Robert M. La Follette School of Public Affairs
Thursday, July 10, 2014

Wolfe examines reciprocal relationship between poverty, behavior

Bobbi Wolfe Bobbi Wolfe

Barbara Wolfe wants to know why people act the way they do and how society might help them make better choices.

In one research project that could help Wisconsin policymakers refine a state program, the economist is studying the effects of vouchers that subsidize housing costs for low-income people.

She and economist Robert Haveman are using Wisconsin administrative data to study the effects of housing voucher receipt on employment and earnings, family composition, neighborhood quality and the use of other government programs. A portion of their work is funded by a $194,000 grant from the John D. and Catherine T. MacArthur Foundation.

"An early analysis of ours found that traditionally disadvantaged populations — such as racial minorities and poorly educated individuals — respond to housing voucher receipt in a manner that may improve their long-term economic self-sufficiency and job success," Wolfe says. "A cost-benefit analysis demonstrates that housing vouchers are a good use of tax dollars."

Wolfe, Haveman and fellow researchers Thomas Kaplan of the Institute for Research on Poverty and 2007 La Follette School alum Deven Carlson, now a political scientist at the University of Oklahoma, also found that earnings were higher for participants in a U.S. Department of Housing and Urban Development program in Milwaukee that required Section 8 voucher recipients to contribute 30 percent of their income toward rent and to sign a lease addendum that requires them to be working or taking steps to become employed. Carlson described the program in the spring 2012 La Follette Policy Report.

With the same dataset, Wolfe and Haveman have determined that families in urban areas use vouchers to move to better school districts. "Now we are starting to look at the academic outcomes of the children in those families," Wolfe says.

Children's academic outcomes are another component of very different research Wolfe is conducting with psychologists. They are using brain scans to understand how poverty leads to poorer cognitive skills — and perhaps poorer results on standardized academic tests.

"We know income is related to health — the more money you have, the more likely you are to be healthy," Wolfe says. "We also know that poor children perform worse in school than do rich children. The older the child, the worse the health. We believe more than genetics are at play."

Wolfe and University of Wisconsin–Madison psychologist Seth Pollak and others are using brain scans and family information collected at five sites by the National Institutes of Health. "We are trying to see inside the black box to understand why are children in low-income families doing worse academically than middle-income and high-income families," Wolfe says. "How does poverty end up with the outcome that poor children do less well?"

Their research is using the structure of the brain to explore that black box and gain insight into part of the answer. "The brain has lots of plasticity," Wolfe says, "so if we can figure out what environmental aspects influence which parts of the brain, we can create interventions to help poor children do better and thus reduce disparities."

They have found a significant association between family income and different sections of the brain, as Wolfe reported in the spring-summer 2013 La Follette Policy Report.

They found that children from lower income backgrounds had lower hippocampal gray matter density than children from higher income families. The findings suggest that differences in the hippocampus, perhaps due to stress tied to growing up in poverty, might partially explain differences in long-term memory, learning, control of neuroendocrine functions and modulation of emotional behavior.

"We analyzed hundreds of brain scans from children made soon after they were born and then repeated every few months until they were 4 years old," says Wolfe, noting that those findings were published in December in the journal PLOS ONE. "Children in poor families lagged behind in their development of the parietal and frontal regions of the brain — deficits that help explain behavioral, learning and attention problems more common among disadvantaged children."

The study found no meaningful difference in gray matter between children of middle-income families and those from relatively wealthy ones. For poor families — who ranged from extremely poor with almost no cash income to a few tens of thousands of dollars per year — the list of potential environmental factors is lengthy. Poor nutrition and lack of sleep, lack of books and educational toys, parental stress, an unsafe environment, and limited enriching conversation are just a few of the potential contributors, according to Wolfe.

"All of these may play a role," Wolfe says. "We don't really know their individual contribution or the combined effect. But we do know we observed no apparent structural differences very early in life. This might be viewed as very good news, as it suggests that public policy can reduce the gap."