Thursday, July 26, 2012

One more point on poverty...

...I kind of alluded to it, but it's worth making this explicit: the racial incidence of poverty alone leads me to steeply discount Bryan's behavioral list as the driving factor, and it leads me to place a lot more emphasis on social and institutional determinants (in which I include all the intergenerational constraints I discussed earlier).

Notice that we don't usually think about poverty in the way that Bryan does. Why is China experiencing such phenomenal growth now? Why is South Korea doing so well and North Korea doing so poorly. Is there a behavioral difference? Are North Koreans more irrational than South Koreans?

Of course not.

It's a social and institutional difference.

You can see the same social forces at work in the emergence of the South out of poverty in the middle of the last century.

If poverty weren't such a geographically distinct phenomenon, this might be harder to carry over to discussions about poverty in the U.S.. But poverty is geographically distinct - it's not smoothly distributed geographically.


  1. I've known quite a few of the long term unemployed over the years. You're certainly right that this sort of thing runs in families. There are all sorts of reasons why that I'm sure we could go into at length.

    But, putting my conservative hat on, the problem really is: should society treat them as victims to be helped? This is where the moral hazard of welfare comes it.

    Even if welfare is only enough to live basically on then many people who dislike work will choose it as an alternative. I know many people who have done this and have no intention of ever working, "funemployment" it is called (welfare is much more generous in Ireland though and has few time limits). Similarly, if parents believe that the fortunes of their children will not be harmed by their deficiencies then they will be more likely to have children. I don't think many of them think that way, though some certainly do. The funding of children though welfare also makes them more likely to have children.

    Now, I'm not saying that all this breeding of the poor will weaken the species (though it's not a completely stupid argument). But, it does mean that more children will grow up in the sort of unproductive environments Daniel describes. This wouldn't be a huge problem if the state could really do what it sets out to do and counteract these effects. But, it obviously can't. What's genetic just can't be changed and the habits of parents and friends are always going to be influential.

    So, although it may not be moral to let the sins of the father be visited upon the son, it is inevitable that it will happen anyway and it prevents more misery in the future.

    1. In the U.S. (and I assume many other places), a lot of benefits are tied to whether you have kids, which I think is a good way to arbitrate this question. Single males can't access nearly as much as mothers, and probably for good reason. When a kid is involved and that kid is disadvantaged because of a parents' decision or just because of the decisions forced on parents the case for helping them and the case for thinking about them as victims is considerably stronger.

      I do find sorting this all out to be very tough. Why do "funemployment" types have that attitude. Some certainly just plain don't want to work. But bad prospects can also instill that sort of attitude in people (and this is really where the geographical concentration point comes in). If your whole community offers you no hope through the labor market and you don't have the resources to break out of that you're going to develop an attitude over time that devalues work and values alternative uses of your time.

      Certainly some people are just slackers. But I'm not personally sure I know how to sort that out.

      They used to say that about Southerners in general. They just weren't interested in working or improving their economy. The second half of the twentieth century has completely obliterated that claim, and that was largely accomplished through changing institutions and large federal investments in the Southern economy. That may not always be the solution - I'm not saying that. But it should lead people to question what at first blush seems like "culture" or "choice". Even if they can be said to "just dislike work" it doesn't follow that there's nothing to be done.

    2. I can see the sense in giving better benefits to mothers and single mothers. But, the incentive this gives poor unemployed women to have children is the big downside. In Ireland the it's not so much the money as ranking in social housing lists. Single mothers and young families come close to top. A young woman living with her parents can often move away by having a child. You don't have to be very cynical to see the problem.

      The place where I live in Ireland the unemployment rate is 28% and the youth unemployment rate is 50%, those are the highest of any city in Ireland. There is a high minimum wage (8.65euro/hr ~$10.60) and quite a high rate of unemployment benefit (188euro/week ~$231). Those things certainly don't help, and neither does Ireland's precarious financial position encourage investment. But I agree that there's much more to it than that.

      Living in a place with such high unemployment is a strange experience. Lots of behaviour that would be unacceptable or at least not normal is acceptable here. If you know person X could get a job if he wanted one you can't tease him about that even if it's true because so many other people are unemployed. Events, like music gigs, are often organized for odd times like evenings on weekdays because the weekend has become increasingly meaningless. It's acceptable to be unambitious, but there again that's acceptable all over the place. What's different is it's difficult to even talk about jobs without making other people feel bad, it's best not to talk about holidays or house buying for the same reason. Much of this could change quite quickly given the right conditions, though some of it wouldn't.

  2. RE: But, the incentive this gives poor unemployed women to have children is the big downside.

    Are you sure that it really works out like that? In the US, the people who are likely to be dependent on benefits later on in life are at a greater risk to have a child before they even finish high school and can get benefits.


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