How Randomistas Can Help Fight Inequality

By Andrew Leigh
Member, Australian Parliament

You might think some theories are so obvious they don’t need to be proven.

  • To discourage early pregnancy, ask teens to care for a baby doll programmed to demand attention at all hours.
  • Juvenile delinquents can be ‘scared straight’ by spending a day in jail to see how tough prison really is.
  • What young unemployed men most need is job training.

Each statement sounds completely reasonable, doesn’t it? Unfortunately, randomized trials showed that girls paired with an infant simulator for a week were twice as likely to become teenage mothers. Scared Straight programs increased crime. And job training programs for unemployed youths have often produced disappointing results.

The methodology behind randomized trials is remarkably simple: assign participants to an experimental or a control group based on the toss of a coin or a computerized random number generator. The difference between the two groups tells you the impact of the policy. When it comes to tackling disadvantage, randomized trials don’t just spotlight failure, they can also shine a light down new paths for addressing poverty.

In the 1960s, researchers commenced a randomized evaluation of the Perry Preschool program designed for disadvantaged children in Michigan. The study found that by the time the participants were in their twenties, those who had been to preschool were more likely to own a car, own a home and have a steady job. They were also less likely to use drugs and less likely to be on welfare. By age forty, a quarter of those in the preschool group had been to jail, compared with half of the control group. Every dollar spent on the program returned between $7 and $12 to society.

In the classroom, the U.K. Education Endowment Foundation has so far commissioned over a hundred evaluations, many of them randomized, to test what works in the classroom. Among those randomized studies that produced positive results are a Singaporean-designed mathematics teaching program and a philosophy-based intervention encouraging students to become more engaged in classroom discussion.

Educational “randomistas” – as proponents of the trials are sometimes known – are also evaluating how to get more low-income children to university. In Ohio and North Carolina, researchers worked with tax preparation company H&R Block to identify low-income families with a child about to finish high school. Half of these families were randomly offered assistance in completing a university financial aid application, a process that took about eight minutes. The intervention boosted college attendance by a quarter.

If government isn’t working well, the most affluent can turn to other alternatives. They can rely on private healthcare, private education, and private security. They are less likely to be unemployed, and have family resources to draw upon in hard times. For the top 1 percent, dysfunctional government may be annoying, but not life-threatening.

But for the most vulnerable, government can mean the difference between getting a good education or struggling through life unable to read and write. Those who depend on government depend on government programs actually working.

We live in a world in which failure is surprisingly common. In medicine, out of the 10 drugs that look promising in lab tests, only one ends up getting approval. In education, just one tenth of the randomized trials commissioned by the What Works Clearinghouse, a project of the U.S. Department of Education, produced positive effects. In business, only a fifth of Google’s randomized experiments showed actual product improvement.

It’s no different in social policy. In the words of the late sociologist Peter Rossi: “The better designed the impact assessment of a social program, the more likely is the resulting estimate of net impact to be zero.”

Conducting more randomized evaluations isn’t an excuse to give up on the fight against inequality. We don’t abandon the search for a cure for cancer just because most cancer drugs to emerge from the laboratory don’t make it through clinical trials. Similarly, the goals of cutting crime, raising test scores, and providing jobs for everyone who wants them should be pursued even if a specific program comes up short.

The more we ask the question “What’s your evidence?,” the more likely we are to find out what works – and what does not. By evaluating social policies, discarding those that don’t work, and boosting those that do, government can have a far greater impact on reducing disadvantage. An experimenting society is likely to end up a more equal society.

Skepticism isn’t the enemy of optimism: it’s the channel through which our desire to solve big problems translates into real results. Given the chance, randomistas can deliver a more equal world, one coin toss at a time.

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Reposted from Inequality.org

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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