Michigan Today - October 2007

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Sheldon Danziger: What really affects poverty?

by Lynne Raughley

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University of Michigan Professor Sheldon DanzigerIn 1995, Professor Sheldon Danziger of the Gerald R. Ford School of Public Policy made a bad prediction.  At a Congressional hearing on the soon-to-be-passed 1996 welfare reform bill, Danziger, an economist who'd studied poverty for many years, testified that the policy change, which was intended to "end welfare as we know it," would have largely negative consequences for poor women and children.

After the bill became law, Danziger and his colleagues studied its actual effects on employment and poverty rates among single mothers. To their surprise, the repercussions turned out to be not quite what they had expected.

"Our predictions were more negative than the actual outcomes," he says, although the accuracy of some of them was also borne out by the research. Why did he get it wrong?  There were many factors, among them a booming economy, a 1997 increase in the minimum wage, and the "work first" initiatives adopted by most states, which led to unexpectedly large numbers of single mothers moving from welfare to employment.  Danziger presented an analysis of his predictions and the outcomes at the July 2006 Urban Institute Welfare Reform Roundtable, in a paper subtitled "New Lessons Learned and Old Lessons Confirmed."

He uses this case as a teaching tool, and to illustrate that success as a scholar "depends upon the willingness to realize that what you thought, was wrong." Danziger has been teaching, mentoring, and training students, researchers, and practitioners at the Ford School since 1988, when he was the director of the Ford Foundation Program on Poverty and Public Policy. In 2002 this program merged into the National Poverty Center, which Danziger co-directs with Ford School Dean Rebecca M. Blank. Its mission is to "conduct and promote multidisciplinary, policy-relevant research on the causes and consequences of poverty and provide mentoring and training to young scholars."

"Most people who study poverty believe that policy changes can reduce poverty," Danziger says. This belief isn't universal.  "Since the Reagan administration, the public is less willing to believe that government should do something; and those who do think that government should do something are less willing to believe that it can do something."

But government policy has an inevitable effect on poverty, whether as a result of anti-poverty programs, or the absence thereof. And while the issue has not spent much time in the limelight since Lyndon B. Johnson declared war on poverty in 1964 (though presidential candidate John Edwards has called it "the great moral issue of our time"), certain high-profile policies do have a marked effect.

Two government policies shown to have measurable effects on poverty rates are the minimum wage (recent legislation will boost the national rate to $6.55 per hour in 2008, though it is already higher than that in many states), and expanded child health insurance. Right now such programs are state-by-state—Wisconsin has what Danziger calls "a model program" for child health coverage—but Congress and the Bush Administration have been wrestling over plans to create a national program.

If that happens, Danziger won't assume that the nation no longer needs to worry about that problem. Experience tells him never to accept assumptions, but to continue to measure, evaluate and question. After all, he says, "Our job as researchers is to sort out what works and what doesn't."

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Lynne Raughley

"Faculty at Work" writer Lynne Raughley lives in Ann Arbor Michigan with her husband and their three-year-old son.