Exam Results

1
Exam Results

• ADD 12 to the score on the exam.
• Mean80 (after 12 added)
• A 95 and higher (6)
• A- 90 to 95 (8)
• B 87 to 89 (11)
• B 83 to 86 (12)
• B- 80 to 82 (6)
• C 77 to 79.5 (10)
• C 73 to 76 (11)
• C- 70 to 72 (8)
• D 60 to 69 (9)
• F under 60 (4)

2
Explanations for Poverty

• Today we will
• Begin examining explanations for poverty and
  economic stratification more broadly
• Individual explanations
• Continue into Thursdays class
• Structural explanations
• How individual and structural explanations
  combine to create local variation
• Throughout
• Challenge stereotypes of the poor
• Explore nonmetro and metro differences

3
(No Transcript)
4
Look at poverty across residence and by age and
race/ethnicity
5
(No Transcript)
6
Poverty rate ( persons) by place of residence,
2001
From Jensen, McLaughlin and Slack 2003
7
Poverty rates () by age and residence, 2001
Child poverty
8
Age distribution of the poor, 2001
Poor Children
Nonmetro
Metro
9
Poverty rates () by race/ethnicity and
residence, 2001
10
Race/ethnic distribution of the poor
Nonmetro
Metro
11
Percentage of Children in Poverty by Race/
Ethnicity, 2000
12
Poverty rates () by marital status and
residence, 2001
13
Percentage of Children in Poverty by Family Type
and Residence, 2000
14
How do we explain these substantial differences
in poverty across groups?
15
What causes poverty (economic stratification)?

• Focus today on Individual-level explanations
• Differences in human capital investments

16
Theoretical perspectives on human capital

• Human capital theoryeconomic perspective
• Status attainment theorysociological perspective
• Community influences on educational and
  occupational attainmentcommunity social capital

17
Human Capital Theory

• Workers can enhance future earnings by foregoing
  current earnings to increase their labor skills
  by investing time/ resources in
• Formal schooling
• On-the-job training (broad, firm-specific)
• Willingness to migrate

18
Human capital investments ultimately determine
work, earnings poverty
A
Human capital investments
B
Human capital stock
C
Level of productivity
Earnings
D
Poor
Not Poor

• From Beaulieu and Mulkey chapter, 1995.

19
Three critiques of human capital theory

• Inattention to why some people are better able
  than others to invest in their human capital
• Simplistic linkage between investments in human
  capital and work-related earnings
• Failure to adequately explain why human capital
  linkage to earnings varies across race/ethnic
  groups, gender, residence

20
Status attainment theorywhy are some better able
to invest in human capital

• Family background (SES) influences success in
  school and occupational aspirations and choices
• Socialization to place high value on education
• Families provide
• Financial capital
• Human capital
• Social capital

Vary across families
21
In addition to family, community can influence
human capital investments

• Local occupational opportunities
• Community norms, social networks
• Adult supervision/ interactions with children,
  mentoring
• Community-sponsored programs for youth
• Thus, we see differences in human capital
  investment across local communities and across
  metro and nonmetro areas

22
What do we know about human capital investment?

• Most common measure is educational attainment
• Human capital investments vary greatly by
  race/ethnicity and residence
• More difficult to measure job skills, worker
  productivity

23
What has happened to education (educational
attainment, test scores)?
24
(No Transcript)
25
(No Transcript)
26
(No Transcript)
27
Educational Attainment figures
28
Human capital also is based on knowledge attained
during education and training

• Some argue rural schools do a poorer job of
  preparing students, explaining lower productivity
  (and earnings) of rural workers
• Do metro and nonmetro youth differ in achievement
  test scores?

29
Mean achievement scores of twelfth graders (from
Teixeira)
30
How does educational attainment relate to poverty?
31
(No Transcript)
32
Migration and human capital

• A major factor influencing the educational
  attainment across counties or places is migration
• Migration is selectivepeople with higher levels
  of education are more likely to migrate (cross
  county boundaries)
• How does this selective migration affect
  educational attainment in nonmetro and metro areas

33
(No Transcript)
34
Human capital as a local resource

• Communities also value human capital
• Local volunteers
• Workforce that attracts new employers offering
  good jobs
• More capacity in local governance

35
The rural workforce, human capital and economic
development

• Classic argument in rural development is whether
  job quality disadvantages or lower human capital
  are responsible for lower earnings and high
  poverty in rural areas
• And what is the relationship between job quality
  and human capital? (Which comes first? What
  should a local community concentrate on?)

36
One scholars (Teixeira) argument

• Human capital in rural areas is adequate to meet
  the skills demanded by employers
• Economic development question is how do we
  upgrade the types of jobs offered in rural areas
  to encourage better-educated and skilled people
  to stay or move in?
• What is the industrial and occupational structure
  in rural areas? How different is it from that in
  metro areas?

37
Next class---we answer that last question and
focus on demand side of rewards to human capital

• The Rural Economyhow different is it?
• Readings
• Chapter 9 in FloraThe Global Economy
• Brown and Swanson, Chapter 10 (on course web
  site)
• Optional Schaefer, Ch. 14 pp. 340-344 and
  352-356.