fragmentation on the EITC would be positive because marriage would render mil- lions of EITC recipients ineligible for any EITC benefits by adding a second wage earner to the household and/or possible positive effects on male labor supply. If marriage, as discussed in the next subsection, would decrease net expenditures on the EITC, then the approach used in this study would underestimate the taxpayer costs of family fragmentation by ignoring the EITC.
2. The use of Holzer’s results in this study overestimates the impact of low income in childhood on adult outcomes.
We rely on results from Harry Holzer’s research to make two calculations—costs to the justice system and increased tax payments. Holzer and his colleagues make a case that the assumptions that underlie their estimates are cautious, and we find their case persuasive. However, they make a broad interpretation of the relationship between childhood poverty and life outcomes as follows:
[W]e interpret the causal effects of childhood poverty quite broadly. They include not only the effects of low parental incomes, but also of the entire range of environmental factors associated with poverty in the U.S., and all of the per- sonal characteristics imparted by parents, schools, and neighborhoods to chil- dren who grow up with or in them. We define “poverty” broadly in this way in part because researchers have been unable to clearly separate low income from other factors that affect the life chances of the poor, and also because the set of potential policy levers that might reduce the disadvantages experienced by poor children go beyond just increasing family incomes. Of course, in defining poverty this way, we also assume that the entire range of negative influences
associated with low family incomes would ultimately children were instead raised in non-poor households.
46 be eliminated if all poor (Holzer’s emphasis)
Childhood poverty may be a proxy for “environmental factors” that may or may not be improved by the income gains from marriage. Thus, reliance on Holzer’s estimates of the costs of childhood poverty could potentially overstate any bene- fits of marriage that come from marriage reducing childhood poverty. One way to think about this issue carefully is to list the broad pathways (i.e., “the environ- mental factors”) through which growing up in poverty is associated with child- hood disadvantage:
Low income may mean lower quality food, shelter, transportation, and medical care for children.
Low income may necessitate living in worse neighborhoods (fewer parks, more crime, less social trust), and poor neighborhood quality may adversely affect child well-being.
Low income may mean attending worse schools.
Low income may negatively affect parenting processes (warmth, monitor- ing, discipline) because of the stress economic hardship places on other- wise competent parents.