recent years. Experts say that’s partly because parents today spend more time with their children than ever before….
The story includes an amazing slideshow of kids’ living areas with indoor basketball courts, Harry-Potter-inspired passageways, and more. On a more tasteful opulent note, some parents are still thinking big:
Jacquie Kim, a mother of two in San Diego, turned a pool house into a teen lounge for her son Alex’s 16th birthday, partly as a way to keep him home after he got his driver’s license. She hired designer Kristy Kropat, who turned a Mediterranean-style casita into a modern-industrial room with modular furniture, LED accent lights, metallic gray walls with pixelated Space Invader vinyl decals and bright pops of color.
1. A small crude dwelling forming part of a shantytown inhabited by Mexican laborers in the southwestern U.S.
2. A luxurious bungalow serving as private guest accommodations at a resort hotel, especially in the southwestern U.S. or Mexico.
This being the “Mansion” (a.k.a. real-estate porn) section of the paper, I’m betting definition #2 is operative. That’s too bad, because Alex might learn more from the first one.
The Mansion section, like its New York Times’ counterpart “Style,” exists to chronicle the conspicuous consumption of a tiny slice of affluent America. As a cultural signifier, it’s still depressing. At least I think it’s depressing, since I’m not quite sure what a cultural signifier really is.
I do know one thing. If you’re building your tween a room-size “closet inspired by ‘The Lion, the Witch and the Wardrobe’,” you might provide her with something a little bit more lasting by giving her a little bit less. I’m not a wealthy person. So I don’t understand what’s really appropriate or wise to provide your child if you live in a multi-million dollar home. A little proportion and restraint does seem in order.
Sometimes I wonder if George Soros or the Nation magazine doesn’t secretly produce these stories. From a broader perspective, the “Mansion” section provides a weekly Veblen-ian reminder that there’s one group of Americans who truly have so much money that they can’t figure out how to spend it, beyond purchasing bigger and more impressive monuments to their own wealth. Our tax system might do more to help them address this problem.
Wednesday’s New England Journal of Medicine article on the Oregon Medicaid lottery has provoked a firestorm of reaction. I’m not sure what I can add after reading Austin and Aaron’s great posts. They’re just killing this one.
I’m now pondering the Supplementary Appendix prepared by the study team. It’s a pleasure to view the craftsmanship and clarity on display there. Many people are reading this study with an eye towards the big-ticket questions of the Affordable Care Act. I believe that’s a mistake. The moral and pragmatic case for expanded health coverage was overwhelming before these Oregon findings were released. That case is no less overwhelming now.
As Aaron and Austin recount, Oregon Medicaid lottery winners were markedly less likely to face catastrophic medical bills or endure other forms of financial distress. Lottery winners were more likely to report that they received high-quality medical care through a usual provider who met their treatment needs. Medicaid recipients in the experiment were nine percentage-points less likely to satisfy screening criteria for depression, a 30% decline in the base rate. Lottery winners over age fifty were markedly more likely to receive mammograms, Pap smears, and other preventive services. People were more likely to receive depression or diabetes medications.
Yet the case for Medicaid expansion is not the only or the most interesting question in-play here. Distinguished Harvard economist Joseph Newhouse emailed that the Oregon study “is a Rorschach test of people’s views of the ACA.”
That’s perhaps unavoidable. It’s unfortunate, too. One sad consequence of polarization is our reflex to interpret every finding in light of its polemical utility in the broader political fight.
The most obvious power problems arise because most Medicaid lottery winners never actually enrolled. As the Oregon researchers described in the Quarterly Journal of Economics,lottery winners were mailed an application and given 45 days to submit the appropriate paperwork establishing Medicaid eligibility:
About 30% of selected individuals successfully enrolled. There were two main sources of slippage: only about 60% of those selected sent back applications, and about half of those who sent back applications were deemed ineligible, primarily due to failure to meet the requirements of income in the last quarter corresponding to annual income below the poverty level, which in 2008 was $10,400 for a single person….
Lottery winners and controls sometimes obtained other coverage. Life intruded in other ways. All-in-all, winning the lottery was associated with a 25 percentage-point increase in actual Medicaid receipt.
Second, the study team lacked baseline clinical measures. So they could not specifically control for baseline health. They could segment the analysis into patient subgroups based on age or other factors. When researchers tried to drill down to these subgroups, they didn’t see much, but the confidence intervals were also very wide.
To give you a sense of the challenge, Oregon Medicaid receipt was associated with an estimated increase of 1.76 percentage points in new diagnoses for hypertension. Since the control group mean was 5.6 percent, Medicaid receipt was associated with a 30% increase in the detection of previously undiagnosed hypertension within a relatively short period.
That’s not statistically significant, but it’s potentially quite important. Unfortunately, it’s inherently difficult to tease out such a small effect. For all the thousands of study participants, back of the envelope calculation indicates this corresponds to something like 33 more detected cases within the treatment than the control group.
Ironically, the overall population effect on hypertension seemed quite similar in the Oregon experiment and the RAND HIE. Free care within the original RAND HIE induced a (non-significant) reduction of 0.7 mm Hg in diastolic BP. In Oregon, Medicaid receipt was associated with an (also non-significant) average reduction of 0.81.
I believe that a longer intervention with a larger sample will yield real, though modest health impacts on hypertension, diabetes, and other conditions. The abstract to the New England Journal study states: “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years.” That’s correct, but easily misleading given the power limitations and some promising preliminary results.
I believe both ideological camps in American health policy should probably gain some comfort, and some discomfort, from these results. Medicaid absolutely helps people. There’s an OJ-searching-for-the-real-killer quality to arguments against health reform that claim otherwise.
Yet the critics are right that simple Medicaid enrollment failed to powerfully move the needle on basic cardiovascular measures as much as many of us hoped it would. Public insurance can and must do better in these areas.
Medicaid could certainly do a better job promoting individual health. Some issues are pretty basic. The original RAND HIE found that patients were particularly price-sensitive in their demand for dental and vision services.* Low-income participants in the RAND Health Insurance Experiment assigned to free care could see better, and had better oral health than their peers assigned to cost-sharing plans.
These lessons should be more consistently applied. Like many other states, Oregon doesn’t cover non-emergency dental services or vision care in its Medicaid program. Covering these services would bring immediate health benefits. Expanding such coverage would also engage people who have other difficulties such as undetected cardiovascular difficulties.
As in the original RAND Health Insurance Experiment, there’s no evidence that Oregon’s Medicaid enrollment improved health behaviors. Indeed Medicaid receipt was actually associated with increased smoking, presumably because lottery winners had increased disposable income.
Expanded Medicaid coverage is essential. Yet it’s only the first step to improved quality of care and improved population health. Improved disease management, accountable care organizations, and primary care medical homes are important, too. So are measures such as work-based wellness programs, smoking cessation programs, alcohol, and tobacco taxes to address public health concerns.
The Oregon research team should be proud of what they’ve accomplished. Their findings underscore the immediate benefits of health reform, but also how much work we still must do.
*The Affordable Care Act fills many holes in the areas of mental health and substance abuse services, too. That’s a topic for another occasion.
Helaine then expresses skepticism about “nudges,” and more interestingly, about the inherent limits of behavioral economics. We discuss the pitfalls of a professional consensus in which retirement experts come to regard misguided individual behavior and impatience as the fundamental challenge in retirement saving policy. I myself am ambivalent about this issue. Our culture of consumption and pervasive innumeracy are genuinely serious problems. Yet one can narrowly focus on these issues and thus neglect the importance of stagnant wages and other macroeconomic problems.
Here we discussed the inherent shortcomings of 401(k) accounts, and why the New School’s Teresa Ghilarducci has been called the “Most Dangerous Woman in America.” I lament the public sector’s failure to properly finance its retirement obligations, which undercuts the political case for professionally-managed defined-benefit pensions.
Here are the first two segments of my interview with Helaine Olen regarding her book, Pound Foolish. You can see a more extensive interview with Olen, with arguably better production values, on Frontline’s the retirement gamble this week.
In Part 1, we discuss how she got into this game, what it was like to do the Money Makeover feature for the Los Angeles Times. As I nod to project the wisdom of a sage and swig diet soda, we discuss what I regard as the financial industry’s most basic dilemma: The best advice fits on a 3×5 index card and is available for free at the library.
We also discuss why divorce is bad for your financial health, and why trusting financial advisors is generally foolish, even if one assumes that this person is above ethical reproach. We note the false hopes placed in personal financial skills to offset stagnant wages for millions of Americans. Finally, we observe that Suze Orman isn’t one of the world’s greatest financial advisors. She has found one of the world’s greatest sales gigs. At least Orman is less predatory than many of the other finance gurus.
In Part II, we start to get into the meat of things. We start by discussing the dinners for senior citizens, at which entrepreneurs sell rip-off variable annuities to seniors desperately (often fairly realistically) afraid that they will outlive their savings. As a warm-up, these salespeople predictably trash Social Security—the one solid source of annuitized wealth that Americans can turn to in their retirement years. Here’s a link to Personal Finance for Dummies, which beats most more pretentious personal financial advice books around.
I’m cross-posting this with the Reality-based Community. I’m doing so to compare the comment threads on the two sites.