This article originally appeared in Forbes
Despite widespread political polarization, there is an emerging consensus in Washington that promoting opportunity should be a primary goal of public policy. Among today's middle-aged adults, just 30 percent of those who grew up poor have incomes putting them in the top three-fifths of families. If family background were irrelevant, we would expect that figure to be 60 percent.
The question of how to expand opportunity for low-income children will be the topic of a conversation on Thursday among Jared Bernstein, of the Center on Budget and Policy Priorities, the Brookings Institution's Richard Reeves, and me at the National Press Club in Washington, D.C. The event will coincide with the release of a new report put out jointly by the Manhattan Institute and the Center on Budget that presents two distinct approaches to expanding opportunity for low-income children. As the campaign season ramps up, these two agendas--developed by Bernstein and by me--can serve as the basis for a national conversation around upward mobility.
Conservative approaches to federal policy are distinct from liberal ones in a number of ways. They emphasize what David Brooks has called "epistemological modesty." We simply lack the knowledge to rank-order by importance the factors that impede upward mobility, and we know surprisingly little about how to address these impediments effectively.
Conservatives also prefer approaches that give discretion and authority to state and local providers, public and private. Community-specific knowledge is greatest the more local are efforts to promote opportunity. At the same time, the federal government can ensure that poor states do not bear all the costs of opportunity-promoting initiatives and that states can afford such efforts in economic downturns.
While local programs can be effective, they must be accountable and subject to evaluation. Much of what the federal government does to promote upward mobility has been demonstrated to be ineffective. As importantly, simple financial incentives embedded in our safety-net and tax policies may be more effective at changing behavior than intricately planned social programs. But just as those policies can promote mobility-enhancing behavior, they can also lead to behaviors that thwart opportunity.
An effective opportunity platform built on these principles would include several planks. First, it would devote significant federal resources to identifying effective state and local approaches to expanding mobility, but it would ruthlessly defund approaches that are shown not to work. I propose the creation of an Opportunity, Evidence, and Innovation Office in the White House to consolidate mobility-promotion efforts and orient the executive branch toward evidence-based policymaking. An Opportunity Advisory Commission would provide recommendations to Congress for funding and de-funding federal programs to promote opportunity.
Initially, most efforts to promote opportunity would be found ineffective, and that would promote the shuttering of wasteful federal programs. In time, however, we would identify successful approaches and the elements common to effective providers. We would build on promising efforts like READY4K!, which sends parents three text messages a week with parenting tips and has the potential to cut in half the reading gap between poor and middle-class children. In the long run, the federal government would spend less on social programs, but the ones it would fund would be effective.
Expanding opportunity also requires that we reform our safety-net programs. The policy reforms of the 1990s--including the replacement of the old cash welfare system with a new program featuring work requirements and time limits, as well as more generous tax credits for low-income working parents--were followed by increased work by single mothers, declining poverty among their children, and improvement in out-of-wedlock childbearing trends. I propose block-granting a dozen of the biggest anti-poverty programs and allowing states greater latitude to determine how to spend the grants. Most beneficiaries would face work incentives and time limits, but states could exempt the most vulnerable families from these requirements. I would also reform the Social Security Disability Insurance program to make work more practical among those impaired beneficiaries who want to work part-time and to discourage the non-impaired from receiving benefits.
Federal policy to promote opportunity should not only require more of beneficiaries of safety-net programs, it should be more generous in helping low-income workers and should promote delayed, planned, and marital childbearing. My agenda would expand the Earned Income Tax Credit to cover all low-income workers, making the size of the credit the same for childless workers and working parents. To provide additional help to parents, the size of the Child Tax Credit would increase--but only for married tax filers.
Finally, I propose the clarification of legal questions to promote the adoption of "income share agreements." ISAs would fund higher-education expenses by stipulating that investors will pay a fixed amount in return for a specified share of the student's future income over an agreed-upon period. By offering more or less generous terms to students depending on their anticipated future earnings, income share agreements would pressure schools to produce better student outcomes, lest they lose out to other institutions where investors offer better terms to students.
A conservative approach to expanding opportunity along these lines would be more effective than an alternative approach that sees rising income inequality as the primary barrier to greater upward mobility and more generous spending on existing policies as the appropriate solution. Mobility rates have not fallen as inequality has risen, and new research suggests that men in low-inequality countries like Sweden may have no worse mobility than in high-inequality countries like the U.S. At the same time, upward mobility has not risen as antipoverty spending has ballooned over time. It is time to try something new if we are to help poor children to rise.
Scott Winship is the Walter B. Wriston Fellow at the Manhattan Institute for Policy Research. You can follow him on Twitter here.
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