White House Economic Report Cites IPR Faculty Research
Studies support policy recommendations on climate change, education, and the economy
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The 2023 "Economic Report of the President" to Congress outlined some of the country's greatest economic challenges from food insecurity to affordable education, presenting policymakers with possible solutions based on research from distinguished academics, including seven IPR faculty.
The Effectiveness of Early Childhood Investments
The report, compiled by the White House Council of Economic Advisers (CEA), makes a case for why investments in children from their earliest years, from nutrition to education, can have a tremendous impact on U.S. children across their lives by generating "substantial benefits, with returns over the child's lifetime that often considerably exceed costs." It is released in conjunction with president's budget.
For example, the report cites evidence that "increased access to healthier food—provided to children through nutrition assistance for their families or through meals while in childcare or at school—lead to improved health, cognitive functioning, and long-term well-being."
In particular, the report details research by IPR economist and director Diane Whitmore Schanzenbach on the Supplemental Nutritional Assistance Program, or SNAP, which was formerly known as the Food Stamp Program. Throughout the report, her work is mentioned seven times in support of policy recommendations on early childhood education, food assistance programs, and women's employment.
The report refers to a study by Schanzenbach and her colleagues examining the rollout of food stamps in the U.S. between 1961 and 1975. They discover that getting food stamps improved children's health. In another, she and her colleagues show that children having access to food stamps before age five improves long-term economic outcomes and increases mothers' economic independence.
Although the report touts the benefits of school meals, it also summarizes Schanzenbach's study that provides a counterpoint. Some specific groups see improvements, but the study finds little evidence that school breakfasts improved children's health, behavior, or achievement.
Providing Evidence for Investments School Funding and Preschool
In terms of school funding, the report points to a study by IPR labor and education economist Kirabo Jackson and Rucker Johnson of the University of California, Berkeley, which demonstrates a link between early childhood education (ECE) investments and subsequent school investments.
Schanzenbach and her colleague Elizabeth Cascio of Dartmouth College examine the impact of former President Barack Obama’s "Preschool for All" initiative in 2013. The researchers observe that preschool enrollment rates for children from both low- and high-income families increased as a result of state programs. The researchers show that the programs increased children's test scores, the likelihood of mothers working, and the amount of time they spend reading together with their kids.
Expanding childcare access might bring more women to the workforce, according to another referenced study by Schanzenbach and her colleagues. The study was mentioned as an example of important but limited research on the decline of women's employment.
Staff and child interactions and relationships are an important aspect of ECE quality, according to the report. IPR developmental psychologist Terri Sabol's research supports that claim, and shows that in the early years of a child's life, stable, attached relationships with caregivers serve as a crucial foundation for their healthy development.
High-quality kindergarten programs might lead to substantial improvements in life chances, including economic gain, according to another study by Schanzenbach and her colleagues.
Building Stronger Schools, Colleges, and Universities
Rather than just boosting enrollment, the report examines whether expanding successful institutional programs, along with more flexible federal support, could have a significant impact on college completion.
The report features research by Jackson and his colleagues, in support of school spending policies. Spending increases led to significant improvements in school quality, including student-to-teacher ratios being reduced, teacher salaries being raised, and school years being extended, according to the report.
Schanzenbach’s work was also referenced to illustrate how the decline in community college enrollment weakened the labor market during the COVID-19 pandemic.
IPR economist Ofer Malamud’s examination of college worth was pointed out to illustrate that while the earnings premium for those with a college education is well documented, college still might not be the right fit for everyone.
Pursuing Growth-Enhancing Policies in Today’s Changing World
In an economy, output depends on both human and physical capital, as well as a productivity factor, which measures the efficiency of workers, machines, and other inputs. To sustain their growth, private and public investment is essential, according to the report.
For instance, culture influences output, according to research by finance professor and IPR associate Paola Sapienza. Her study reveals that including cultural elements could make economic discourse richer, better able to capture real-world nuances, and ultimately more useful.
The Economic Costs and Financial Risks of Climate Change
The report also covered the threat of climate change, and its tangible effects, namely warmer average temperatures, frequent droughts, stronger storms, and riskier wildfires. Beyond these more tangible consequences, some are more nuanced but equally devastating and in need of policy intervention, as explained in the report.
The report summarizes research by IPR economist Jonathan Guryan and his colleagues on how high temperatures can lead to more infant deaths and negatively impact newborn health. Additionally, the study highlights that temperatures this extreme can harm fetal health, causing birth weight to drop and the chances of low birth weight to increase.
A cited study by strategy professor and IPR associate Benjamin Jones finds that some countries' economic growth may also be affected by climate change. Generally, temperature increases hurt gross domestic product, especially in poor and hot countries.
Guryan and Jones' work was referenced to support climate change policy recommendations. The White House economists recommend creating and disseminating climate risk knowledge, planning long-term for climate change, and providing accurate climate risk pricing.
"Our nation has faced tremendous challenges in recent years. A deadly pandemic and unprovoked war in Ukraine have tested our economy unlike any time since the Great Depression," President Joe Biden wrote in the report’s introduction. "It is important to remember, however, that the economic anxiety so many have felt did not start with the pandemic."
Read the 2023 "Economic Report of the President."
Diane Whitmore Schanzenbach is the Margaret Walker Alexander Professor of Human Development and Social Policy. Kirabo Jackson is the Abraham Harris Professor of Education and Social Policy and Professor of Economics. Terri Sabol is associate professor of human development and social policy. Ofer Malamud is associate professor of human development and social policy. Paola Sapienza is the Donald C. Clark/HSBC Chair in Consumer Finance Professor. Jonathan Guryan is the Lawyer Taylor Professor of Education and Social Policy. Benjamin Jones is the Gordon and Llura Gund Family Professor of Entrepreneurship and Professor of Strategy. All are IPR faculty members.
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Published: August 1, 2023.