The Heinz Journal, Volume 16, Issue 2 | Fall 2018 by The Heinz Journal

Editors in Chief Owen Stevenson Tobie Irvine

Volume 16, Issue 2 Âˇ Fall 2018 journal.heinz.cmu.edu

Childhood Poverty in Urban Environments Editors Taylor Burandt Shivalik Daga Deborah Foell-McDowell Sean Hoover Rashmeen Kaur J. Alexander Killion Brenda Mittelbuscher Alex Orozco Kevin Oshinskie Cheena Pongase Shreya Prabhu Nik Rebovich Sonia Reed Wendy Schiller Sara Shore Travis Stahl Eduardo Solomon

Ela Sehic

Evaluating Economic Impacts of Intellectual Property Box Regimes Using Econometric Methodology

Yoshio Kainosho

Racial Disparities in Death Penalty Sentencing

Kaitlyn Hendrickson College Food Insecurity in the United States: Improving Data and Data Collection Sarah Pesi

Whatâ&#x20AC;&#x2122;s Next for the Philanthropic Commitments Model? Ryan Rydzewski

Heinz Journal

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Childhood Poverty in Urban Environments

Childhood Poverty in Urban Environments Ela Sehic University of Pittsburgh – Graduate School of Public and International Affairs (GSPIA) and School of Social Work This paper aims to understand the complexities and impacts of child poverty in urban environments in the United States and argues that child poverty has long-lasting implications on individuals. These effects include, but are not limited to: education, health, and a sense of agency—all of which are necessary for success during adulthood. Specifically, this paper examines the manner in which poverty is presently defined in the United States, the housing circumstances after the Great Recession that still contribute to children’s experiences of poverty, how education outcomes are hindered by poverty, and the psychological and lifelong implications of experiencing poverty during childhood. Recommendations aimed at addressing the ongoing battle against systemic urban poverty among minority populations are presented as well.

I. Introduction In the United States, the percentage of individuals living in poverty in urban areas is 16 percent. 1 From a global perspective, poverty rates in urban regions can be up to thirty percent greater than in rural areas.2 The greatest implications for citizens living in concentrated poverty are unsafe environments, inadequate housing, health risks, and a decreased quality of life. 3Important policy considerations regarding urban poverty relate to the impacts the above mentioned issues have on children. In the United States, 21 percent of children belong to families with earnings below the federal poverty levels 4 (See Table 1 for 2018 federal poverty level earnings) and 43 percent of children belong to low-income families.5 (See Table 2 for 2018 federal low income earnings)

Alemayehu Bishaw and Kirby G. Posey, “A Comparison of Rural and Urban America: Household Income and Poverty,” United States Census Bureau, Dec 2016, https://census.gov/newsroom/blogs/randomsamplings/2016/12/a_comparison_of_rura.html. 2 Judy L. Baker, “Urban Poverty: A Global View,” The World Bank, 2008, http://documents.worldbank.org/curated/en/95451146831583 2363/pdf/430280NWP0Glob10Box327344B01PUBLIC1.pdf. 3 Ibid. 4 “Child Poverty,” National Center for Children in Poverty, 2018, http://www.nccp.org/topics/childpoverty.html. 5 “Federal TRIO Programs Current-Year Low-Income Levels,” U.S. Department of Education, 2018,

Table 1: 2018 Federal Poverty Level Earnings 6

Annual Earnings Individual

$12,140

Family of Two

$16,460

Family of Four

$25,100

Table 2: 2018 Federal Low-Income Earnings 5

Annual Earnings Individual

$12,140

Family of Two

$16,460

Family of Four

$25,100

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II. Housing Conditions A primary concern relating to urban poverty’s detrimental effects on individuals is access to

https://www2.ed.gov/about/offices/list/ope/trio/incomelevels. html. 6 “Federal Poverty Level (FPL),” Healthcare.gov, 2018, https://www.healthcare.gov/glossary/federal-poverty-levelfpl/.

Heinz Journal affordable housing. Although local and state government programs differ when it comes to definitions of affordable housing and programs in place to provide such resources to citizens, there is a growing shortage of affordable housing units across the United States. 7 As of 2013, every county in the United States has an inadequate supply of affordable housing units for extremely low-income (ELI) families, which are defined as families of four earning $12,600 to $32,800. 8 This shortage is a problem in cities which have recently grown in population size (metro-Atlanta, Dallas, Phoenix, etc.) compared to established large cities that have been receiving federal assistance for housing programs for much longer (Boston, San Francisco, New York City, etc.).9 Affordable housing became a greater issue in the past decade after many homeowners were forced to enter the renter’s market upon losing their homes in the Great Recession. 10 In addition, recent economic woes resulted in younger adults being unable to purchase homes because of large amounts of student debt, and retirees opting to rent instead of remaining in what they deem to be unnecessarily large homes. 11 As incomes have stagnated and cities continue to recover from the economic downfall, landlords—who may also feel financial pressures—have resorted to increasing rents to ensure they can cover their financial needs.12 Thus, in a housing market oversaturated with renters, the affordability of housing decreases and negatively impacts the lowest earners the most. Over a third of the ELI population are

families with children who are struggling to find affordable housing.13 Contributing to the problems associated with the increasing demand for affordable housing units are the issues stemming from a strained supply, which has been worsened under the current presidential administration.14 Up to 80 percent of affordable housing units are provided through programs assisted by the U.S. Department of Housing and Urban Development (HUD).15 However, the corporate tax cut enacted by the Trump administration reduced the value of federal programs—such as the Low-Income Housing Tax Credit (LIHTC)—designed to sustain the affordability of building and renting units below the market rate to ELI families. 16 Thus, as the short supply of affordable housing units persists, low-income citizens spend increasing percentages of their incomes on housing. This reduces families’ abilities to spend on children’s other needs—such as nutrition, medical necessities, and school services like pre-kindergarten readiness programs.17 The lack of affordable, quality housing has several other direct impacts on children. First, poor and unsafe housing conditions have detrimental effects on children’s mental well-being.18Several housing factors (including the physical quality of the living condition, instability marked by frequent moves, the degree of homeownership, and affordability) have all shown to impact the development of lowincome children.19 Among these factors, housing

13 Holder,

Ibid. Josh Leopold, Liza Getsinger, Pamela Blumenthal, Katya Abazajian, and Reed Jordan, “The Housing Affordability Gap for Extremely Low-Income Renters in 2013,” Urban Institute, 2015, https://www.urban.org/sites/default/files/publication/54106/20 00260-The-Housing-Affordability-Gap-for-Extremely-LowIncome-Renters-2013.pdf. 9 Ibid. 10 Kalugina, op. cit. 11 Sarah Holder, “For Low-Income Renters, the Affordable Housing Gap Persists,” City Lab, 2018, https://www.citylab.com/equity/2018/03/for-low-incomerenters-the-gap-in-affordable-housing-persists/555458/. 12 Pam Fessler, “Why Affordable Housing Could Become Harder to Find,” NPR, 2018, https://www.npr.org/2018/01/09/576535681/advocates-feartax-bill-will-worsen-u-s-affordable-housing-shortage.

op. cit. Fessler, op. cit. 15 Leopold, op. cit. 16 Andrew Khouri, “Affordable Housing Projects are Threatened as Tax Cuts Undermine a Source of Funding,” LA Times, 2018, http://www.latimes.com/business/la-fi-tax-lawaffordable-housing-20180309-story.html. 17 Tanvi Misra, “America's Affordable Housing Shortage, Mapped,” City Lab, 2017, https://www.citylab.com/equity/2017/03/americas-affordablehousing-shortage-mapped/518391/. 18 Rebekah Levine Coley, Tama Leventhal, Alicia Doyle Lynch, and Melissa Kull, “Relations between Housing Characteristics and the Well-Being of Low-Income Children and Adolescents,” Developmental Psychology 49, no. 9 (2013), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3766502/. 19 Ibid.

Childhood Poverty in Urban Environments quality creates the greatest disadvantages for children.20 Specifically, housing quality is correlated with increased emotional and behavioral problems and lower scores on reading and math assessments. 21 Another aspect contributing to the negative effects of a lack of affordable housing on children is the relationship between parental stress and housing. As the quality of the housing environment decreases, the stress and mental health problems experienced by parents increases, resulting in a more negative home experience for children. 22 Frequent moving caused by residential instability shows similar effects on children, with the mediating variable being maternal distress. 23 Thus, the stress caused by inadequate, unavailable, and unaffordable housing has impacts on the mental well-being of parents and children. This leaves lasting impacts on children by negatively impacting development during critical years.24 The second significant impact of unstable and inadequate housing on children is the manner in which it affects education outcomes. Unhealthy environments (like vermin and mold infestations) can impact the physical health of children. 25 Such living conditions can lead to chronic issues like asthma, a key contributor to frequent school absences.26 Residential instability stemming from a lack of home ownership and changes in the availability of affordable housing units also impact children’s school attendance. 27 In addition, the stressful home environments in which low-income families reside do not provide environments

20 Ibid. 21

Ibid. Ibid. 23 Ibid. 24 Will Schupmann, “How Housing Quality Affects Child Mental Health,” How Housing Matters, 2017, https://howhousingmatters.org/articles/housing-qualityaffects-child-mental-health/. 25 Mary Cunningham and Graham MacDonald, “Housing as a Platform for Improving Education Outcomes among LowIncome Children,” Urban Institute, 2012, https://www.urban.org/sites/default/files/publication/25331/41 2554-Housing-as-a-Platform-for-Improving-EducationOutcomes-among-Low-Income-Children.PDF. 26 Ibid. 27 Ibid. 22

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conducive to learning. 28 Because of stress and overcrowding, completing homework assignments can be problematic for children in such homes, impacting academic performance and outcomes. 29 Because housing issues significantly contribute to the continuation of intergenerational poverty in urban communities, policies aimed at addressing affordable and adequate housing needs are key−especially for ELI families with children. As discussed in the recommendations, approaches aimed at expediting the regulatory process for creating additional affordable housing units is integral in local and federal governments’ aims to address the shortage of units. In addition, mental health support programs that can be implemented in schools will be necessary to ensure low-income students have access to resources that mitigate the negative impacts of growing up in unstable living environments. Education Impacts Children growing up in urban poverty experience many impediments to their education. Because of unstable living conditions, many children are unable to complete academic years in a consistent and timely manner.30 As a result, students fall behind and often face negative consequences such as dropping out of high school and higher levels of incarceration.31 Sadly, these long-term effects are observed as early as before third grade. 32 Given that kindergarteners are the most frequently absent group (after high school students) in low-income populations, it is clear children growing up in poverty begin to face poor educational outcomes early.33 Although the high school graduation rate in the United States has steadily increased over the years, a large gap exists between the graduation rates of students classified as low-income and

Ibid. Ibid. 30 Marc Cutillo, “Poverty's Prominent Role in Absenteeism,” Education Week, 2013, https://www.edweek.org/ew/articles/2013/02/27/22cutillo.h32 .html. 31 Ibid. 32 Ibid. 33 Ibid. 29

Heinz Journal those who are middle and high-income.34 In most states, this gap is in the double digits, with the largest being 28 percent. 35 Children growing up in poverty perform worse on math and reading measures because of a lack of cognitive enhancement and support at home and problems faced at school. 36 In addition, children from low-income families are less prepared when beginning school. 37 Whereas 75 percent of children from moderate and high-income homes show signs and behaviors conveying school readiness by age five, only 48 percent of children from impoverished homes are prepared for school.38 According to the 2014 Census Bureau, children under 18 are the nation’s largest demographic living in poverty. 39 Although children only constitute 23 percent of the U.S. population, they constitute 33 percent of the country’s population living in poverty.40 Thus, students attending primary and secondary school represent the largest group facing the struggles brought upon by poverty. Along with the typical pressures of school, children living in poverty face additional circumstances that make completing high school difficult. The academic factors which lead students to drop out of school, such as inadequate grades, frequent absenteeism, and behavioral issues, are

often created by the stress of living in poverty. 41 Faced with familial issues such as unstable living conditions, food scarcity, absent parents, violence, and substance abuse, children living in poverty are five times more likely to drop out of high school— compared with students living in the highest income-earning homes.42 In addition, the neighborhoods in which students living in poverty reside greatly influence the chances of completing high school.43 Neighborhoods qualified as impoverished have high concentrations of crime, substance abuse, and lack of job prospects. 44 Within these neighborhoods, students are more likely to drop out of school and, therefore, increase the chances of their peers also dropping out. 45 Dropping out of high school is strongly associated with remaining in poverty and the continuation of cycles of disparity. Compared to individuals who graduate from college, those who drop out of high school are twice as likely to live in poverty. 46 Furthermore, students living in areas with the greatest income inequality (Louisiana, Mississippi, Georgia, and the District of Columbia) are more likely to drop out of high school than those living in areas with less income inequality. 47 These differences stem from the perception of residents of neighborhoods with greater inequality that education is not a worthwhile investment. 48 Although students show attitude shifts in college goals from ninth to eleventh grade, 49 research has shown that performance in primary school is a key

Ben Cosman, “The High School Graduation Rate Is Great, Unless You're Poor,” The Atlantic, 2014, https://www.theatlantic.com/national/archive/2014/04/thehigh-school-graduation-rate-is-great-unless-yourepoor/361321/. 35 Ibid. 36 Mary Keegan Eamon, “Effects of Poverty on Mathematics and Reading Achievement of Young Adolescents,” 2002, http://journals.sagepub.com/doi/abs/10.1177/0272431602022 001003?journalCode=jeaa. 37 Julia B. Isaacs, “Starting School at a Disadvantage: The School Readiness of Poor Children,” Brookings Institute, 2012, https://www.brookings.edu/wpcontent/uploads/2016/06/0319_school_disadvantage_isaacs.p df. 38 Ibid. 39 “How is Poverty Status Related to Age?” Center for Poverty Research University of California, Davis, 2018, https://poverty.ucdavis.edu/faq/how-poverty-status-relatedage. 40 Ibid. 34

Russell W. Rumberger, “Poverty and High School Dropouts,” American Psychological Association, 2013, http://www.apa.org/pi/ses/resources/indicator/2013/05/povert y-dropouts.aspx. 42 Ibid. 43 Ibid. 44 Ibid. 45 Ibid. 46 Jason M. Breslow, “By the Numbers: Dropping Out of High School,” Frontline, 2012, https://www.pbs.org/wgbh/frontline/article/by-the-numbersdropping-out-of-high-school/. 47 Melissa Kearney and Phillip Levine, “Income Inequality, Social Mobility, and the Decision to Drop Out of High School,” The Brookings Institution, 2016, https://www.brookings.edu/bpea-articles/income-inequalitysocial-mobility-and-the-decision-to-drop-out-of-high-school/. 48 Ibid. 49 Ibid. 41

Childhood Poverty in Urban Environments indicator of high school completion. 50 Children who cannot read proficiently by the end of the third grade are four times as likely to drop out of high school as those who can. 51 Living in poverty further disadvantages students who are already struggling in elementary school. For example, students who are unable to read proficiently by the end of third grade and are living in poverty are three times as likely to drop out of high school, compared to students not living in poverty who are also unable to read by the end of third grade. 52 Among third graders with top reading scores who have spent at least a year in poverty, 11 percent fail to graduate high school on time, compared to only two percent of top third grade readers who did not reside in poverty. 53 Thus, both time spent in poverty and reading proficiency in early elementary school are critical factors in obtaining a high school diploma. Research suggests that differences in the cognitive abilities between children living in poverty and those from higher-income families are not significant before the age of one. 54 However, noticeable differences in cognition are present by kindergarten.55 Thus, preschool serves as an important step towards obtaining an education— and to greater income equality—in adulthood. Of preschool-aged children whose families earn within the lowest fifth of incomes, only 50 percent are enrolled in preschool, the majority of which are in free programs. 56 This compares to children whose families’ earnings are within the top fifth, of whom 76 percent are enrolled in preschool. 57 Additionally, children from impoverished homes

Donald J. Hernandez, “Double Jeopardy: How Third-Grade Reading Skills and Poverty Influence High School Graduation,” The Annie E. Casey Foundation, 2012, http://www.aecf.org/m/resourcedoc/AECF-DoubleJeopardy2012-Full.pdf. 51 Ibid. 52 Ibid. 53 Ibid. 54 Elizabeth U. Cascio and Diane Whitmore Schanzenbach, “Expanding Preschool Access for Disadvantaged Children,” The Brookings Institution, 2014, https://www.brookings.edu/research/expanding-preschoolaccess-for-disadvantaged-children/. 55 Ibid. 56 Ibid. 57 Ibid. 50

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benefit the most from attending preschool.58 Children living in poverty are up to six months behind middle-class children in language and reading skills by kindergarten. 59 Thus, the behavioral skills and academic abilities acquired from attending adequate preschool programs are crucial for children living in poverty to be able to complete high school, which increases their chances of achieving higher incomes and breaking the cycle of poverty. As the following section examines, the physical and psychological implications of living in poverty as a child—especially long-term—contribute significantly to the negative education prospects and outcomes discussed. Physical and Mental Health Impacts Important concerns regarding the physical health of children growing up in urban poverty in the United States, and across the world, are the prevalence and impacts of inadequate infrastructure. The sanitation, water, and power systems in place in impoverished neighborhoods can lead to many respiratory and infectious diseases.60 This is often considered an issue in third-world nations, but the United States ranks 36th when it comes to effective water and sanitation access.61 Although there has been an increased focus on improving sanitation systems in dense areas, the rate at which populations are growing exceeds the capabilities of building efforts.62 Improper sanitation systems increase Claudio Sanchez, “Pre-K: Decades Worth of Studies, One Strong Message,” NPR Ed, 2017, https://www.npr.org/sections/ed/2017/05/03/524907739/prek-decades-worth-of-studies-one-strong-message. 59 Bruce Fuller, “Preschool is important, but it’s more important for poor children,” The Washington Post, 2014, https://www.washingtonpost.com/opinions/preschool-isimportant-but-its-more-important-for-poorchildren/2014/02/09/79ff4ab4-8e96-11e3-b22712a45d109e03_story.html. 60 Baker, op. cit. 61 Philip Alston, “Statement on Visit to the USA,” United Nations Human Rights Office of the High Commissioner, Dec 2017, http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.as px. 62 “Module 4: Unique Urban Sanitation Issues,” Unite for Sight, 2015, http://www.uniteforsight.org/urbanhealth/module4. 58

Heinz Journal mortality rates−especially for children under the age of five−and stunt growth, which affects children’s long-term cognitive and physical development.63 A second physical health concern for children in urban poor neighborhoods is safety. Indoor and outdoor crowding issues can produce hazardous conditions for children. Given that playing is critical to a child’s development, limited access to appropriate play areas increases the chances of accidents and injuries. 64 In addition, inadequate housing structures for children in poor urban environments increase the chances of injury and death because of environmental risks (such as extreme temperatures) and natural disasters (such as flooding).65 Psychological Consequences Along with physical health issues, children in impoverished urban environments face many mental health concerns as well. Given unstable housing conditions, food scarcity, and physical safety concerns, children living in urban poverty are at higher risk for distress, trauma, and are more likely to suffer from anxiety and depression. 66 Because of limited financial and medical resources, children and families in such circumstances often do not have access to the mental health services needed to properly address these issues.67 The chronic stress experienced by children growing up in impoverished conditions Günther Fink Isabel Günther and Kenneth Hill, “The effect of water and sanitation on child health: evidence from the demographic and health surveys 1986–2007,” International Journal of Epidemiology 40, no. 5 (2011), https://academic.oup.com/ije/article/40/5/1196/658066. 64 Elizabeth C. Powell, Erin J. Ambardekar, and Karen M. Sheehan, “Poor Neighborhoods: Safe Playgrounds,” Journal of Urban Health: Bulletin of the New York Academy of Medicine 82, no. 3 (2005): 403–410. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3456056/pdf/ 11524_2006_Article_414.pdf. 65 Baker, op. cit. 66 Ibid. 67 Sheila Smith, Maribel Granja, Mercedes Ekono, Taylor Robbins and Mahathi Nagarur, “Using Medicaid to Help Young Children and Parents Access Mental Health Services,” National Center for Children in Poverty, 2017, http://www.nccp.org/publications/pdf/text_1164.pdf. 63

impacts brain development such that memory and mood control are affected in a manner that makes learning more difficult.68 Poverty also impacts many facets of an individual’s mental health, including cognitive and behavioral functioning. 69 The prevalence of neurobehavioral disorders such as mental retardation, ADHD, and autism is significantly greater for individuals living in poverty, compared to middle-class individuals.70 Empirical findings suggest that the primary reason for the prevalence of such disorders among those living in poverty stems from environmental factors, including protein and micronutrient deficient diets, maternal health, toxins, and reduced sensory stimulation at an early age.71 Such problematic environmental factors directly impact the brain’s physiology. When the brain structures of children living in poverty are compared with those living in higher-income households, those in poverty show significant reductions in the hippocampus and amygdala. 72 Studies conducted with animal and human models support that these structural reductions can explain the memory problems observed among lowerincome individuals.73 In addition, environments which induce chronic stress, such as poverty, alter the prefrontal cortex, leading to significant differences in the executive functioning, language skills, cognitive reasoning, and emotion regulation of children. 74 In addition to harming neurological development, poverty greatly affects individuals psychologically. About 26 percent of individuals age 18 and older living with a serious mental illness (defined as a mental, behavioral, or Priyanka Boghani, “How Poverty Can Follow Children into Adulthood,” Frontline, 2017, https://www.pbs.org/wgbh/frontline/article/how-poverty-canfollow-children-into-adulthood/. 69 Daniel C. Marston, “Neurobehavioral Effects of Poverty,” American Psychological Association, 2013, http://www.apa.org/pi/ses/resources/indicator/2013/01/povert y-behaviors.aspx. 70 Ibid. 71 Ibid. 72 Ibid. 73 Ibid. 74 Ibid. 68

Childhood Poverty in Urban Environments emotional disorder meeting diagnostic criteria and which causes significant impairment that interferes with major life responsibilities) live in poverty. 75 During young adulthood (ages 18 to 25), the rate of serious mental illness among individuals living below, at, or above the poverty line is not significantly different. 76 However, significant differences are observed in adults (age 26 and older), with those living below the poverty line being 3.4 percentage points more likely to experience a serious mental illness than individuals living at the poverty line and 4.4 percentage points more likely than individuals living above the poverty line. 77 The fact that childhood poverty predicts impaired psychological well-being in adulthood further highlights the compounding effects of growing up in poverty.78 Among chronic illnesses (e.g. diabetes, high cholesterol, obesity, cancer, heart disease), depression shows the most disproportionate impact on those living in poverty. 79 About 31 percent of individuals living in poverty have been diagnosed with depression, compared with 15.8 percent of individuals not living in poverty. 80 For comparison, the second greatest disparity is in asthma diagnoses, which shows only a six point difference in the percentage diagnosed among those living in poverty (17.1 percent) and those not living in poverty (11 percent). 81 Studies controlling for demographic information, individual socioeconomic status (SES), stress, and trauma indicate that neighborhood poverty in an urban environment relates to more than twice the likelihood of depression as living in a high-SES

“Serious Mental Illness Among Adults Below the Poverty Line,” Substance Abuse and Mental Health Services Administration (SAMHSA), 2016, https://www.samhsa.gov/data/sites/default/files/report_2720/S potlight-2720.html. 76 Ibid. 77 Ibid. 78 Gary W. Evans, “Childhood Poverty and Adult Psychological Well-Being,” Proceedings of the National Academy of Sciences 113, no. 52 (2016): 14950. 79 Alyssa Brown, “With Poverty Comes Depression, More Than Other Illnesses,” Gallup, 2012, https://news.gallup.com/poll/158417/poverty-comesdepression-illness.aspx. 80 Ibid. 81 Ibid. 75

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neighborhood.82 This once again highlights the importance of environmental factors in mental health status in the context of poverty. Because of the negative manner in which an individual’s environment can impact the brain, children growing up in poverty have an increased risk for developing mental illnesses. The abovementioned brain structures (the hippocampus and amygdala) have been shown to have weaker connections to other brain regions in children living in poverty. 83 Such neural impairments in preschool-aged children correlate with an increased risk for clinical depression as early as age nine.84 In addition, fear and anxiety have also been found to play a role in the occurrence of clinical depression among children and adolescents with a family history of the illness. 85 Thus, the unstable environments many children living in poverty experience can severely impact their mental health. Although some cognitive deficits associated with poverty can be reversed, research does not suggest the same for weak hippocampus and amygdala connectivity. 86 Therefore, ensuring stable home environments for children living in poverty is paramount for reducing the incidence of serious mental illness in both childhood and adulthood. Poverty also impacts individuals’ self-worth. Individuals living in poverty have lower expectations about their abilities to succeed, which can affect education and career outcomes. 87 In

Sandro Galea, Jennifer Ahern, Arijit Nandi, Melissa Tracy, John Beard, David Vlahov, “Urban Neighborhood Poverty and the Incidence of Depression in a Population-Based Cohort Study,” Annals of Epidemiology 17, no. 3 (2007): 5, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2442459/pdf/ nihms24522.pdf. 83 Jim Dryden, “Poverty linked to childhood depression, changes in brain connectivity,” Washington University School of Medicine in St. Louis, 2016, https://medicine.wustl.edu/news/poverty-linked-to-childhooddepression-changes-in-brain-connectivity/. 84 Ibid. 85 Bianca Nogrady, “Anxiety, poverty contribute to depression in at-risk children,” MDedge, 2016, https://www.mdedge.com/psychiatry/article/120235/depressio n/anxiety-poverty-contribute-depression-risk-children. 86 Dryden, op. cit. 87 Dawn Foster, “How Being Poor Can Lead to a Negative Spiral of Fear and Self-Loathing,” The Guardian, 2015,

Heinz Journal addition, those living in poverty have also been shown to negatively stereotype themselves, expressing views commonly held by others that poverty indicates lower competence. 88 Just as adults are subject to stereotype threat (underperforming on tasks upon being reminded that their in-group stereotypically underperforms on the task), so are children. 89 Unfortunately, children as young as six years old show negative stereotyping behavior towards people living in poverty.90 Children as young as six years old hold beliefs that poor children perform worse academically and that poor children will only achieve less than 25 percent of their desired goals while higher-income children will achieve the majority of their goals. 91 Stereotype threat becomes even more concerning given that teachers convey similar attitudes toward children living in poverty. 92 Research indicates a significant difference in children’s actual performance on standardized tests and teachers’ perceptions of how individual students will perform.93 Teachers perceive children from lowincome homes to be less capable of performing well in reading and math, which may distort children’s daily experience in the classroom and thus their overall learning experience. 94 Furthermore, teachers also hold gender biases and thus perceive female students to be less proficient in math.95 Therefore, female students living in poverty may be at the greatest risk for stereotype threat and in need of additional support and resources in order to succeed. IV. Implications https://www.theguardian.com/society/2015/jun/30/povertynegative-spiral-fear-self-loathing. 88 Ibid. 89 Alex Fradera, “Poverty Shapes How Children Think About Themselves,” The British Psychological Society, 2015, https://digest.bps.org.uk/2015/05/20/poverty-shapes-howchildren-think-about-themselves/. 90 Ibid. 91 Ibid. 92 Richard Adams, “Children from Poorer Families Perceived by Teachers as Less Able, Says Study,” The Guardian, 2015, https://www.theguardian.com/education/2015/jun/09/teachers -poorer-children-education-primary-school. 93 Ibid. 94 Ibid. 95 Ibid.

The lower rates of school readiness and graduation for individuals from low-income neighborhoods have lifelong and generational implications. A chain reaction exists between school readiness and earning potential, with students who are ready for school tending to perform better in elementary school, leading to lower high school dropout rates and increased earning potential. 96 Furthermore, the amount of time spent in poverty as a child correlates with the risk of adult poverty. Figure 1 shows the relationship between years spent in poverty as a child and the likelihood of experiencing poverty as an adult. 97 Figure 1: Likelihood of Adulthood Poverty BAsed on Years Spent in Poverty as a Child98

As Figure 1 illustrates, when children do not experience poverty while growing up, their chances of poverty from ages 20 to 25 are five percent.99 However, if a child experiences poverty for one to seven years of childhood, their chances of poverty at ages 20 to 25 increase to 13 percent, and spending eight to fourteen years in poverty as a child increases their chances of poverty as an adult up to 46 percent. 100 Growing up in poverty has various negative consequences during adulthood. First, experiencing poverty during childhood reduces the sense of control individuals feel over situations as adults.101 This in turn impacts the adults’ actions 96

Isaacs, op. cit. op. cit. 98 Ibid 99 Ibid. 100 Ibid. 101 Chiraag Mittal and Vladas Griskevicius, “Growing up Poor Affects Adults' Sense of Control, Impulsiveness when 97 Boghani,

Childhood Poverty in Urban Environments related to impulsiveness and perseverance. 102 For instance, when subjects in research studies are primed with photographs depicting poor economic circumstances (compared with neutral images such as furniture), those from low socioeconomic households are more likely to respond to selfreported measures in a manner which indicates perceptions of lacking control. 103 Furthermore, when primed with the same photographs, individuals who have experienced poverty during childhood have a harder time postponing rewards in order to receive smaller amounts of money more immediately, versus delaying the reward in order to receive a larger sum in the future. 104 This suggests lower impulse control in adults who were raised in poverty. 105 Those raised in poverty are also more likely to give up on cognitive tasks (such as puzzles) after having to recall experiences of financial hardship.106 Even when controlling for socioeconomic status in adulthood, these differences are still apparent. Thus, poverty experienced during childhood may hinder potential progress during adulthood regardless of change in socioeconomic status. Longitudinal studies support this notion, indicating that childhood poverty experienced at the individual or family level predicts lifetime PostTraumatic Stress Disorder (PTSD), incarceration rates, and academic achievement deficits in adulthood.107 All three factors were also significantly predicted by childhood neighborhood poverty as well.108 When examining the extent to Faced with Economic Uncertainty, Research Finds,” American Psychological Association, 2014, http://www.apa.org/news/press/releases/2014/08/growing-uppoor.aspx. 102Ibid 103 Ibid. 104 Ibid. 105 Ibid. 106 Ibid. 107 Valentina Nikulina, Cathy Spatz Widom, and Sally Czaja, “The Role of Childhood Neglect and Childhood Poverty in Predicting Mental Health, Academic Achievement and Crime in Adulthood,” American Journal of Community Psychology 48, no. 3-4 (2011), 315, https://link.springer.com/content/pdf/10.1007%2Fs10464010-9385-y.pdf. 108 Ibid.

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which neglect, family poverty, and neighborhood poverty during childhood serve as significant predictors of adult outcomes while controlling for the other two variables, childhood neglect and childhood family poverty were both found to have negative effects on lifetime PTSD and crime, whereas childhood family poverty is the only significant predictor of Major Depressive Disorder (MDD).109 In relation to academic achievement, all three childhood variables (neglect, family poverty and neighborhood poverty) are unique significant predictors.110 These findings highlight the importance of support and stability at the individual or family level for children growing up in poverty. Although addressing concentrated poverty at the neighborhood level is an important policy concern (especially for academic advancement), ensuring positive adult outcomes for children living in poverty requires addressing the circumstances which lead to increased neglect and financial struggles experienced by family units.111 Recent findings about the link between poverty and suicidality highlight the need for added support resources for children and adults living in poverty. Significant positive correlations exist between county-level suicide rates and poverty rates.112 This relationship is consistent for both males and females in all adult age groups . 113 Importantly, unemployment rates do not show a similar significant relationship to suicidality. 114 However, poverty serves as a mediating variable for the relationship between unemployment and suicide rates.115 These findings highlight the 109

Ibid. Ibid. 111 Ibid. 112 “Studying the Link Between Poverty and Suicides,” UCLA Luskin School of Public Affairs, 2016, https://luskin.ucla.edu/studying-link-poverty-suicides/. 113 William C. Kerr et. al., “Economic Recession, Alcohol, and Suicide Rates: Comparative Effects of Poverty, Foreclosure, and Job Loss,” American Journal of Preventative Medicine 52, no. 4 (2017), 471, https://ac.elscdn.com/S0749379716304615/1-s2.0-S0749379716304615main.pdf?_tid=c222727d-846e-41b9-b377e1545481b524&acdnat=1533118914_ca1f46fc6eea8944cf1cc e3b1803eddd. 114 Ibid, 472. 115 Ibid, 473. 110

Heinz Journal importance of policies aimed at alleviating poverty and providing beneficial support programs to target the circumstances that perpetuate poverty— such as unemployment. 116 The dire need to address the harrowing outcomes brought upon by poverty is even more evident when the implications for children in poverty are considered. In both male and female children ages five to twelve, the suicide rate among black children is twice as high as for white children, according to data from the Centers for Disease Control and Prevention (CDC). 117 Although information about the children’s socioeconomic status was not available, researchers conclude that the primary factors that contribute to such a discrepancy are a lack of family and social support systems and isolation resulting from an absence of neighborhood playtime. 118 Given that minorities constitute the largest percentage of low-income families in urban environments (27 percent black alone, 24.3 percent Hispanic or Latino, 19.9 percent two or more races, 26.9 percent American Indian and Alaskan native alone, 12.6 percent Asian alone, 20.8 percent Native Hawaiian or Other Pacific Islander alone, 26.5 percent some other race alone versus 13 percent for white alone) 119 and that these minorities are often living in concentrated poverty that permeates all corners of their communities, 120 addressing the discrepancy in child suicidality may be closely linked to addressing the living conditions for children living in poverty.

Recommendations 116

Ibid. Amy Ellis Nutt, “Suicide Rates for Black Children Twice that of White Children, New Data Show,” The Washington Post, 2018, https://www.washingtonpost.com/news/to-yourhealth/wp/2018/05/21/suicide-rates-for-black-children-twicethat-of-white-children-new-datashow/?noredirect=on&utm_term=.80a3cdc4da4e. 118 Ibid. 119 Bishaw, op.cit. 120 Emily Badger, “Black poverty differs from white poverty,” The Washington Post, 2015, https://www.washingtonpost.com/news/wonk/wp/2015/08/12/ black-poverty-differs-from-whitepoverty/?noredirect=on&utm_term=.b7e948b73148. 117

The proposed recommendations contribute to ongoing attempts to reduce poverty levels in the United States and to alleviate the impacts of living in poverty. Because of time and space constraints and the scope of the issue at hand, specific recommendations center around the research presented. Housing Policies First, in order to improve the lives of children growing up in poverty, addressing a primary need such as housing is crucial. A safe and secure environment is important for children to develop their physical and psychological health, in addition to their ability to grow academically. Given the shortage of affordable housing units, more states should adopt policies which expedite the review of affordable housing unit construction.121 This encourages increased supply of affordable housing units to meet existing and growing demand. In addition, greater oversight of federal guidelines would ensure satisfaction of minimum expectations for the percentage of mixed-income and low-income units required based on population needs and reported low-income populations. Given that accurate figures on populations in poverty are difficult to assemble because many impoverished individuals do not have stable reporting addresses or places of employment, local governments will need to work more closely with appropriate organizations (e.g. homeless shelters and nonprofits) to accurately assess a city’s growing affordable housing needs. In addition, greater efforts to collect data on the circumstances of short and long-term poverty will be essential to understanding the root causes in specific urban environments. This will contribute predicting capabilities that better allow communities to meet housing needs in times of growing economic crises, such as the early months and years of the Great Recession. To continue addressing the affordable housing needs of low-income families, discussions and Arthur C. Nelson, “Top Ten State and Local Strategies to Increase Affordable Housing Supply,” Housing Facts and Findings 5, no. 1 (2003), https://communitywealth.org/sites/clone.communitywealth.org/files/downloads/article-nelson.pdf. 121

Childhood Poverty in Urban Environments programs centered on encouraging middle and high-income individuals to opt for home ownership instead of oversaturating the rental market should be considered as well. The Great Recession significantly impacted confidence and trust in the housing market. Although the economy has improved in recent years, the lingering hesitation to finance homes must be addressed with greater organization. A portion of renters will remain necessary to accrue market-value rental prices in mixed-income developments. However, local, state, and the national government will need to ensure that large portions of units designated for low-income citizens remain affordable. Otherwise, if the demand for rental units continues to grow from middle and high-income individuals, the shortage of affordable housing units will continue to increase as the cost of publicly-subsidized housing becomes unattainable. 122 By ensuring affordable housing, municipalities can stabilize living conditions for children and parents living in urban poverty. Instead of sacrificing funds that should go towards their children’s nutrition and schooling needs, low-income parents should be guaranteed that a reasonable portion of wages earned through low-paying jobs will be sufficient to cover their housing costs.

Familial Support Policies Policies are also necessary to target the support and resources parents of low-income children need in order to break cycles of poverty. By addressing the affordable housing issue, ideally more of a family’s financial resources will be available for children’s mental health and medical needs. This in turn allows parents to better fulfill their obligations in a manner that secures their child’s success. An important step toward assisting parents in lowincome families involves ensuring that parents have “functional literacy,” which has been shown

Joe Cortright, “Why Is 'Affordable' Housing So Expensive to Build?,” CityLab, 2017, https://www.citylab.com/equity/2017/10/why-is-affordablehousing-so-expensive-to-build/543399/. 122

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to grant access to higher-paying job markets.123 Research shows that simply scoring within the middle category of the National Adult Literacy Survey (NALS) results in significant reductions in the percentage of individuals working low-wage jobs.124 For instance, of the 65 percent of individuals who scored within the NALS middle category or higher, only about four percent of men and seven percent of women worked low-income jobs and remained at the poverty level. 125 One approach to increasing adult literacy rates would be to institute NALS training protocols as a requirement in CHOICE Neighborhood grant applications. Thus, each organization that is awarded one of these grants would be required to provide appropriate learning materials and education personnel to all adults who would reside in the planned communities. Based on the above results, the organizations would just need to ensure that the adults pass with at least a score in the middle category on the literacy test. If such a policy were implemented, data could be collected from each grant-receiving neighborhood on longitudinal income and career outcomes of participating adults in order to lend further support for the implementation of such programs. A second necessary step for assisting parents is to provide market-relevant skills trainings. 126 This ensures that adults needing to provide for their children remain employable and further gain access to better-paying jobs. One approach would be for community economic and redevelopment organizations to partner with businesses that open in redeveloped areas. Similar to the literacy programs mentioned above, redevelopment organizations can segment a portion of grants they receive for basic skills training. The organizations can guarantee to businesses that hired employees

Robert I. Lerman and Felicity Skidmore, “Helping LowWage Workers: Policies for the Future,” Urban Institute, 1999, https://www.dol.gov/oasam/programs/history/herman/reports/ futurework/conference/low-wage.htm. 124 Ibid. 125 Ibid. 126 Ibid. 123

Heinz Journal will have certain basic skills, and employers can then provide them more specialized training. 127 Anticipated Outcomes of the Policy Recommendations The proposed policies address both short-term and systemic poverty in urban neighborhoods. Focusing on housing needs emphasizes the stability necessary for healthy cognitive, emotional, and educational development among children living in low-income neighborhoods. This measure will most profoundly affect school outcomes, with the intent being an increase in attendance and grade completion rates and improvement in reading and math test scores. Policies addressing educational shortcomings enable the percentages of poverty, crime, and unemployment to decrease with each cohort of students as they enter adulthood. In addition, assurance of affordable housing would enable parents to spend financial resources on their children’s needs, instead of a majority of the income being spent on rising rent costs. To solidify students’ chances of success, efforts should also be taken to increase parents’ abilities to provide resources and support toward their children’s successes. By focusing on literacy and skills trainings that apply to the workforce, parents will be able to shift from working low-wage, lowskill jobs to better-paying skilled jobs that provide the income necessary for the family to earn above the poverty threshold. Thus, escaping the poverty trap will require a twopronged approach supporting both children and parents. With the necessary economic and parental support, children will have a much higher chance of graduating high school. This will improve their job prospects as they enter adulthood and reduce their likelihood of having to battle poverty when starting their own families. The parents’ improved prospects will also reduce the inequality they experience and allow for more financial and emotional capacities to be focused on parenting— instead of just on surviving poverty. Impacts on Minorities 127

Ibid.

The proposed policies primarily aim to improve living conditions and life trajectories for minority populations, given the high minority representation in low-income communities. The policies recommended specifically target minority urban poverty because, as studies show, there are differences between the poverty experienced by white and black citizens in the United States. 128 Across the most populated cities in America, the number of black Americans living in concentrated poverty is up to ten times greater than white individuals.129 In addition, black poverty is pervasive, encompassing entire neighborhoods and conveying a sociological viewpoint that poverty and the minorities living in it have been sequestered to specific neighborhoods in cities. 130 In addition to the concern around the extent of minority poverty in urban areas, the systematic tolerance of minority poverty by some makes the need for targeted efforts even greater. For instance, similar to the above policy recommendation regarding affordable housing requirements, some local and state governments may outright choose to disregard the problem. When municipalities in Illinois were requested to submit proposals for addressing their low levels of affordable housing options, 59 percent (or 40 out of 68) did not submit proposals. 131 Unfortunately, organizations such as the Illinois Housing Development Authority cannot mandate that municipalities submit plans for or provide affordable housing. 132 Thus, the importance of the federal government passing legislation that requires appropriate local government participation in such measures becomes even more clear. And given the extent of the issues impacting those living in urban poverty, greater efforts will eventually be needed from private organizations as well.

128

Badger, op. cit. Ibid. 130 Ibid. 131 Karen Berkowitz, “Many towns snub state's affordable housing mandate,” Chicago Tribune, 2015, http://www.chicagotribune.com/suburbs/northbrook/news/cthpn-suburbs-affordable-housing-mandate-tl-0813-20150807story.html. 132 Ibid. 129

Childhood Poverty in Urban Environments Similarly, it has long been noted that segregation efforts which prevent minorities from having access to employment entrap these individuals in poverty.133 Thus, the patterns that emerge in urban environments when it comes to neighborhood poverty are not a product of the manner in which cities evolve but instead are created by human behavior and systems put in place.134 Although not all cities and communities may feel compelled to address these issues, the policies recommended emphasize the need to target the underlying issues that create urban poverty in neighborhoods−especially neighborhoods with predominantly minority populations. V. In Summary Given similar patterns of urban poverty across various cities in the United States and the world, the recommended policies propose a two-part approach to bettering circumstances for individuals entrapped in long-term cycles of poverty. The primary recommendation involves encouraging local and national governments to secure proportions of affordable housing units that can be offered at levels which more closely match citizens’ needs. The second is to provide education services to adults (especially to adults with children) that better enable them to obtain higherpaying jobs. Improving financial and living prospects for cohort after cohort will hopefully improve conditions for their children and future generations. Thus, the systematic actions that have created the majority minority poor urban environments in the United States can, with time, be mitigated.

William Julius Wilson, “The New Urban Poverty and the Problem of Race,” (lecture, The Tanner Lectures on Human Values at the University of Michigan, Ann Arbor, Michigan, October 22-23, 1993), https://tannerlectures.utah.edu/_documents/a-toz/w/Wilson95.pdf. 134 Ibid. 133

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Heinz Journal

Evaluating Economic Impacts of Intellectual Property Box Regimes Using Econometric Methodology Yoshio Kainosho H. John Heinz III College of Information Systems and Public Policy Governments worldwide share the consensus that innovation is a key component of economic growth. To encourage domestic innovation, they frequently adopt intellectual property box regimes, a type of recent tax policy that lowers the corporate income tax rate on income derived from intellectual property-related products or services. However, these policies have been accused of encouraging the transfer of intellectual properties rather than precipitating economic activities which, in turn, results in revenue loss for nations that adopt them. To regulate the harmful characteristics of intellectual property box regimes, the Organisation for Economic Co-operation and Development (OECD) recently began requiring business entities to conduct substantial activity in a country if they seek tax benefits there. This paper evaluates the economic impact of intellectual property box regimes by comparing the levels of private investment in research and development within the relevant economies before and after the policy enactment. The empirical analysis reveals no evidence that these policies are effective at enhancing real economic activities even when they include the previously mentioned substantial activity requirement.

I. Introduction Under the widespread consensus that innovation is a key factor in economic growth, governments worldwide have adopted various policy interventions to promote private research and development (R&D), encourage innovation, and stimulate economic growth. 135 The existence of intellectual property (IP) box regimes as a new form of R&D tax incentive has raised questions regarding the effectiveness of tax policies in achieving economic growth. IP box regimes, so called because of a box to tick on the tax form when businesses apply it, are a relatively new type of tax break that lowers corporate income tax (CIT) rates on income erated from IP.136

135

Organisation for Economic Cooperation and Development. The Innovation Imperative: Contributing to Productivity, Growth and Well-Being, (Paris, OECD Publishing, 2015): 3, http://dx.doi.org/10.1787/9789264239814-en. 136 Robert Atkinson and Scott Andes, Patent Boxes: Innovation in Tax Policy and Tax Policy for Innovation, (Washington, DC: Information Technology & Innovation Foundation, 2011): 1,

Common justifications for such policy are the necessity of retaining tax revenues by attracting IP ownership, which is globally mobile, and the likelihood of spurring innovative domestic activities. For example, Her Majesty’s Treasury of the United Kingdom announced that GlaxoSmithKline invested £500 million and created 1,000 jobs in the UK following the enactment of its IP box regime. 137 There is a concern, however, that IP box regimes function as a “race to the bottom” and lead to worldwide losses of CIT revenues because the introduction of one IP box regime may induce introductions of others. Even if governments introduce others IP box regimes as countermeasures to detain IPs, “the lower rate of tax more than offsets the higher number of patents”. 138 A recent study https://itif.org/publications/2011/10/04/patent-boxesinnovation-tax-policy-and-tax-policy-innovation. 137 Her Majesty’s Treasury, “David Gauke's Speech to the Securities Industry Conference,” HM Treasury, last modified October 3, 2014, https://www.gov.uk/government/speeches/david-gaukesspeech-to-the-securities-industry-conference. 138 Rachel Griffith and Helen Miller, “Patent Boxes: An innovative way to race to the bottom?,” VOX, CEPR

Intellectual Property Box Regimes estimates that the worldwide CIT revenue losses due to aggressive tax planning mainly conducted by multinational enterprises (MNEs) are US$ 100 to 240 billion annually, though not all are attributed to the use of IP box regimes. 139 In order to alleviate these side effects, in 2015, the Organization for Economic Co-operation and Development (OECD) member and associate states reached consensus in 2015 on a substantial activity requirement, which allows countries to provide the tax benefits of an IP box only to businesses that actually engage in R&D activities and incur related expenditures. 140 This requirement is intended to prevent the transfer of mobile properties such as patents only for tax purposes and set deadlines for member and associate countries to abolish harmful IP box regimes. A micro-simulation model of the past research supports this consensus, suggesting that IP boxes would decrease the revenue for all governments engaging in this race to the bottom.141 In accordance with the 2015 OECD consensus, all participating countries are required to close their respective IP box regimes by June 30, 2021. 142 Many governments have changed course to adopt new IP box regimes that abide by the substantial activity requirement.

Policy Portal, 2011, https://voxeu.org/article/patent-boxesinnovative-way-race-bottom. 139 Organisation for Economic Cooperation and Development, Measuring and Monitoring BEPS, Action 11 - 2015 Final Report, (Paris: OECD Publishing, 2015), 102, http://dx.doi.org/10.1787/9789264241343-en. 140 Organisation for Economic Cooperation and Development, Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, (Paris: OECD Publishing, 2015), 24–36, http://dx.doi.org/10.1787/9789264241190-en. 141 Rachel Griffith, Helen Miller and Martin O’Connell, “Ownership of intellectual property and corporate taxation,” Journal of Public Economics, Vol. 112 (2014): 12–23. 142 Organisation for Economic Cooperation and Development, Action 5: Agreement on Modified Nexus Approach for IP Regimes, (Paris: OECD Publishing, 2015): 4–5, https://www.oecd.org/ctp/beps-action-5-agreementon-modified-nexus-approach-for-ip-regimes.pdf.

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To support the introduction and continuation of IP box regimes, there have been efforts to reveal the economic impact of IP boxes. They have failed to reach a conclusion, however, about the effectiveness of these regimes as innovation drivers. Most of the previous research focuses on the number of domestic patent applications before and after the IP box adoptions, which does not necessarily represent the amount of real innovation occurring. The International Monetary Fund (IMF) evaluated the level of private R&D expenditures, before and after the introduction of IP box regimes, amongst several developed countries. 143 The study indicates a positive effect on R&D expenditures in Belgium and the Netherlands, two countries that appear to follow the substantial activity requirement. Another study, however, found no evidence of additional R&D investments in Belgium. 144 Consequently, there is scarce evidence to support the effectiveness of IP box regimes, even under the substantial activity requirement, in spurring innovative activities. This paper uses the fixed effects model (FEM) and the eventstudy of Econometrics to correlate the existence of IP boxes and the amount of real economic activity by evaluating the changes in business enterprise R&D expenditure after adoption of these regimes, based on information extracted from a public database maintained by the OECD. The outcomes cast doubt on whether IP box regimes, even if they follow the substantial activity requirement, function as a useful measure to enhance economic growth. This paper starts with Development of IP Box Regimes and Regulatory Frameworks to provide historical context about how IP box regimes and other preferential tax incentives, as 143

International Monetary Fund, Fiscal Monitor - Acting Now, Acting Together: Fiscal Policies for Innovation and Growth (Chapter 2), (Washington, DC: International Monetary Fund, 2016): 52–53, https://www.imf.org/en/Publications/FM/Issues/2016/12/31 /Acting-Now-Acting-Together. 144 Michel Dumont, “The impact of subsidies and fiscal incentives on corporate R&D expenditures in Belgium (2001-2009),” Reflets et perspectives de la vie économique, no. 1 (2013): 69–91.

Heinz Journal well as the accompanying regulatory frameworks, have evolved. Economic Rationales and Policy Designs explores the justifications for IP box regimes and categorizes various features of these policies. This section also covers the theory and past research that specifies unsolved problems in this area. Empirical Analysis covers the hypothesis setting and the econometric modeling within this paper. Conclusion clearly evinces what the study revealed and the limitations to be considered. I. Development of IP Box Regimes and Regulatory Frameworks Pre-IP Box Regime Period Revenue losses and economic distortions generated by the churn of mobile business activities were a long-standing concern amongst governments worldwide. Tax havens and preferential tax regimes have allowed global businesses to reduce their tax burden and have caused harm to economies by distorting financial and real investment flows. 145 In the late 1990s, the Member States of the EU began discussions on this issue to identify key areas where coordinated actions were needed. In 1997, the European Council and the representatives of the Member States set out the Code of Conduct for business taxation, which identified three areas that resulted in excessive revenue losses: business taxation, taxation of savings income, and the withholding of taxes on both crossborder interest and royalty payments between companies.146 This Code, though not legally binding, was a political commitment by the signatories to reform their existing tax measures that constituted harmful tax competitions and to

refrain from introducing new ones. The Code specified a list of criteria to identify harmful tax measures, such as the granting of certain specific tax benefits only to non-residents and the bestowing of these benefits in the absence of any real economic activity. The Code also established the Code of Conduct Group, which started assessing the tax regimes of Member States and associated territories in line with the relevant criteria and published a report that identified 66 tax regimes with potentially harmful features. 147 Those jurisdictions were required to reform or replace the features to meet the agreed-upon criteria. Group members decided to continue monitoring harmful tax measures and developed strategies to improve the effectiveness of the Code of Conduct by investigating non-member countries. The work of this Group continues today. In 1998, concurrently with the policy discussion of the European Commission, the OECD published the report Harmful Tax Competition: An Emerging Global Issue. The report’s intent was to develop measures to counter harmful tax practices especially concerning mobile activities, including the provision of intangibles. 148 It was intended to secure the function of tax systems by identifying preferential tax regimes that applied to mobile business activities, unfairly eroded the tax bases of other countries, and potentially distorted the location of capital and services. The report also set out the list of criteria that identified a harmful preferential tax regime. Examples include no or low effective tax rates on income from mobile business activities, the exclusion of domestic taxpayers from the tax advantage, and the lack of encouragement of any substantial economic activities. As a monitoring body, the OECD established the Forum on Harmful Tax Practices (FHTP), which worked to identify harmful tax practices in OECD member countries, tax havens, and even non-OECD

145

Organisation for Economic Cooperation and Development, Harmful Tax Competition: An Emerging Global Issue (Paris: OECD Publishing, 1998): 13–18, https://www.oecd-ilibrary.org/taxation/harmful-taxcompetition_9789264162945-en. 146 European Commission, “Conclusions of the ECOFIN Council Meeting,” Official Journal of the European Commission, 98/C 2/01(1997).

Council of the European Union, “Report from: Code of Conduct Group (Business Taxation) to ECOFIN Council,” Doc. SN 4901/99, 29 November 1999, 5–11, https://ec.europa.eu/taxation_customs/sites/taxation/files/do cs/body/primarolo_en.pdf. 148 Organisation for Economic Cooperation and Development, “Harmful Tax Competition,” 7. 147

Intellectual Property Box Regimes countries. The FHTP published a series of progress reports during the 2000s and the number of harmful preferential tax regimes decreased under its political pressures. Expansion of IP Box Regimes and the OECD’s BEPS Project Ireland pioneered the IP box regime during the 1970s, but such regimes achieved much greater popularity in the early 2000s following the effect of regulatory frameworks on harmful tax competitions as described above. By 2015, more than ten European states had introduced an IP box regime.149 For example, The UK’s Finance Act 2012 added a new part 8A to Corporation Tax Act 2010, which declared “any relevant IP profits of a trade of the company for an accounting period for which it is a qualifying company are chargeable at a lower rate of corporation tax.” Such provisions enabled both domestic and multinational companies to receive tax benefits on certain parts of their profits. The UK government revealed that more than one thousand companies claimed tax relief under its IP box with a total value of £651.9 million from 2014 to 2015.150 The past EU and OECD frameworks could not properly regulate these regimes because most IP boxes offered tax advantages to both domestic and multinational companies. Concurrently with the expansion of IP box regimes, the adoption of fiscal stimulus policies following the financial crisis in 2008 made governments focus on revenue losses due to base erosion and profit shifting (BEPS) activities by MNEs. One estimate suggested the CIT revenue losses worldwide were US$ 100 to 240 billion

Lisa Evers et al., “Intellectual property box regimes: Effective Tax Rates and Tax Policy Considerations,” International Tax and Public Finance, Vol. 22 (2015): 502–530. 150 Her Majesty’s Revenue & Customs, Statistics on Uptake of the Patent Box, (London: HM Revenue & Customs, 2017): 5–7, https://assets.publishing.service.gov.uk/government/upload s/system/uploads/attachment_data/file/657848/Patent_Box_ Statistics_2014-15.pdf. 149

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annually.151 In 2013, with the political support of the G20 leaders, the OECD and G20 member countries jointly announced a project to develop a comprehensive package of tax policy measures to tackle BEPS. 152 The project was comprised of a wide range of proposals to address the defects of the domestic and international tax policies that made it possible for MNEs to conduct aggressive tax planning. Amongst 15 actions, Action 5 focused on countering new types of harmful preferential tax regimes and reemphasized the importance of substantial activity being conducted if by firms that gain preferential tax treatment in the BEPS context. These countermeasures against harmful preferential tax regimes started to draw worldwide attention. In October 2015, the OECD published the final report relating to Action 5, Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance.153 The report identified the “nexus approach” as a minimum standard which all participating countries needed to meet. The nexus approach treats expenditures as a proxy for substantial activities and ensures that taxpayers can only benefit from tax breaks in a country where they engage in R&D activities and thereby incur expenditures. The rationale of the requirement comes from the idea that IP boxes should be solely designed to enhance innovative activities and foster economic growth. The report listed IP box regimes that seemed to be inconsistent, in whole or in part, with the nexus approach. It also set up the schedule for member countries to replace or abolish their incompatible IP boxes: after June 30, 2016, no new entrants will be permitted to any IP box regimes that are not nexus-compliant, and the latest possible 151

Organisation for Economic Cooperation and Development, Measuring and Monitoring BEPS, Action 11, 102. 152 Organisation for Economic Cooperation and Development, Action Plan on Base Erosion and Profit Shifting, (Paris: OECD Publishing, 2013), http://dx.doi.org/10.1787/9789264202719-en. 153 Organisation for Economic Cooperation and Development, Countering Harmful Tax Practices More Effectively.

Heinz Journal abolition date of all non-compliant regimes will be June 30, 2021. The FHTP started working as a unit to monitor IP box regimes and published a progress report on Action 5, which evaluated the final status of suspicious IP box regimes, in October 2017.154 Most countries have amended or abolished their old IP box regimes, and nexus-compliant IP boxes are becoming mainstream in the post-BEPS era. I.

Economic Designs

Rationales

and

Policy

As long as nations follow the nexus approach, it may no longer be practical for them to achieve revenue increases through the transfer of mobile properties. Rather, the focus of IP box regimes will change how nations can enhance actual innovative activities such as R&D investment and job creation. The following sections identify the economic rationales for, and the possible structure of, IP boxes. Market Failure and Measures to Promote R&D Governments support R&D to encourage investments with the knowledge that these investments will result in innovations that will eventually benefit society. 155 Although private companies can partially rely on the science and ideas originating from the public sector, there are reasons for governments to provide public support to private R&D. Most often, governments support private firms to correct market failures such as: ● The difficulties firms face in receiving full return on their investment. The resulting knowledge spills over to other firms or individuals, to the benefit of society. However, firms do not derive 154

●

full financial gain from this benefit. This leads to underinvestment in R&D relative to a socially optimal level. The difficulties firms face in securing external financing. The often intangible value of R&D, as well as asymmetric information between firms and lenders, leads to increased risk for lenders which causes them to underinvest relative to the optimal level.

Organisation for Economic Cooperation and Development, Harmful Tax Practices - 2017 Progress Report on Preferential Regimes: Inclusive Framework on BEPS: Action 5,” (Paris: OECD Publishing, 2017): 15–22, http://dx.doi.org/10.1787/9789264283954-en. 155 Organisation for Economic Cooperation and Development, R&D Tax Incentives: Evidence on design, incidence and impacts, (Paris: OECD Publishing, 2016), 6, http://dx.doi.org/10.1787/5jlr8fldqk7j-en.

Public intervention is supported as a means to overcome these market failures.156 The balance between direct grants and indirect tax incentives as support for R&D varies depending on economic conditions. Governments can use direct grants to target specific projects that will entail high social return, but their decisions may be affected by the political influence of specific industries. Furthermore, the selection process can cause significant costs if it aims to provide effective targeting. On the contrary, tax incentives are market-based instruments that leave the choice of how to conduct and pursue R&D programs in the hands of the private sector. Also, direct subsidies are subject to ceilings according to the international rules of the World Trade Organization and the European Commission, but indirect supports are not if the tax relief does not favor any specific firms or sectors.157 Consequently, developed countries have favored tax incentives over direct grants as a means to enhance innovation. The design of R&D tax incentives varies considerably across countries. One key aspect of such incentives is whether they are linked to current expenditure on R&D or to future income generated from the developed products and services.158 Expenditure-based tax incentives, such as tax credits and accelerated or enhanced 156

Ibid., 7. Organisation for Economic Cooperation and Development, Tax incentives for R&D and innovation, (Paris: OECD Publishing, 2014): 164, http://dx.doi.org/10.1787/sti_outlook-2014-18-en. 158 Organisation for Economic Cooperation and Development, Fiscal incentives for R&D and innovation in a diverse world, (Paris: OECD Publishing, 2016): 12, http://dx.doi.org/10.1787/5jlr9stckfs0-en. 157

Intellectual Property Box Regimes depreciation for R&D capital costs, allow private firms to reduce their most recent CIT burdens and encourage them to invest more in R&D activities. This type of tax treatment is common. As of 2017, 30 of the 35 OECD member countries and 21 of 28 EU Member States provide tax relief on R&D expenditures.159 Also, an increasing number of countries have introduced income-based tax incentives, usually in addition to the traditional expenditure-based tax incentives, to further spur innovative activities. Conventional CIT is commonly criticized for having a distorting effect on investments, discouraging investments in physical capital and other assets, relative to neutral corporate tax systems with a different tax base.160 Therefore, reducing the statutory CIT rate is believed to be one of the solutions to alleviate the distortion. Policymakers, however, prefer targeted tax relief such as an IP box to a general reduction of the statutory CIT rate because it incurs fewer revenue losses. It is also an attractive pro-growth strategy for governments encouraging private firms to conduct R&D activities, because it purportedly promotes innovation and economic growth. Therefore, many governments have introduced IP box regimes to overcome market failures and further promote business R&D. IP Box Structures and Substantial Activity Requirement The structure of IP box regimes varies across nations in an effort to provide a more attractive tax environment for private companies than other IP box regimes do, because one of the original purposes of these preferential tax regimes was to attract mobile activities at the expense of tax revenues of one’s own or other 159

Organisation for Economic Cooperation and Development, OECD Review of National R&D Tax Incentives and Estimates of R&D Tax Subsidy Rates, 2017 (Paris: OECD Publishing, 2018): 6–8, http://www.oecd.org/sti/rd-tax-stats-design-subsidy.pdf. 160 Organisation for Economic Cooperation and Development, Taxation and Innovation, (Paris: OECD Publishing, 2011): 16, http://dx.doi.org/10.1787/5kg3h0sf1336-en.

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countries. Especially important are the design of qualifying IP and qualifying income, which characterize the attractiveness of each IP box regime and are the focus of the BEPS project. The first step is to define qualifying IPs that IP box regimes can scope the limitation of R&D tax incentives. Most of the regimes cover income generated from patents and certain IP with industrial application. But some others have a broader definition of qualifying IP including copyrights, trademarks, etc. If a country seeks to attract IP worldwide and eventually increase tax revenues, it will take a more comprehensive definition of qualifying IP. 161 Also, there is the question of whether IP should be self-developed or can be acquired. In general, IP boxes apply only to value added by the taxpayers, who need to develop the IP further if they purchase it from other entities.162 In some regimes, however, firms can outsource to other business entities and do not need to conduct R&D themselves. Finally, whether only domestically developed IP is applicable or not is another important aspect, though in line with the Treaty on the Functioning of the European Union. Therefore, the scope of qualifying IP varies across nations. Second, the types of incomes should be determined. The two common IP-related incomes are royalties, which MNEs may prefer to decrease the tax burden by locating R&D center abroad, and capital gains. Countries such as France and Hungary allow firms to receive IP box benefits only for income of these two types. This type of scheme may not encourage innovative domestic activities but, instead, will promote the transfer of mobile properties. On the other hand, different kinds of IP box regimes allow firms to gain tax benefits on IP-related income embedded in the sale price of patented goods and notional royalty income from internal IP usage. Another issue is whether qualifying Peter Merrill et al., “Is It Time for the United States to Consider the Patent Box?” Tax Notes, (March 26, 2010): 1665-1675. 162 Lisa Evers et al., “Intellectual property box regimes: Effective tax rates and tax policy considerations,” International Tax and Public Finance, Vol. 22 (2015): 502–530. 161

Heinz Journal income is defined as gross or net profit. If gross income were eligible under an IP Box regime, the effective CIT rate could be substantially lower, and it would be a more attractive tax environment for private companies than under the net income design. Consequently, the definition of qualifying income also varies across the regimes. The OECD member and associate countries which arrived at the consensus regarding BEPS need to follow a substantial activity requirement in their IP regimes. Although the base-eroding concern regarding to the CIT revenue losses is central to the project, the OECD believes that promoting IP-intensive industries is a key method of encouraging innovative activities, and therefore allows countries to provide incomebased tax incentives as long as policies meet the principles agreed. 163 Therefore, the requirement is not intended to recommend any particular IP box regime, but to identify the outer limits of an internationally accepted IP box regime. The nexus approach, which decides whether an IP box regime meets the substantial activity requirement, specifies qualifying IP, income, and expenditures. The following formula determines the amount of corporate income that may receive tax benefits under nexus-compliant IP box regimes:164

The nexus approach limits IP assets to patents, copyrighted software, and other assets that are functionally equivalent to patents in that they are subject to similar legal protections and approval processes. The nexus approach also specifies qualifying income as royalties, capital gains, and embedded IP income â&#x20AC;&#x153;from the sale of products and use of processes directly related to the IP

assetâ&#x20AC;?.165 This definition follows the idea that IP box regimes should enhance not the transfer of mobile properties, but real innovative activities. Finally, the nexus approach requires that IP box regimes calculate the IP income in net value. The nexus ratio determines the proportion of qualifying income by the following equation:

a: R&D expenses incurred by the taxpayer that are connected to the IP asset b: expenditures for an unrelated-party outsourcing of R&D c: costs of acquiring the IP asset d: expenditures for a related-party outsourcing of R&D 166 The formula indicates that if the taxpayer acquired the IP or used related-parties for outsourcing of R&D, the proportion of their income eligible for tax benefits would decrease. The expenditures incurred to develop and improve the IP asset are eligible as qualifying expenditures because there is a nexus between these expenditures and real R&D activities, but the acquiring costs are not. The nexus approach also excludes outsourcing to related parties because the activities that firms outsource tend to be value-creating. Countries other than the Member States of the EU, which cannot discriminate against other Member States, can modify this requirement and may define outsourcing expenditures for domestic relatedparties as eligible. There are agreed-upon modifications that ease the conditions of the nexus approach such as the introduction of a cap on non-compliant IP income and the extension of the abolition schedule for old regimes. 167 Participating countries, however, need to cooperate with the monitoring process led by the FHTP, which will 165

163

Organisation for Economic Cooperation and Development, Countering Harmful Tax Practices More Effectively, 24. 164 Ibid., 25.

Ibid., 29. Ibid., 28. 167 Organisation for Economic Cooperation and Development, Action 5: Agreement on Modified Nexus Approach for IP Regimes, 3â&#x20AC;&#x201C;5. 166

Intellectual Property Box Regimes eventually result in serious political pressure on them to abolish their non-nexus-compliant IP box regimes. In fact, many countries terminated or started to remove their old IP boxes even before the FHTP evaluated the scheme as harmful.168 Conditions specified in the report became standards for IP box regimes and contributed to easing the preferential tax competition amongst countries. Theory and Evaluation of Economic Effect of IP Box Regimes As described above, the details of the policy design vary between each IP box regime. There have been, however, two common objectives shared by most of the governments introducing IP box regimes:169 ● ●

Retain mobile sources of income to reduce the erosion of the domestic tax base. Promote domestic innovation by encouraging R&D activities and highvalue jobs.

Because of the first objective, IP boxes could induce a worldwide tax competition that leads to overall lowering of tax burden on IP income. Although there was a defense claiming that aggressive tax competition for mobile income is less harmful than reduction of general CIT rate for both mobile and non-mobile sources of income, a micro-simulation model suggests that IP boxes substantially decrease tax revenues for all governments that adopt them. 170 Following the progress of regulatory discussion at the OECD and the establishment of the substantial 168

Organisation for Economic Cooperation and Development, Harmful Tax Practices - 2017 Progress Report on Preferential Regimes, 15–22. 169 Sebastian Bradley et al., “Cross-Country Evidence on the Preliminary Effects of Patent Box Regimes on Patent Activity and Ownership,” National Tax Journal 68 (2015): 1047–1072. 170 Michael Keen, “Preferential regimes can make tax competition less harmful,” National Tax Journal, vol. 54 (2001): 757–762; Rachel Griffith, Helen Miller and Martin O’Connell, “Ownership of intellectual property and corporate taxation,” Journal of Public Economics, Vol. 112 (2014): 12–23.

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activity requirement, IP box regimes have simplified their policy goal solely to that of stimulating innovative activities. This fits with the original intent of IP box regimes as a measure to overcome market failures. Even if IP boxes generate tax revenues than other tax incentives, it is difficult for governments to justify the adoption of the regimes provided there is no significant effect to promote innovative domestic activities. In fact, the government of Ireland abolished its old IP box regime in 2010 claiming “the relief has not had the desired impact on innovation and R&D activity” and “it was not a particularly welltargeted measure providing good value for money.”171 Whether IP box regimes are effective enough to support private investments is a substantial concern for policymakers. The problem should be addressed in terms of the economic effect on the behavior of both domestic business entities and MNEs. IP boxes, by their very nature, provide an ex post reward to successful and usually large firms which have already realized a monopoly right on their inventions, thus incentivizing them to pursue promising projects.172 These measures, however, will not incentivize cash-constrained taxpayers such as start-ups because taxpayers without current tax liability cannot benefit from the CIT reduction. On the other hand, expenditure-based tax incentives can solve with their refundability feature.173 Also, there may be a difference between the reactions of domestic firms, which benefit either from the nexus-compliant IP box or the non-nexus-compliant IP box. Overall, how positively domestic business entities react to the enactment of IP boxes is inconclusive. Reactions of business entities may vary

Houses of the Oireachtas, “Written Answers Tax Code,” Houses of the Oireachtas, 2010, http://oireachtasdebates.oireachtas.ie/debates%20authoring/ DebatesWebPack.nsf/takes/dail2010120700062?opendocu ment. 172 Organisation for Economic Cooperation and Development, The Innovation Imperative, 126. 173 Peter Merrill, “Innovation Boxes: Beps and Beyond,” National Tax Journal, vol. 69(4) (2016): 847–862. 171

Heinz Journal depending on the company’s size and other characteristics. It is also important to consider how MNEs will react once the government adopts IP boxes because they disproportionately own a large number of patent applications filed in major IP offices worldwide. 174 Their strategy to locate an R&D center may change depending on the types of IP development conditions in each regime. If IP boxes allow the tax benefits even on income generated from acquired IP, MNEs will have a broader choice for their tax planning. They can develop IP where they maximize the deductibility of the R&D expenditure and transfer it to a jurisdiction in which they can minimize tax burdens. In this context, some types of IP boxes, such as the non-nexus compliant IP box, may not function well to encourage MNEs to increase domestic R&D expenditures. Alternatively, if IP boxes only accept self-developed IP, MNEs cannot easily transfer their mobile property to a country to benefit from tax breaks and MNEs will match the location of experimentation activities. When MNEs choose the R&D location, they will compute the probability of R&D’s success, so that they can maximize their worldwide after-tax profits.175 The success rate to develop IP heavily depends on physical and human capital of the country.176 Therefore, the local CIT rate is only one of the factors affecting the global R&D location choice for MNEs. Consequently, it is critical whether the adoption of IP box regimes, either the nexus-compliant or the non-nexuscompliant IP box, will encourage the innovative activities as a whole and that it be clarified with empirical evidence. 174

Organisation for Economic Cooperation and Development, OECD Science, Technology and Industry Scoreboard, (Paris: OECD Publishing, 2018), http://www.oecd.org/sti/scoreboard.htm. 175 Organisation for Economic Cooperation and Development, Taxation and Innovation, 40–42. 176 Xavier Cirera and William F. Maloney, The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-Up, (Washington, DC: World Bank, 2017): 7, https://openknowledge.worldbank.org/bitstream/handle/109 86/28341/9781464811609.pdf.

There has been some empirical research conducted to evaluate the economic effect of IP boxes on real business activities. One of the commonly adopted measures to quantify the economic impact of IP boxes is to count the increase or decrease in the number of domestic patent applications. One study revealed that the non-nexus-compliant IP boxes could increase the number of patent applications, but the nexuscompliant IP boxes could not. 177 The outcome suggested de novo domestic innovation did not occur because the increase of the patent applications could come from mere transfers of IPs. Secondly, the European Commission published a report, which used the location of the patent inventors as a substitution for the real economic activity. 178 This clarified a trend of inventors moving their location if the IP box regimes include a local development condition. The report also suggested that they may decrease the possibility of moving if IP box regimes do not include such a condition. Although these studies indicated the pattern of patent applications and registering locations, there is a consensus that more domestically owned IP does not necessarily mean more innovative domestic activities.179 A notable empirical research study that tried to analyze the change of real economic activities is a study conducted by the IMF. 180 The research evaluated the change of R&D spending in four European countries before and after the introduction of IP box regimes. The result Bradley et al., “Cross-County Evidence,” 1047-1072. Annette Alstadsæter, et al., “Patent Boxes Design, Patents Location and Local R&D.” IPTS Working Papers on Corporate R&D and Innovation – No 6/2015, (Spain: European Commission Joint Research Centre, 2015): 1519, https://ec.europa.eu/jrc/sites/jrcsh/files/JRC96080_Patent_b oxes.pdf. 179 Jason Fichtner and Adam Michel, “Don’t Put American Innovation in a Patent Box,” Mercatus Center at George Mason University, December 7, 2015, https://www.mercatus.org/publication/don-t-put-americaninnovation-patent-box-tax-policy-intellectual-property-andfuture-rd. 180 International Monetary Fund, Fiscal Monitor - Acting Now, Acting Together, 52-53. 177 178

Intellectual Property Box Regimes suggested that IP box regimes in Belgium and the Netherlands that require the selfdevelopment condition for IP have a positive effect of raising the R&D expenditures. However, another study found no evidence of additional R&D investments after the introduction of a Belgium IP regime in 2007.181 Because the analyses here are based only on few selected countries, the external validity may not be applicable. Per the present research and findings, it remains an unsettled question whether or not IP boxes can spur real business activities. II.

Empirical Analysis

Variable Selection and Hypothesis Setting As a representation of real innovative activities, the business enterprise R&D expenditure (BERD) is used. BERD is considered to be a reliable measure to quantify the scale of investments in the economy.182 This study uses the index from Main Science and Technology Indicators (MSTI), a publicly available statistical database provided and maintained by the OECD.183 The MSTI database holds a set of indicators in the field of science and technology in 35 OECD member and seven non-member countries since 1981, and that covers 17 states specified as countries that enacted an IP regime by 2015. The exact data extracted regarding business enterprise expenditure is as follows: ● R&D (current PPP in US $) ● R&D performed in the computer, electronic and optical industry (current PPP in US $) The primary question is whether IP box regimes are effective in encouraging innovative activities as a policy measure to overcome market failures, Dumont, “The Impact of Subsidies,” 69-91. Joanne Hausch and Albert De. Luca, “A Vehicle for Innovation and Sustainable Economic Growth,” Canadian Tax Journal, 65, no. 1 (2017): 39-60. 183 Organisation for Economic Cooperation and Development, “Main Science and Technology Indicators,” accessed December 16, 2018, http://www.oecd.org/sti/msti.htm. 181 182

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which the study represents by BERD. Although the BEPS project condemns the old IP box regimes by focusing on its harmful characteristic of facilitating a race to the bottom, it is assumed that the nexus-compliant IP boxes may be more efficient in fostering economic growth. 184 As discussed above, the adoption of IP box regimes theoretically has both positive and negative effects to the growth of real business activities. It is important to check the impact of IP boxes controlling some indexes because the proportion of the number of domestic SMEs, large-sized enterprises, and MNEs conducting R&D activities in each jurisdiction differs, in relation to the economic size and characteristic of the country. To differentiate the nexus-compliant and the non-nexus-compliant IP boxes, the IP development condition is settled as a proxy of the nexus requirement. Though the expenditure for a related-party outsourcing of R&D is an important factor in the OECD’s formula, reducing the amount of eligible income, Action 5 report lets countries other than the EU Member States ease the condition. Following the complexity of the outsourcing condition, I dropped the condition to avoid the modeling intricacy. Therefore, IP box regimes are divided into two subgroups that will substitute the nexus requirement: acquired IP box and non-acquired IP box. Though tax incentives apply to all industries as market-based instruments, the IP box as an innovation policy may be targeting specific sectors in practice. Her Majesty’s Treasury announcement mentioned particular areas such as pharmaceutical, engineering, life science, and technology sectors as possible candidates to gain profits under its IP box regime. 185 If the industries only need shorter development phases and a lower level of input costs, they will react rapidly as they can easily adjust their IP-related income to tax incentives. 186 ICT industry is Alstadsæter et al., “Patent Boxes Design,” 2. Her Majesty’s Treasury, “David Gauke's Speech.” 186 Thomas Schwab and Maximilian Todtenhaupt, “Spillover from the Haven: Cross-Border Externalities of 184 185

Heinz Journal mentioned as one of the examples which share such characteristics. The idea may justify the adoption of IP regimes, even if these regimes have no significant impact on the total economy but only impact on the specific sectors. Consequently, the focus of the analyses includes the followings: ●

●

The economic impact of IP box regimes on BERD and the difference of the effect between the acquired IP boxes and the non-acquired IP boxes, resolving the unsettled question about the overall effectiveness of IP box regimes. The industry heterogeneity between total and ICT sector. If ICT sector follows an incentive scheme specified above, it will react by inventing more in domestic R&D activities.

Data Description Panel data of BERD and some major economic indexes are collected as a control variable from the MSTI database. All of these economic indexes are converted into the natural log scale to produce an analysis revealing percentage change. The data covers statistics from 1981 to 2015, although the MSTI database possesses data after 2015. Some of the targeted jurisdictions amended or started to amend their IP box regime after the OECD member and associate countries reached their consensus in 2015.187 Therefore, it is more consistent to exclude data in and after 2016, because private companies may have anticipated the revision or abolition of tax laws and changed their behavior regardless of official government action. It is important to note that the MSTI database lacks data from some jurisdictions for some years. The resulting data set in the analyses is somewhat unbalanced because the collection of data relies Patent Box Regimes Within Multinational Firms,” Discussion Paper no. 16-073 (Centre for European Economic Research, 2016), 24-26, http://ftp.zew.de/pub/zew-docs/dp/dp16073.pdf.

on the contributions from each jurisdiction. Also, the separation of a country inevitably resulted in the discard of the past statistics. As a result, many eastern European nations provide statistics mainly after the 1990s. The data sets of IP box enactment year and the IP development condition were gathered from a variety of sources. The research by PricewaterhouseCoopers provides a comprehensive list of IP box regimes amongst major countries and describes each IP development condition. 188 Also, several researchers and international organizations such as the OECD published reports which could complement the list. 189 Using these sources, a list of jurisdictions is compiled to specify the year of enactment and the IP development condition of each regime. Table 1 shows the final list of jurisdictions which introduced IP box regimes and are utilized in the empirical analysis.

PricewaterhouseCoopers, “Global Research & Development Incentives Group April 2017,” accessed December 16, 2018, 8–15, https://www.pwc.com/gx/en/tax/pdf/pwc-global-r-and-dbrochure-april-2017.pdf. 189 Alstadsæter et al., “Patent Boxes Design,” 22; PricewaterhouseCoopers, “A Comparison of Key Aspects of the International Tax Systems of Major OECD and Developing Countries,” May 10, 2010, 17, http://businessroundtable.org/sites/default/files/BRT_14_co untry_international_tax_comparison_20100510.pdf. 188

187

Organisation for Economic Cooperation and Development, Harmful Tax Practices, 15–22.

Intellectual Property Box Regimes

Table 1: BERD and IP Box Data by Jurisdiction Jurisdiction

BERD in 2015

Year Enacted

Eligibility of Acquired IP

Belgium

8,830.85

2007

Yes, if further developed

France

39,020.65

2001

Yes

Greece

920.17

2010

Hungary

2,579.28

2003

Yes

Ireland

2,747.77

1973

Yes

Israel

10,923.42

2004

Italy

17,350.91

2015

Yes, but compliant with nexuscap

Korea

58,714.50

2014

Luxembourg

383.08

2008

Yes, from non-directly associated companies

Netherlands

9,414.27

2007

Yes, if further developed

Portugal

1,763.39

2014

Spain

10,361.58

2008

Turkey

8,571.98

2001

United Kingdom

29,944.94

2013

Yes, if further developed

China

312,862.58

2008

Yes

Notes: BERD is in current PPP US Dollar, Millions. IP boxes which require further development of acquired IP or are compliant with the nexus-cap are categorized as non-acquired IP box regimes.

The different number of samples are used for Model 1 and 2, the econometric model which the following section describes its formula. Model 1 is comprised of 40 jurisdictions: 25 jurisdictions did not introduce IP box regimes and 15 of them adopted some kind of IP box regimes. Though the total number of jurisdictions which

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introduced IP box regimes till 2015 are 17 out of 42 jurisdictions in the database, Canada and Switzerland are excluded because their IP box regimes are introduced at the local government level. It is better to remove this data to purely compare the effect of IP box regimes as a measure to improve innovative activities at the national level. The same limitation is true to Model 2. Model 2 is comprised of 15 jurisdictions, all of which are comprised of jurisdictions with IP box regimes, and these states are divided into two subgroups depending on their IP development condition as discussed above.

Methodology Model 1 The FEM is a popular method to estimate causal relationship between a specific intervention and a variable of interest when panel data is used. We can compare the difference in outcomes with and without the policy intervention. I began the examination of the effects of IP box regimes on BERD by fitting the econometric model: 190 (1)

where Yjy means the natural log of BERD in jurisdiction j in year y, β denotes the regression estimate, and IPBOXjy is a set of dummies for the adoption of IP box regimes. Xjy is a control variable such as GDP and population, and θ is a coefficient of them. γj works as a set of jurisdiction fixed effects which control for differences in BERD amongst jurisdictions and δy is a set of year fixed effects which control for BERD growth common to all jurisdictions. Finally, εjy is an error term which takes into account the margin of error within a model. The model will allow us to recognize how the adoption of IP box regimes affects the increase or decrease of business enterprise R&D Thomas Spreen, “The Effect of Flat Tax Rates on Taxable Income: Evidence from the Illinois Rate Increase,” National Tax Journal 71, no. 2 (2018): 246. 190

Heinz Journal investments. First, I estimate the economic impact of the introduction of any IP box regimes, which will reveal how IP box regimes affect the scale of innovative domestic activities in general. Second, I divide the regimes into two subgroups: acquired IP box regime and nonacquired IP box regime. This model will allow the check of whether the adoption of the IP development condition works as a factor to facilitate business entities to increase domestic investments. Model 2

year an IP box regime is introduced in jurisdiction j. δt denotes the time path of a log of BERD relative to the year of the policy enactment. The third formula shows that the policy enactment is not led by trends of jurisdiction-specific BERD growth or decline. The last formula shows the endpoint restrictions which assume that any effects will subside after six years. A five-year range to capture the economic effect will relieve the disadvantage of the unbalanced dataset and relax the collinearities caused by the years and event-time dummies.

I also scrutinize whether there is a significant difference of the effect on R&D investments between these subgroups. An event-study research design is one of the variations of the difference-in-difference method, which is advantageous at capturing time dynamics of the impact of the policy enactment. 191 The model will allow us to see how the trajectories of the BERD growth or decline change before and after the adoption of IP box regimes. I set up the following econometric model: 192

Once the event-study identifies the time paths of R&D investments, I checked the difference-indifference estimate to reveal whether there is a statistically significant difference between the effect of IP boxes, depending on the IP development condition. The control group is comprised of jurisdictions which introduced IP box regimes under non-acquired IP conditions and the treatment group is a set of jurisdictions which adopted IP boxes under acquired IP conditions.

(2)

Results Model 1

where Ycy denotes the natural log of BERD in jurisdiction j in year y. βj, γy, and εjy are a jurisdiction effect, a year effect, and an error term respectively. The Dtjy works as event-time dummies which are equal to one if the policy enactment of either acquired or non-acquired IP regime is t periods away in each jurisdiction and zero otherwise. I[.] is an indicator function for the condition in brackets being true, and ej is the

I first present the regression analyses on BERD in total industry. Each column in Table 2 shows a regression of the log of BERD. Considerations here are the regressions on jurisdiction and year dummies, jurisdiction linear time trends, jurisdiction quadratic time trends, indicator variables for the types of IP box regimes, and control variables. The control variables are converted into the natural log scale.

Patrick Kline, “The Impact of Juvenile Curfew Laws on Arrests of Youth and Adults,” American Law and Economics Review, 2011, vol. 14, issue 1 (2011): 44-67. 192 Ibid., 50-51. 191

Intellectual Property Box Regimes

Table 2: The Estimated Impact of IP Box Regime Introduction on BERD, Controlling for Major Economic Indexes (1)

(2)

-0.055

-0.13

(3)

(4)

(5)

(6)

(7)

(8)

-0.121

-0.172

0.017

-0.111

0.015 -0.108

Any IP regime (0.082) (0.069) (0.053) (0.064) Non-acquired IP regime (0.097) (0.095) 0.074

-0.055

(0.076) (0.089) 0.01

-0.103

Acquired IP regime (0.089) (0.063)

(0.063) (0.058)

-0.174 1.404

-0.172

1.403

(0.807) (0.755)

(0.823) (0.757)

Log of GDP 1.064 -0.461

1.064

-0.462

Log of value added of industry (0.702) (0.651)

(0.705) (0.652)

-0.636 -0.465

-0.64

-0.468

Log of population (0.620) (0.629)

(0.633) (0.627)

State and year dummies

Yes

State Ă&#x2014; time trends

Yes

State Ă&#x2014; time2 trends

Yes

Samples

1,051

1,043

1,043 1,051

1,051

1,043

0.991

0.995

0.992

0.996 0.991

0.995

0.992

0.996

Notes: The dependent variable in all regressions is BERD in logs. The sample consists of BERD from 1981 to 2015 from 40 jurisdictions. Standard errors (in parentheses) are clustered at the jurisdiction level.

The first two columns show the estimated effect of the adoption of any kind of IP box regimes on BERD. The coefficient of -0.055 in column 1 means that BERD will decline by 5.5 percent more in jurisdictions that adopt any IP boxes than in non-adopting jurisdictions; if mean jurisdiction BERD levels and common year effects are removed and jurisdiction-specific linear time trends are added. However, the effect here is estimated imprecisely. In column 2, I add controls for quadratic jurisdiction time trends in

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case BERD of each jurisdiction trend nonlinearly. But the estimated coefficient is still insensitive to the additional control. In column 3 and 4, I add control variables to explore whether the estimates are biased by the change of other economic indicators in jurisdictions. The coefficients, however, are imprecise indicating the adoption of IP box regimes may not incentivize private companies either to increase or decrease R&D investments even if other indicators are considered. Column 5 to 8 report

Heinz Journal the estimated effect of the adoption of acquired and non-acquired IP boxes in the same settings described above. However, all of the coefficient estimations for both types of IP boxes are, also imprecise. Therefore, these estimates do not confirm that the adoption of these IP box

regimes have an effect on BERD increase or decrease in the total industry at a statistically significant level.

Table 3: The Estimated Impact of IP Box Regime Introduction on BERD in ICT industry, Controlling for Major Economic Index

(1)

(2)

(3)

(4)

0.098

0.05

0.111

0.038

(5)

(6)

(7)

(8)

0.17

0.058

0.204

Any IP regime (0.133) (0.066) (0.118)

(0.067)

Non-acquired IP regime (0.166) (0.082) (0.133) -0.083

0.033

-0.105

(0.084) 0.114

Acquired IP regime (0.151) (0.118) (0.154)

(0.097)

-0.974 -3.697**

-0.898

-3.724**

(2.660)

(1.213)

(2.584)

(1.209)

0.755

2.390*

0.771

2.372*

(2.097)

(1.096)

(2.055)

(1.066)

1.501

-0.215

1.439

-0.213

(1.390)

(1.205)

(1.384)

(1.215)

Log of GDP

Log of value added of industry

Log of population State and year dummies

Yes

State Ă&#x2014; time trends

Yes

State Ă&#x2014; time2 trends

Yes

Samples

833

815

833

815

0.978

0.985

0.978

0.986

0.978

0.985

0.978

0.986

Notes: The dependent variable in all regressions is the log of BERD in ICT industry in logs. The sample consists of BERD from 1987 to 2015 from 35 jurisdictions because of the lack of data in MSTI database. Standard errors (in parentheses) are clustered at the jurisdiction level. **Significant at the 5 percent level. *Significant at the 10 percent level.

Table 3 reports the same regression analyses on BERD in ICT sector, which allows the check of the industry heterogeneity of R&D investments. The first two columns describe the estimated

effect of any IP box regimes on the index. The coefficients from column 1 to 4 show that BERD in ICT sector will grow once jurisdictions adopt any IP boxes in terms of IP development.

Intellectual Property Box Regimes However, the effects here - that the estimations do not support the causality between the policy intervention and the growth of real economic activities - are not statistically significant. In column 5 to 8, the estimates for acquired and non-acquired IP boxes also reveal the coefficients without statistically significant accuracies. The estimations in column 4 and 8 indicate that the scale of GDP and value added in industry may have a significant effect on BERD in ICT sector, which either drop or raise the scale of investments.

There appears to be no pretreatment trend in the coefficients of both Panel 1 and 2. We can find a slight downward trend once both types of IP box regimes are enacted, although the coefficients of Panel 2 increase at year 4 and 5. Because these reductions in the scale of BERD are relatively minor, the outcomes are consistent with what Model 1 revealed about the effect of IP boxes on BERD. These results support the idea that both acquired and non-acquired IP regimes will not necessarily enhance the business R&D investments as the theories suggested.

The results suggest that IP box regimes, both acquired IP and non-acquired IP regime, may not necessarily enhance business R&D investments. The outcome reflects the theoretical expectation that IP boxes can both incentivize and disincentivize business entities to conduct new R&D activities, indicating both positive and negative effects of policy enactment may have been offset. Interestingly, the estimate also did not support the industry heterogeneity of ICT sector, which some governments try to rely on when adopting IP box regimes.

Introducing the nexus-compliant IP box may be justified if it is more likely to encourage innovative activities than the non-nexus regime, although there is only scarce evidence that IP box regimes would enhance innovative activities. Table 4 reports the difference-indifference estimate of the BERD change following the both types of IP box introduction. The mean log BERD for non-acquired IP box jurisdictions increased by 0.752 and that of acquired IP box jurisdictions decreased by 0.501. The difference-in-difference estimate shows the jurisdictions with non-acquired IP box regimes may increase its BERD by 1.253 compared to other jurisdictions with acquired IP box regimes, but the coefficient is not statistically significant. Therefore, the expansion of BERD gaps between the two types of IP boxes seems to be unaffected by the IP development condition. From the result, it is better to conclude that there is not enough evidence that the non-acquired IP boxes will promote business R&D activities more effectively than the acquired IP boxes. This implies that the same may be true in the relationship between the nexus compliant and non-nexus compliant IP boxes.

Model 2 Model 2 scrutinizes the distinction between acquired and non-acquired IP box regimes to check the validity of the outcomes achieved in Model 1. Figure 1 represents the time paths of event study coefficients for two types of IP box regimes. Panel 1 shows event-study coefficients for years before and after an acquired IP boxâ&#x20AC;&#x2122;s enactment. Panel 2 plots the coefficients for years before and after a non-acquired IP boxâ&#x20AC;&#x2122;s enactment. The solid line is a time path of coefficients and dashed lines are the upper and lower limit of 95% confidence intervals which are calculated using clustered standard errors.

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Figure 1. Event Study: The Effect of IP Box Enactment on BERD Notes: Time is normalized relative to the enactment year (t = 0), and the coefficients are normalized to zero in the year prior to an enactment (t = -1). The sample consists of BERD from 1981 to 2015 from 15 jurisdictions.

Table 4. Difference in Difference Estimator: Mean Log BERD Before and After IP Box Enactment under Both IP Development Conditions

Non-acquired IP condition

Acquired IP condition

Relative difference

Before

After

21.671

22.423

[1.609]

[1.037]

n = 237

n = 67

22.117

21.616

[1.769]

[2.337]

n = 60

n = 74

Difference

0.752

-0.501

1.253 (0.869)

Notes: Standard deviations in brackets and a clustered standard error in parentheses.

Intellectual Property Box Regimes III.

Conclusion

economic benefits is an important area which future research can complement.

IP box regimes have been ineffective in encouraging innovative domestic activities. The empirical analysis reveals that the introduction of both acquired and non-acquired IP regimes cannot impact the scale of BERD and the same is true to the scale of BERD in the computer, electronic, and optical industry. These results will support the conceptual framework that an IP box regime - as one form of the income-based tax incentives - can only support the specific innovative activities providing ex post benefits to successful enterprises. The types of IP development conditions are not impactful enough to affect how MNEs react to the adoption of IP boxes. It matches the idea that MNEs take the local CIT rate as only one of the factors affecting the global R&D location strategy. The outcome here complements the previous research which questioned the effectiveness of both types of IP box regimes as a key factor for economic development. Also, the industry heterogeneity may not overcome the ineffectiveness of IP box regimes on total economy. Therefore, governments which take care of costs and benefits of the policy intervention should reconsider which IP box structure they introduce to achieve the pertinent policy goals. It is important to note that the analysis covers data up to 2015, when both the nexus-compliant and the non-nexus-compliant IP box regimes could exist at the same time. Because the nonnexus-compliant IP regimes are more attractive as a measure to retain IP than the nexuscompliant IP box regimes, the economic effect of the nexus-compliant IP box regimes before 2016 may have been somewhat distorted. Some countries still continue the IP box regimes as an innovation driver while processing the amendment of old IP box regimes (OECD, 2017). The BEPS consensus set up the new condition where IP box regimes must follow the nexus requirement to ease the harmful tax competitions worldwide. Therefore, whether the nexus-compliant IP boxes alone will yield the

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Heinz Journal This analysis will start by giving background information on racial disparities in sentencing and then do a legal review before digging into the policy options. Each policy will be assessed for cost-effectiveness, equity, and political feasibility.

Racial Disparities in Death Penalty Sentencing Kaitlyn Hendrickson University of Pittsburgh â&#x20AC;&#x201C; Graduate School of Public and International Affairs (GSPIA)

The analysis concludes that abolishing the death penalty altogether is the best option for eliminating racial disparities in capital cases. It is the most economically efficient option, with various studies across many states coming to the same conclusion, that death penalty cases cost states additional hundreds of millions of dollars per year. From an equity standpoint, the abolition of the death penalty completely eliminates racial disparities and provides wrongly-accused defendants a lifetime to prove their innocence. This is politically feasible, as 7 states since 2007 have abolished the death penalty, and public support for the death penalty has decreased significantly in recent years.

Racial disparities in the criminal justice system in the United States have been at the forefront of public interest in the past few years. In death penalty sentencing, studies have shown that race plays a substantial role in the outcomes of capital cases. The aim of this paper is to examine the current policy of states where capital punishment is legal and provide two alternative policies for eliminating or lessening racial disparities in death penalty sentencing, which include (1) abolishing the death penalty altogether and (2) enacting a Model Racial Justice Act.

I. Background Skin color, in both the defendant and the victim, plays an objectionable role in death penalty cases in America. Since 1976, people of color have accounted for nearly half of total executions and make up 55 percent of those currently awaiting execution.193 There have been multiple reports and studies that have shown racial prejudice in the application of the death penalty. The Government Accountability Office (GAO) found, in their review of 28 different studies, a pattern of evidence which indicates racial disparities in charging, sentencing, and the imposition of the death penalty. 194 In 82 percent of those studies, the race of the victim was found to influence the likelihood of a defendant being charged with capital murder or receiving the death penalty, with that percentage increasing when the

victims were white. 195 The GAO found that the influence of a victimâ&#x20AC;&#x2122;s race was strongest in the early stages of the judicial process, which includes the prosecutorâ&#x20AC;&#x2122;s decision to charge the defendant with a capital crime and the decision to proceed to trial instead of accepting a plea bargain. 196 The GAO looked at legally relevant variables, such as prior criminal record, culpability level, the seriousness of the crime, and the number of victims. Even after controlling for these variables, the probability of receiving the death penalty was strongly correlated to the race of the victim. 197 A Cornell Law Review study focused on four issues related to racial discrimination in the use of the death penalty, including: (1) the link between discretion and discrimination; (2) ethical, moral, and legal concerns associated with racial discrimination in the administration of the death penalty; (3) evidence of this discrimination; and, (4) judicial and legislative responses to claims of

193

Race and the Death Penalty. ACLU. Retrieved from https://www.aclu.org/other/race-and-death-penalty. 194 Biden, J., Thurmond, S., Kennedy, E. M., Brooks, J., & Fish, H., Jr. (February 1990) Death Penalty Sentencing: Research Indicates Pattern of Racial Disparities (Rep. No. GGD 90-57). United States General Accounting Office.

195

Ibid. Ibid. 197 Ibid. 196

Intellectual Property Box Regimes racial discrimination. 198 The results suggested that defendants whose victims were non-black faced a greater risk of receiving the death penalty.3 Even 30 years after the civil rights movement, few adjustments to the criminal justice system had taken place, diminishing efforts of equality. Both the Cornell Law Review and GAO studies have demonstrated that new policies need to be implemented to eliminate racial disparities in death penalty cases.

After Gregg v. Georgia, studies started to shift from looking at the race of the defendant to the race of the victim. A 1983 study by David Baldus looked at over 2000 murder cases in Georgia during the 1970s.201 It found that the death penalty was imposed as follows: Cases With Death Penalty Imposed Black Victim

White Victim

Black Defendant

22%

White Defendant

II. Legal Review During the past half-century, multiple cases dealing with issues of racial disparities in death penalty sentencing have gone to trial. In 1972, the Supreme Court temporarily suspended the use of the death penalty in Furman v. Georgia. The case revealed that the death penalty was imposed on blacks at a much higher rate compared to the general population, demonstrating that the death penalty was being administered in a racially discriminatory way. The Court suspended the death penalty until states could figure out a way to ensure that the process was done in a careful and judicious way. Following Furman, states began implementing statues to do just that. Many of these statues included separate trial and sentencing hearings, so juries would first determine whether the defendant is guilty or not guilty before looking at whether the death penalty would be used. 199 Other statues included standards that required juries to examine the severity of the crime and nature of the defendant, as well as a comparison of the case to other similar cases. 200 In the 1976 Gregg v. Georgia case, the court ruled that the new post-Furman statutes were sufficient enough to prevent the death penalty from being used in a discriminatory and unfair manner, so capital punishment was reinstated.

With regards to how often prosecutors were asking for the death penalty in these cases, it found the following rates: Cases With Prosecutors Seeking Death Penalty Black Victim

White Victim

Black Defendant

15%

70%

White Defendant

19%

32%

In 1987, the defendant in McCleskey v. Kemp used the 1983 Baldus study to argue that his death sentence was imposed due to racial discrimination. While the Supreme Court found that the research was accurate, they ruled that McCleskey would need to prove intentional discrimination, which the Baldus study did not prove. Had McCleskey won, the entire criminal justice system would have been called into question, as similar claims could be

198

Baldus, David C., Woodworth, George, Zuckerman, David, & Weiner, Neil Alan (September 1998) Racial Discrimination and the Death Penalty in the Post- Furman Era: An Empirical and Legal Overview with Recent Findings from Philadelphia (6th Edition, Volume 83). Cornell Law Review. 199 Race and Death Penalty. 200 Ibid.

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201

Baldus, David C., Pulaski, Charles, & Woodworth, George (1983) Comparative Review of Death Sentences: An Empirical Study of the Georgia Experience (Issue 3, Volume 74). Journal of Criminal Law and Criminology.

Heinz Journal extended to other penalties and groups of people.202 III. Current Policy Most states do not have policies in place to eliminate racial disparities in death penalty cases. The death penalty is currently legal in 30 states. Approaches to addressing the racial disparities include (1) abolishing the death penalty altogether and (2) enacting a Model Racial Justice Act. IV. Expanding the Racial Justice Act to All States with the Death Penalty There have been two attempts at the federal level to address racial disparities in death penalty sentencing. In McCleskey v. Kemp, the Supreme Court rejected statistical evidence that showed racial disparities in capital sentencing were intentional. Then in 1994, Congress attempted to pass a federal Racial Justice Act to prohibit seeking or imposing the death penalty on the basis of race, which eventually lost momentum after President Clinton pushed back. While attempts at the federal level have failed, states have a greater chance to take action. Each state can look at evidence in their jurisdictions, which eliminates the concern of federalism. Kentucky and North Carolina have adopted laws that look at the statistical evidence that McCleskey had attempted to use in his case. The North Carolina bill was fought with proposed revisions until it was repealed entirely under Republican leadership. Taking some lessons learned from both of these states, a Model Racial Justice Act can be proposed for states. This Racial Justice Act model states that no person shall be subject to or given a sentence of death or be executed following any judgment that was sought or obtained on the basis of race. However, the defendant must prove clearly and convincingly that race was a significant factor in decisions to seek or impose the sentence of death in the county, 202

Weisberg, Robert (June 2005) The Death Penalty Meets Social Science: Deterrence and Jury Behavior Under New Scrutiny. Annual Review of Law and Social Science: Volume 1, 2005.

prosecutorial district, or state at the time the death sentence was sought or imposed. 203 The defendant can raise a claim during pre-trial or postconviction. Acceptable evidence that finds race as a critical factor includes statistical evidence or other evidence that proves that the race of the defendant or victim was significant, or that race was a significant factor in jury selection. 204 The state may provide their own evidence to rebut these claims. The court can decide whether race was significant enough to affect the sentence. If so, the defendant will automatically be resentenced to life in prison without the possibility of parole. This will be a prospective policy, with no retroactive cases being considered. 205 V. Abolishing the Death Penalty One way for states to eliminate racial disparities in death penalty sentencing is to abolish the death penalty altogether. The death penalty is currently abolished in nineteen states. States have primarily abolished the death penalty either through a ruling by the stateâ&#x20AC;&#x2122;s supreme court or through the introduction and passage of legislation. States have also attempted to abolish the death penalty through voter referendums, which would leave it up to the popular vote. VI. Is The Death Penalty Cost-Effective? An important factor to consider while analyzing a policy is its cost-effectiveness. The potential benefits of the death penalty include deterrence and reduced prison crowding. The reasoning behind the current policy assumes that the death penalty deters potential criminals from committing murder, which in turn reduces spending. The murder rate declines and production increases as potential victims stay alive and work. This line of reasoning assumes that potential criminals are rational decision-makers who weigh the benefits and costs of their crimes. However, there are 203

Alexander, Rees (April 2013) A Model State Racial Justice Act: Fighting Racial Bias Without Killing the Death Penalty. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2249013 . 204 Ibid. 205 Ibid.

Intellectual Property Box Regimes multiple studies that dispute this theory. For instance, when New Jersey implemented the death penalty in 1982, no statistical evidence was found to show a significant decline in the murder rate.206Another instance of non-significant results is when you compare states that allow the death penalty with those that do not. For example, many southern states, where the death penalty can be exercised, have higher murder rates. Arguments as to why deterrence is not significant in reducing murders are explained by the belief that criminals simply enjoy killing, that they are not overall rational thinkers, or that they are committing crimes of passion. 207 The claim of benefits from reduced crowding stems from the idea that imposing the death penalty on criminals reduces the number of inmates in prisons, which then lowers spending costs. However, it is important to keep in mind that the number of executions per year has decreased over the years, so this is a small number relative to the entire prison population. 208 The primary costs of the death penalty include investigation costs, trial and sentencing costs, appellate costs and forgone output. Death penalty cases require a much more in-depth investigation as the defendantâ&#x20AC;&#x2122;s life is on the line. As such, there needs to be strong, valid evidence against the defendant for a jury to sentence a defendant to death. Additional officers and investigators are needed to provide this level of detail to the case. The next major cost is trial court fees, which include pre-trial research by lawyers and staff, jury selection, court reporters, and other procedures. Longer litigation and separate sentencing trials lead to increased costs for death penalty cases. There is also the added costs of psychiatrists and forensic experts. Death penalty cases always go through a series of appeals, adding more costs, and if it gets to the execution stage there are also costs 206

Kasten, Martin (1996) An Economic Analysis of the Death Penalty. University Avenue Undergraduate Journal of Economics: Vol. 1: Issue 1, Article 2. Retrieved from http://digitalcommons.iwu.edu/uauje/vol1/iss1/2. 207 Ibid. 208 Ibid.

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associated with carrying that out. The forgone output cost is when resources are not used to their highest input. Inmates often work while in prison, helping with various tasks to keep the facility running properly. In addition, jurors are not producing outputs in their usual jobs, and as death penalty cases last much longer, this is a greater loss than in non-capital cases.209 Multiple studies have quantified how much more expensive capital cases are compared to noncapital cases.210 A Nevada study showed that lead and second chair attorneys spend an estimated 948 hours more in pre-trial activities for death penalty cases than in non-capital cases, with the addition in costs for public defenders being $169,700 more per case for death penalty cases. 211A California study showed that their current system cost $137 million per year and that it would only cost $11.5 million for the system without the death penalty. Even though death penalty executions have dropped, since most of the expenses are incurred prior and during a trial, the costs to the state are still significant. Keeping the Status Quo: Keeping the death penalty on the books is not cost-effective for states, as deterrence is not a good enough factor in reducing spending; and overall costs of death penalty cases are much higher than in non-capital cases. Implementing a Racial Justice Act Policy: Enacting a Racial Justice Act has the prospective to be cost effective for states, saving them money by addressing racial bias claims earlier in the process and thereby reducing future costs associated with a death penalty case.

209 Ibid. 210 Death

Penalty Cost. Amnesty International. Retrieved from https://www.amnestyusa.org/issues/death-penalty/deathpenalty-facts/death-penalty-cost/. 211 Miethe, Terance D. (February 2012) Estimates of Time Spent in Capital and Non-Capital Murder Cases: A Statistical Analysis of Survey Data from Clark County Defense Attorneys. Department of Criminal Justice, University of Nevada, Las Vegas. Retrieved from https://deathpenaltyinfo.org/documents/ClarkNVCostReport.p df.

Heinz Journal Abolishing the Death Penalty: Abolishing the death penalty is surprisingly cost-effective. Even though states would be paying to keep inmates imprisoned for life, the costs associated with death penalty cases far exceed life imprisonment costs. Is the death penalty equitable? Another main factor to consider when implementing any policy is how socially and economically equitable it is. The issue of morality and fairness in the death penalty can provide a stronger case for an alternative than the great economic savings it provides. While the death penalty requires due process of law, there are many factors that are decided by prosecutors and judges. Due process means that all citizens are entitled to fair treatment by the judicial system, however, the effectiveness of court-appointed counsel can be an issue. Public defenders often carry heavy workloads which do not allow them to give their cases the proper attention and dedication that a death penalty case deserves. Unconscious bias can also play a factor in juror’s decisions as people hold opinions on certain groups of people without realizing it, making it difficult to provide fair judgement. As mentioned, multiple studies have proven racial bias from the prosecution which negatively impacts black defendants. Prosecutors have vast discretion when choosing initial charges, bargaining, and designating the facts that the sentences are based on. They are also primarily responsible for deciding which suits become capital cases. Prosecutors seek the death penalty in about 1 percent of capital-eligible cases. 95 percent of prosecutors are white. Jury selection is another important factor to consider. In Georgia for example, District Attorney Joseph Briley worked to ensure that black defendants would be tried by all-white juries. Between 1974 and 1994, Briley tried 33 capital cases, with 24 of them being against black defendants. In cases with black defendants and white victims, Briley used 96 out of his 103 jury strikes against potential black jurors. Similarly, in the 2003 case of Miller-El v. Cockrell, the Supreme Court ruled in favor of Miler-El, stating that he should have had the opportunity to prove his death sentence was given

based on discriminatory jury practices. Those practices included the “Texas Shuffle” to limit or eliminate black jurors, disparate questioning of potential jurors based on race, and training which instructed prosecutors on ways to skew juries based on race.212 These are just two examples of occurrences and practices of racial discrimination that take place, demonstrating the impact of prosecutor and juror selection in death penalty cases. Another problem with the death penalty is the issue of false positives, which is when a person is convicted of a crime when they are actually innocent. In an investigation that looked at people sentenced to death between 1900 and 1985, 139 were found to be innocent, with 23 actually being executed.213 There are many more undocumented cases of false positives. 214 A more recent 2014 study makes a conservative estimate that 4.1 percent of death row inmates would be found innocent.215 That would equate to around 120 of the 3,000 inmates on death row today. Even one major media story or series, informing the public of a false positive case, can decrease public trust in the criminal justice system and decrease support for the death penalty overall. Keeping the Status Quo: The current state of the death penalty has a negative impact on defendants, families of victims, and taxpayers. At multiple levels of the death penalty process, black defendants have been prosecuted unfairly due to disparities in charging and sentencing. Defendants can be wrongly-accused and executed before they are provided the opportunity to establish their innocence. Families of victims may view the death penalty as an act of justice; however, the process from pre-trial to execution is mentally and physically exhausting. Furthermore, the high costs of lengthy death penalty trials are unfair to taxpayers. 212 Race

and the Death Penalty.

213Kasten 214 Ibid. 215Gross,

Samuel R., O’Brien, Barbara, Hu, Chen, & Kennedy, Edward H. (April 2014) Rate of false conviction of criminal defendants who are sentenced to death. National Academy of Sciences. Retrieved from http://www.pnas.org/content/111/20/7230.

Intellectual Property Box Regimes

Implementing a Racial Justice Act Policy: Enacting the Racial Justice Act can provide black defendants with some relief if they suffered discrimination throughout the death penalty process, although it is a difficult task to prove discrimination and convince the court that it was significant enough to alter one’s sentence. At the same time, it allows families of most victims to feel that justice was still served. Lastly, taxpayers could possibly save some money in pre-trial costs as some death penalty cases would be eliminated earlier in the process. Abolishing the Death Penalty: Abolishing the death penalty would eliminate racial disparities in capital sentencing. Since nobody would be subject to the death penalty, it would be especially equitable for black defendants. Abolishment of the death penalty will allow wrongly-accused defendants to prove their innocence. Furthermore, the lower pre-trial costs of non-capital cases are fairer to taxpayers, as money can be spent on other uses that have greater benefits to society. Is it politically feasible to change or abolish the death penalty? It is crucial to analyze the political feasibility of any change in policy or legislation. A 2016 Pew Research Center survey showed that public support for the death penalty has fallen to the lowest it has been in four decades, with 49 percent of people surveyed in favor of the death penalty. 216 In the mid-90s, the death penalty peaked in public support with 80 percent of people surveyed in favor.217 Given the decline shown in the survey, it may be politically feasible for the abolishment of the death penalty to spread to more states. However, while the survey finds that support for the death penalty has declined across most groups, there are still some differences between 216 Oliphant,

Baxter (September 2016) Support for death penalty lowest in more than four decades. Pew Research Center. Retrieved from http://www.pewresearch.org/facttank/2016/09/29/support-for-death-penalty-lowest-in-morethan-four-decades/. 217 Ibid.

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demographic groups. While 72 percent of Republicans favor the death penalty, only 34 percent of Democrats do. 218 There is a difference among ethnic groups as well, with 57 percent of whites and only 39 percent of blacks being in favor.219 Award-winning author and journalist David Von Drehle outlined several reasons why abolishing the death penalty is gaining support. 220 Although states have been doing this for decades, they have not necessarily gotten better at death penalty cases or the actual executions. As mentioned, death penalty cases take years, sometimes decades, to conclude. While lethal injection was thought to be a more humane way to take a life, there are still botched injections, as well as certain pharmaceutical companies refusing to provide the drugs for moral reasons. 221 Crime rates have also plunged to levels unseen since the 1960s, and increased support for the death penalty correlates with higher crime levels. 222 Along with the high costs and tight state budgets, these reasons make a strong case for abolishing the death penalty. To note, since just 2007, seven states and Washington D.C. have abolished the death penalty.223 In 2018, Washington became the latest state to abolish the death penalty. The state’s Supreme Court struck it down stating that they were “confident that the association between race and the death penalty is not attributed to random chance.” 224 In 2013, Maryland abolished the death penalty through their legislature. The governor signed the bill arguing that the death penalty does 218 Ibid. 219 Ibid. 220Von Drehle,

David (June 2015) The Death of the Death Penalty. Time Inc. Retrieved from http://time.com/deathpenalty/. 221 Ibid. 222 Ibid. 223Barry, Kevin M. (August 2015) State by state, the death penalty is losing ground. Los Angeles Times. Retrieved from https://www.latimes.com/opinion/op-ed/la-oe-barry-deathpenalty-retroactive-repeal-20150819-story.html. 224Kennedy, Merrit (October 2018) Washington State Strikes Down Death Penalty, Citing Racial Bias. NPR. Retrieved from https://www.npr.org/2018/10/11/656570464/washingtonstate-strikes-down-death-penalty-citing-racial-bias.

Heinz Journal not deter crime, cannot be administered without racial bias, costs three times as much as life without parole, and stating that false positives cannot be reversed. 225 Both states and most others that have recently abolished the death penalty have done so while being primarily under Democratic leadership. Over the past few years, the issue of racial disparities in the criminal justice system has been brought into the spotlight again. The shooting of Michael Brown in 2014 was a notable tragedy that helped launch what some are calling a new civil rights movement. Mass incarceration is another issue garnering national attention. Black male defendants receive longer prison sentences than white men.226 Even when accounting for variables like arrest offense and criminal history, black menâ&#x20AC;&#x2122;s sentences were still 10 percent longer than those of their white peers. 227 Much like in capital cases, these longer sentences can be partially attributed to the prosecutors, as they are twice as likely to file charges that carry mandatory minimum sentences against blacks than against whites.228 Popular documentaries and podcasts such as Making a Murderer and Serial are documenting and questioning the practices of the criminal justice system, creating a dialogue at the societal level.

Implementing a Racial Justice Act Policy: The Racial Justice Act may be a good middle ground for states that do not want to abolish the death penalty altogether but want to show that they are being proactive in eliminating racial disparities in their system. Since it would be enacted at the state level, each state can study and make provisions to the policy as they see fit, since it is not an overreaching act by the federal government which red states often oppose. Abolishing the Death Penalty: With public support of the death penalty divided strongly by party affiliation, it would be difficult for many red states to abolish the death penalty, but blue states could likely get it passed. If the overall trend of declined support continues, within the next decade, public support for the death penalty could be so low that it is likely to get abolished across the nation.

The public is now looking at the various stages of the criminal justice system to find ways to improve it, with racial disparities in sentencing and the death penalty having the potential to be at the top of public interest. Keeping the Status Quo: Currently, it is feasible to keep the death penalty on the books. It is the status quo and gets less attention than many other issues in the country at present.

225Simpson,

Ian (May 2013) Maryland becomes latest U.S. state to abolish death penalty. Reuters. Retrieved from https://www.reuters.com/article/us-usa-marylanddeathpenalty-idUSBRE9410TQ20130502. 226Starr, Sonja B. & Rehavi, M. Marit (2014) Racial Disparity in Federal Criminal Sentences (Working Paper No. 12-002). University of Michigan Law School. 227Ibid. 228Ibid.

Intellectual Property Box Regimes

Assessment and Recommendation The issues discussed in this report are summarized in a matrix in Table 1 of the Appendix. These findings are predictions based on the extent to which research is available. This memorandum recommends that the best policy that eliminates or lessens racial disparities in death penalty sentencing would be to abolish the death penalty altogether. As seven states have done so since 2007, it should be politically feasible for many others as well. States have abolished the death penalty either through the judicial branch (ruling by the stateâ&#x20AC;&#x2122;s supreme court) or through the legislative branch (introduction and passage of a bill). Here, the recommendation is for the policy to go through the legislative branch and be signed by the stateâ&#x20AC;&#x2122;s governor.

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A public awareness campaign enacted by groups such as the ACLU or local civil rights groups that focuses on the economic benefits of abolishing the death penalty could be hard to ignore, even for red states with populations who generally support capital punishment. States can also request commissioned reports about the death penalty as a way to increase the visibility of the issue and prepare legislators for bills on the issue.

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Appendix Table 1: A summary of current policy and alternatives The table below rates the quality of the policies on a three-point scale of: 1. Good - the policy is cost effective, equitable, or politically feasible to adopt 2. Fair - the policy is somewhat cost effective, equitable, or politically feasible to adopt 3. Poor - the policy is not cost effective, equitable, or politically feasible to adopt CostEffectiveness

Political Feasibility

Equity

Impact on criminal justice system costs

Fairness to defendants

Fairness to victim’s families

Fairness to taxpayers

Likelihood of successful adoption

Current Policy

3 – high costs associated with the entire death penalty process

3 – large amount of racial discrimination and the issue of false positives

1 – gives families a sense of justice, although a long, burdensome process

3 – large cost to taxpayers

1 – policy already in place

Abolishing the Death Penalty

1 – considerable savings by eliminating death penalty cases

1 – eliminates the possibility of racial discrimination and gives time for wrongly accused to prove innocence

2 – families may feel justice is not served, but a quicker process to some justice

1 – less cost for taxpayers to burden

2 – many states already doing so, public momentum is also shifting

Expanding the Racial Justice Act

2 – minor savings by eliminating some cases early in the process

2 – defendants have the chance to prove racial discrimination, although difficult

1 – most families still have a sense that justice was served

2 – taxpayers can save some money compared to current policy

2 – keeps the death penalty as a possibility but states can decide to eliminate racial disparities

Intellectual Property Box Regimes

Table 2: States that have abolished the death penalty State

Year Abolished

Wisconsin

1853

Maine

1887

Minnesota

1911

Puerto Rico

1929

Alaska

1957

Hawaii

1957

Michigan

1963

Iowa

1965

West Virginia

1965

Vermont

1972

North Dakota

1975

District of Columbia

1981

Massachusetts

1984

Rhode Island

1984

New Jersey

2007

New York

2007

New Mexico

2009

Illinois

2011

Connecticut

2012

Maryland

2013

Delaware

2016

Washington

2018

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College Food Insecurity in the United States: Improving Data Collection and Analysis Sarah Pesi Carnegie Mellon University â&#x20AC;&#x201C; H. John Heinz III College of Public Policy and Information Systems second is being able to afford tuition. 233 I. Introduction Students who drop out of college are the most likely to default on college loans, contributing to College food insecurity is a major issue in the the student loan crisis. 234 Additionally, those United States. A meta-analysis of peer-reviewed who drop out of college often face the worst literature on college food insecurity found the economic outcomes since they have higher debts rate to be around 42% which is about 8.5 million 229 and lower earning potential to pay off their undergraduate student. The proliferation of loans.235 college food pantries across the nation, from nine in 2009 to over 500 today, shows insecurity There are many issues that limit our ability to is a crisis among college campuses. 230 examine college food insecurity, but the most Institutions of higher education, nonprofits, and important one is the lack of consistent data. the government are all looking at ways to There is no national survey; a national survey address this prevalent issue that affects students would allow us to standardize and compare the throughout the United States. data. The data, therefore, often shows varying rates of food insecurity and few ways to Why should institutions of higher education care standardize the reported findings. Additionally, about college food insecurity? Food insecurity college food insecurity data does not provide has academic impacts such as lowering GPA and much qualitative data, and focuses instead on causing to students to forgo purchasing books numbers but not the lived experience of college which can hinder completion of higher food insecurity. This makes addressing the education.231 More than half of students who are problem and providing appropriate interventions food insecure receive Pell grants, an indicator of difficult. Additional data is needed on the impact lower income.232 he number one reason is having of various interventions and role these a hard time balancing school and work, and the interventions play in addressing college outcomes. 229

Bruening, Meg, Katy Argo, Devon Payne-Sturges, and Melissa N. Laska. "The struggle is real: a systematic review of food insecurity on postsecondary education campuses." Journal of the Academy of Nutrition and Dietetics 117, no. 11 (2017): 1767-1791. And United States. Institute for Educational Sciences. National Center for Education Statistics. Undergraduate Enrollment. https://nces.ed.gov/programs/coe/indicator_cha .asp. 230 Greater Pittsburgh Community Food Bank. College Students and Hunger. Retrieved September 23, 2017, from https://www.pittsburghfoodbank.org/college-students-andhunger / and "Members." College and University Food Bank Alliance. February 23, 2018. https://sites.temple.edu/cufba/members/. 231 Dubick, James, Brandon Mathews, and Clare Cady. "Hunger on campus: The challenge of food insecurity for college students." College and University Food Bank Alliance. Retrieved from http://studentsagainsthunger.org/wpcontent/uploads/2016/10/Hunger_On_Campus.pdf (2016). 232 Ibid

This paper examines and provides recommendations for how data collection around college food insecurity can be improved upon by standardizing measures, studying new subgroups, conducting qualitative analysis on the lived experience, and measuring effectiveness of current interventions.

233

Johnson, Jean, and Jon Rochkind. "With Their Whole Lives Ahead of Them: Myths and Realities about Why So Many Students Fail to Finish College." Public Agenda (2009). https://www.publicagenda.org/files/theirwholelivesaheadoft hem.pdf 234 Goldrick-Rab, Sara. Paying the price: College costs, financial aid, and the betrayal of the American dream. University of Chicago Press, 2016. 235 Ibid

College Food Insecurity What is Food Insecurity and How is it Measured? Food insecurity is defined by the United States Department of Agriculture (USDA) as “economic and social conditions of limited or uncertain access to adequate food.” 236 Understanding the USDA definition helps to highlight the current shortfalls of the measure of food insecurity and how it applies to college students, since much of the current research uses the USDA 6 or 10 questions short form. This definition addresses issues of not being able to afford food and lack of a healthy balance of food for adequate nutrition (or being unable to buy culturally appropriate food). 237 The way that food insecurity is measured in most of the studies discussed in the paper is either through the ten-question USDA survey or through the six-question short form survey. 238 Most of the questions are around being able to afford food or having to decrease food intake because there was not enough money. 239 The surveys mainly measure food insecurity as it relates to economic insecurity, or not being able to afford food, and ignores how food deserts and other issues of access can impact food insecurity. 240 The USDA survey have its own coding mechanisms of four ranges of food security which are: high food security, high marginal food security, low food security, and very low food security. 241 The nuances of this coding mechanism are described below.

236

United States. United States Department of Agriculture. Economic Research Services. Definitions of Food Security . October 4, 2017 . https://www.ers.usda.gov/topics/foodnutrition-assistance/food-security-in-the-us/definitions-offood-security/. 237 Ibid 238 United States. United States Department of Agriculture. Economic Research Services. Survey Tools. October 4, 2017 . https://www.ers.usda.gov/topics/food-nutritionassistance/food-security-in-the-us/survey-tools/ . 239 Ibid 240 Ibid 241 United States. United States Department of Agriculture. Economic Research Services. Definitions of Food Security . October 4, 2017 . https://www.ers.usda.gov/topics/foodnutrition-assistance/food-security-in-the-us/definitions-offood-security/.

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High food security: no reported indications of food-access problems or limitations. Marginal food security- one or two reported indications— typically of anxiety over food sufficiency or shortage of food in the house. Little or no indication of changes in diets or food intake. Low food security: reports of reduced quality, variety, or desirability of diet. Little or no indication of reduced food intake. Very low food security: Reports of multiple indications of disrupted eating patterns and reduced food intake.242 These ranges of food security show that it happens on a broad scale, ranging from no indication of food access issues at the one end and disrupted food intake at the lowest end. 243 Another important distinction is between food insecurity and hunger. The main difference between food insecurity and hunger is that food insecurity relates to the social and economic conditions of household whereas hunger describes a physical sensation. 244 Individuals who are food insecure can also be hungry. The difference between food insecurity versus hunger are important concepts because food insecurity could be used as euphemism to blunt the language of hunger and minimize the issue. It is also important to note that people who are food insecure can experience hunger as these are not mutually exclusive. Recommendation 1: Conduct Further Quantitative and Qualitative Research into Food Insecurity

242

Heinz Journal 1.1. Create a Comprehensive Survey Tool to Accurately Measure Collegiate Food Insecurity The first recommended action is to conduct qualitative analysis on campus food insecurity to develop an accurate and comprehensive measure of campus food insecurity. Specifically, in this comprehensive survey (as defined below) to measure collegiate food insecurity could include the following categories: food deserts; kitchen and kitchen supplies; campus facilities; cooking skills; trade-offs, and obligations; quality, quantity, and type of food. The current USDA measure is a good starting point for measuring campus food insecurity. However, this measure does not consider the unique experience of college students and how they may experience food insecurity. Affordability is just one aspect of college food insecurity; another aspect of the problem is having access to affordable nutritious food on campus or close by. For example, the South Oakland neighborhood of Pittsburgh, PA, which houses many students from the University of Pittsburgh, Carnegie Mellon University, Chatham University, and Carlow University, is considered a food desert, even though it has multiple restaurants, bars, and convenience stores. Food Deserts Food desert is defined by USDA using a complicated measure that measures income, transportation, and access to healthy foods. 245 This shows that issues of access to grocery stores from college campuses can also be challenge for students. 246 The issue can extend beyond geographical access, but access to kitchen and cooking supplies to make food.

These other issues, which are not currently measured in the USDA survey, illustrate the need for more qualitative data to accurately measure all forms of campus food insecurity. A food desert is an area of the country that lacks access to grocery stores and other stores that sell fresh foods. One question to think about when evaluating campus food insecurity is about accessibility to grocery stores, such as: ● ● ●

The USDA has a Food Access Research Atlas, and universities can evaluate whether areas their students live, or their campus, are in a low food access according to the census tracts, and how they can remedy it.247 Kitchen and Kitchen Supplies Having access to a kitchen and kitchen supplies can impact a student’s ability to cook or make food and contribute to college food insecurity. Not all student dorms have kitchens; sometimes the only thing students have access to are microwaves, which can make cooking healthy foods hard. Students may not be able to afford kitchen supplies which impacts cooking ability Students, even in apartments, could have limited kitchens. Some examples of questions that could be asked around availability of kitchen and kitchen supplies include: ● ● ● ● ●

245

"Documentation." United States Department of Agriculture Economic Research Services. https://www.ers.usda.gov/data-products/food-accessresearch-atlas/documentation/. 246 McCart, Melissa, Caelin Miltko, Hannah Schwarz, Gabe Rosenberg, Jewell Porter, Amaka Uchegbu, Katerina Sarandou, Amy Brooks, and Pittsburgh Post-Gazette. "Pittsburgh Food Deserts." Mapping Hunger? Where Are Pittsburgh Food Deserts. Accessed May 08, 2018. https://newsinteractive.post-gazette.com/food-deserts/.

How long does it take you to get to a grocery store? How long does it take you to go to place that offers fresh foods? What is your mode of transportation?

●

Do students have access to a kitchen to be able to cook? Do they have a kitchen in their apartments? What supplies do they have? Do their dorms just have microwaves? Do they own pots, pans, and can openers? Do they have a house?

Campus Facilities

247

USDA. "Food access research atlas." (2014).

College Food Insecurity Doing an assessment of campus facilities and student access can highlight different aspects of collegiate food insecurity. One example was highlighted above, regarding how some students not having access to kitchens to cook in the dorm or store food. Many college students in dorms are required to have meal plans, thus it is important to make sure the meal plans are adequate in providing enough food and nutritious food options for students. Studies have found a meal plan did not eliminate student risk of food insecurity, with 43% of students who were food insecure indicating they had a campus meal plan and 46% of respondents indicating that they ran out of meals/meal points before the end of the semester. Additionally, 69% of food insecure students indicated they ate nine or less meals a week at the dining hall. Questions to look into campus facility issues include: ● ● ● ● ● ● ●

Are students running out of meal points? Are there kitchens or refrigerators in the departments on campus? What is the average price of a meal on campus? Can students afford the food? Is there access in campus stores to fresh foods? Does the dining hall offer culturally appropriate food and food that meets students’ dietary restrictions/ allergies? Do students with meal plans, who stay on campus, have access to the dining hall during breaks and over the summer?

● ● ●

Do you know how to cook? Do you have access to your country/ethnic/religious staples that you typically use to cook with? When you eat outside of your home is it most often due to: social gatherings, not knowing how to cook, or lack of time?

Obligations and Trade-offs Obligations and trade-off should be another consideration when thinking about food insecurity. Other studies have measured the obligation that food insecurity causes. For example, Hunger on Campus found food insecurity has academic impacts on students with 32% of food insecure respondents indicating that their housing/food issues have impacted their education. 248 Of the 32%, more than half reported: missing a class, missing a study session, opting not to join an extracurricular activity, not buying a required textbook, and 81% believed they could not perform as well as the could have. 249 Furthermore, 25% of students indicated they had to drop a class.250 Additionally, Feeding America, a leading national organization of food banks, found individuals who are food insecure must make tough trade-offs everyday: 74% had to choose between food and medicine, 59% choose between food and utilities, 67% chose between food and transportation, and 57% chose between food and housing. 251 69% of students

Skills Gaps Another area of investigation to measure collegiate food insecurity is if students have the skills to cook, and if that is a factor contributing to food insecurity. For example, international students may not know how to cook many of the common and accessible foods in the U.S. and may lack access to culturally appropriate staples or ingredients Examples of questions that could be added to collegiate food insecurity assessment include: ●

Does not knowing how to cook prevent you from eating?

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248

Heinz Journal who are food insecure bought the cheapest food even though it was not the healthiest. 252 The above studies ask these questions after a student or individual defines themselves as food insecure. Obligations and trade-offs should be one of the screening questions. While the USDA 6-item short form survey asks about being able to afford food, it does not ask about trade-offs. An individual might have to choose between food or rent, or food or buying a course material. Forgoing food for other expenses makes a student food insecure. Questions measuring these trade-offs should also be used to measure collegiate food insecurity. Other questions to think about include restricting food intake so that it can last longer and provide more meals, or if the respondent is choosing to not eat so that someone else in the family can eat. It is important to think about the different obligations students have (such as providing for other family members) and the different coping mechanisms they may be using to address their own food insecurity (such as parsing out their meal portions). Quality, Quantity, and Type of Food While access to food is part of food insecurity, there also needs to be a consideration of the quality of food students are consuming. This can include access to fresh foods, culturally appropriate food, and quantity of food. Being able to parse out the type of food the students can afford and consuming and being explicit may increase the detection of college food insecurity. Asking specific questions about cheap food or if students are relying on free campus food offered at events as a primary means of food could accomplish this. Stratifying College Hunger It is recommended, therefore, that researchers further build on the different levels and types of 252

food insecurity. The USDA measure of food insecurity includes different types of food insecurity ranging from very low food security to high food security as outlined in the section on measuring food insecurity, showing stratification of hunger. The USDA has developed a survey for youth 12 years and older to measure food insecurity; realizing that different populations may need different forms of measurement. A comprehensive conceptual framework on collegiate food insecurity includes different levels and types of food insecurity. The model must be inclusive, think of the holistic individual, and the way food insecurity can manifest and be defined. It must also allow for overlapping of the archetypes, realizing that students can fall into multiple categories and may have intersectional identities. One way to think about the model is through different archetypes, based on the measures talked about above. 1. Affordability Archetype- This archetype cannot afford food and is currently measured by the USDA 6 item short form. 2. Location Archetype- This archetype has no grocery stores nearby, no car to get to one, or no access to fresh foods therefore they forgo food because have no access or by go to convenience stores or fast food because even though might not be the food they want. 3. Kitchen Archetype- This archetype might not be able to cook food because they lack access to a kitchen and may also struggle to afford to eat outside food. Or can eat food from outside the home, but run out of money, and so restrict the amount they eat to be able to feed themselves throughout the month. 4. Campus Facilities Archetype â&#x20AC;&#x201C; This archetype might run out of dining dollars, might not have food in the dining hall they need, or the hours of dining services might not work for their class schedule. This archetype will struggle given their income to have an

College Food Insecurity affordable on campus dining option whether they are on or off campus. The facilities and structures inhibit low income students from being able to eat on campus affordably. 5. Skill Archetype – These archetype lacks the skills to cook or the skills to cook with the ingredients they have access to. This type faces similar challenges to the kitchen type so may this person may rely on ready-made food of a lower quality then they would like or rely on food outside the home. 6. Obligations Archetype - This archetype may lack money for food because they need to make tough tradeoffs to afford other expenses these can be things like educational materials, transportation, rent, health, or childcare expenses. So, they forgo the purchase of food not necessarily because they cannot afford it, but because they cannot afford it along with other expenses. 7. Food Choice Archetype - This archetype does not have access to foods that meet their cultural, dietary, or health restrictions. This archetype may also struggle with the quality of food such as subsisting on ramen in the case of college students. To cope this archetype might still be able to eat but restrict the amount the eat so it will last or restrict so others can eat. This conceptual framework can help define different types of college food insecurity and different levels. Knowing exactly how students experience food insecurity can lead to better interventions to address the problem. Additionally, a broader concept of how food insecurity can manifest that includes the above areas mentioned allows for a more correct definition. More students who are food insecure can be included. This model is just a start, but measures can be developed using qualitative assessment of student and running measures on test groups to test validity and improve measures.

1.2. Test Validity of Measures and Improving Questions Through Qualitative Analysis History of USDA Measurement Understanding the history of the USDA food insecurity measures can give researchers ideas on how to acquire more effective college food insecurity data. The history of obtaining a measure of hunger began in the late 1960s, largely spurred by the CBS television documentary ‘Hunger in America’.253 In the 1960s, the government began expanding programs to address this issue, 254 and in the 1980s the Task Force on Food Assistance was established. They were the first to look at issues around terminology when it came to hunger. 255 The task force made a distinction between the medical definition of hunger and the social/economic conditions used to think about food insecurity today. 256 The task force, when looking at hunger in America, did not find evidence of malnutrition (except in the case of homelessness) but did find evidence of hunger, which is how we define food insecurity today. 257 The task force called for better definitions, a measurement instrument, and the collection of federal data around hunger. 258 This led to many non-profits and the U.S. government to invest in test instruments to measure hunger.259 In 1990, under the National Nutrition Monitoring and Related Research Act, a commission was established to come up with a measurement for food insecurity. The first survey, was released in April 1995 as part of a supplement to the Current Population Survey (CPS).260 The measure has since been adjusted

253

National Research Council. Food insecurity and hunger in the United States: An assessment of the measure. National Academies Press, 2006. https://www.nap.edu/read/11578/chapter/4 254 Ibid Chapter 2 255 Ibid 256 Ibid 257 Ibid 258 Ibid 259

Ibid United States. United States Department of Agriculture . Economic Research Services . History and Background 260

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Heinz Journal and validated by Committee on National Statistics (CNSTAT) of the National Academies.261 The recommendations of this panel concentrated on the issues of hunger vs. food insecurity, the appropriateness of the definition of hunger, and the accurate representation of the relationship between food insecurity and hunger. 262 As result of the recommendations, the USDA uses the words ‘low food security’ and ‘very low food security’ to replace ‘food insecurity without hunger’ and ‘food insecurity with hunger,’ respectively.” 263 Thus, based on the above historical example, the second recommended action is to test out survey questions and instruments based on the qualitative analysis that are thought to accurately measure college food insecurity. These measures should be tested and adjusted for validity. Qualitative Analysis Comprehension of the current qualitative definitions is lacking, food insecure students might not recognize they are food insecure. In a recent article from the New York Times, an undergraduate student at George Washington University described her experience as, “I’m not going hungry per se, but there are days I’m just not going to eat. Today, I am kind of hesitant to buy food, because I have less than $100 and I need to do laundry.”264 Additionally, in Sara Goldrick-Rab’s mixed methods Wisconsin Longitudinal study one student described his experience, “Sometimes we don’t have enough to eat, but I just like I’m used to that. I’m used to not eating a lot so… another person might find it a problem but to me, it’s not, because I’m used

. October 4, 2017 . https://www.ers.usda.gov/topics/foodnutrition-assistance/food-security-in-the-us/survey-tools/. 261 Ibid 262 Ibid 263 Ibid 264 Dewey, Caitlin. "The Hidden Crisis on College Campuses: Many Students Don’t Have Enough to Eat." Washington Post, April 3, 2018. https://www.washingtonpost.com/news/wonk/wp/2018/04/ 03/the-hidden-crisis-on-college-campuses-36-percent-ofstudents-dont-have-enough-toeat/?noredirect=on&utm_term=.185defd8ecbb.

to.” 265 To many students this may be what they are used to, or continuation of their childhood experience, and so may not see themselves as food insecure. Knowing this information can help inform survey questions that capture the lived experience of students every day. Furthermore, mixed methods analysis like that done by Sara Goldrick-Rab, helps policymakers make informed decisions. Documenting the lived experience can capture things that do not fit neatly into boxes or questions on a survey. It can also allow research to capture new or emerging trends that are happening. Introducing qualitative analysis such as in person interviews and focus groups can capture important information surveys leave out, and make food insecurity more personal. 1.3. Standardize the Measurement for Cross National Comparison Current College Food Insecurity Statistics, Studies, and Limitations The current limitations of college food insecurity studies and statistics illustrate the need for standardization of a measurement for cross comparisons once a valid measure is established. College food insecurity is prevalent throughout the United States and varies by study. A Table displays different results below.

265

Goldrick-Rab, Sara. Paying the price: College costs, financial aid, and the betrayal of the American dream. University of Chicago Press, 2016. pg 128

College Food Insecurity

Study

Findings

Hunger Report266

1 in 10 clients are college students

Hunger

on 22% of respondents experienced lowest levels of food insecurity

Campus267

13% of community College students were homeless 50% of community college respondents were food insecure 47% of those from four year institutions were food insecure

Urban Institute 268

11.2% of students in 4 year institutions were food insecure 13.5% of students in vocational institutions were food insecure

UC Systems 269

42% of their Students were food insecure

Systematic

35% average in gray literature

Review 270

42% in peer reviewed literature

266

America, Feeding. "Hunger in America 2014: executive summary." (2014). Dubick, James, Brandon Mathews, and Clare Cady. "Hunger on campus: The challenge of food insecurity for college students." College and University Food Bank Alliance. Retrieved from http://studentsagainsthunger.org/wpcontent/uploads/2016/10/Hunger_On_Campus.pdf (2016). 268 Blagg, Kristin, Craig Gundersen, Diane Whitmore Schanzenbach, and James P. Ziliak. "Assessing Food Insecurity on Campus." Urban Institute. Retrieved from: https://www.urban.org/sites/default/files/publication/92331/assessing_food_insecurity_on_campus_3.pdf (2017) 269 Martinez, Suzanna, Katie Maynard, and Lorrene Ritchie. Student food access and security study. Nutrition Policy Institute. Retrieved from: http://regents.universityofcalifornia.edu/regmeet/july16/e1attach.pdf (2016). 270 Bruening, Meg, Katy Argo, Devon Payne-Sturges, and Melissa N. Laska. "The struggle is real: a systematic review of food insecurity on postsecondary education campuses." Journal of the Academy of Nutrition and Dietetics 117, no. 11 (2017): 17671791. 267

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Heinz Journal Overall, it is hard to have an accurate account of what the rates of college food insecurity are and how much they differ from one institution to another. There are positive and negatives with each of the surveys referenced throughout this paper. The Urban Institute used the CPS (Current Population Survey) , which may be limited because it is normally the head of household that fills them out. While it may not capture the entire picture and spectrum of college food insecurity, it also may show a more representative sample since it looks at households across the country. The Campus Hunger Survey data, and other campus surveys, may suffer from self-selection bias that skews data, has low response rates, and is not generalizable to the general population. On the other hand, institutional surveys, and surveys across campuses, may be a better indicator than CPS data, since it can survey people who were missed in the CPS survey. Another way to look at the data is by analyzing pantry usage, and creating a survey to address this population, as one in ten foodbank clients are students, that data may leave out students who are outside of Feeding Americaâ&#x20AC;&#x2122;s Membership network, or students who do not utilize pantries. Based on current research and its limitations it is a safe estimate that college food insecurity rates are somewhere between 10%- 50%. Two recommended actions to combat the limitations in the data are derived from this analysis: First, the need to establish a standardized measure that all researchers can use to compare data. Second, conduct national surveys, such as through the National Post-Secondary Survey, to get an accurate representation of how large the problem is on a national scale. Recommendation 2: Increase Reach of Demographic Research 2.1. Increase Demographic Research to Respond to Unique Needs Demographics Overview While the current data has limitations, it still reveals some demographic patterns of those who experience food insecurity. However, there are some groups no explicitly included in the existing

research, particularly international students, graduate students, student parents, and those in private colleges. Studying these groups and learning about their unique obstacles and challenges can give institutions and policymakers information to address what unique needs they have. Leaving out these populations limits what is known, ignores significant portions of collegegoing students in the United States. Students have many identities, environments, and challenges; understanding their constraints and challenges gives insight into what types of food insecurity they are facing and may provide better ways to address their food insecurity. Race There has been a lot of research done into the impact of race on food insecurity. Demographic data obtained from the College Hunger survey showed that white students experienced the lowest rates of food insecurity, followed by Asian students, Latino students, and Black students.271 Students of color experience food insecurity at a higher rate than their white and Asian peers, including Native American or indigenous students, multi-racial students,272 and black and Latino students (approximately 59% and 60% of all Latino and Black students, respectively) 273 Overall, the studies above indicate that Black, Latino, and Native American students experience the highest rates of food insecurity. Low Income The existing research has been intentional to address the impact of low socio-economic status

271

Dubick, James, Brandon Mathews, and Clare Cady. "Hunger on campus: The challenge of food insecurity for college students." College and University Food Bank Alliance. Retrieved from http://studentsagainsthunger.org/wpcontent/uploads/2016/10/Hunger_On_Campus.pdf (2016). 272 Blagg, Kristin, Craig Gundersen, Diane Whitmore Schanzenbach, and James P. Ziliak. "Assessing Food Insecurity on Campus." Urban Institute. Retrieved from: https://www.urban.org/sites/default/files/publication/92331/as sessing_food_insecurity_on_campus_3.pdf (2017) 273 UCOP Institutional Research. Global Food Initiative: Food and Housing Security at the University of California. Institutional Research and Academic Planning. December 2017. https://www.ucop.edu/global-foodinitiative/_files/food-housing-security.pdf

College Food Insecurity on food insecurity. The data from the College Hunger study also showed that first generation college students are more likely to experience low or very low food insecurity compared to students who had a least one parent attend college. 274 Additionally, the study found that 52% of respondents who identified as food insecure received a Pell grant, an indicator of household low income.275 In the UC study of the food insecure students, 57% were food secure as a child versus 43% who were not, indicating some students are new to the experience of being food insecure, and276 51% of students come from lowincome backgrounds of under $20,000. 277 There is a 14-point national completion gap between Pell recipients and those who do not receive Pell grants. High Pell density correspond with lower outcomes. Being low-income, first generation, or a Pell recipient puts students at risk for food insecurity. Students with lower socioeconomic status are less likely to complete college, with only 14% completing college in 8 years compared to 29% of middle-class students278 Even controlling for test scores, a gap still exists in completion rates. 279 Low income students also enroll at lower rates with 54% enrolling compared to 69% of higher income students.280 Students who attended high 274

Dubick, James, Brandon Mathews, and Clare Cady. "Hunger on campus: The challenge of food insecurity for college students." College and University Food Bank Alliance. Retrieved from http://studentsagainsthunger.org/wpcontent/uploads/2016/10/Hunger_On_Campus.pdf ( 275 Ibid 276 UCOP Institutional Research. Global Food Initiative: Food and Housing Security at the University of California. Institutional Research and Academic Planning. December 2017. https://www.ucop.edu/global-foodinitiative/_files/food-housing-security.pdf 277 CLASP. "College Students Aren't Who You Think They Are." Center for Law and Social Policy. June 2017. https://www.clasp.org/sites/default/files/publications/2017/08/ 2017June_CollegeStudentsArentWhoYouThinkTheyAre.p 278 "Addressing the College Completion Gap Among LowIncome Students." College for America. June 7, 2017. http://collegeforamerica.org/college-completion-low-incomestudents/. 279 Addressing the College Completion Gap Among LowIncome Students." College for America. June 7, 2017. http://collegeforamerica.org/college-completion-low-incomestudents/. 280 Ibid

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poverty high schools (defined as 75% of the student population is eligible for free and reduced price lunches281 and who had a higher population of minority students also had lower 4-year college enrollment and lower completion rates in college versus low minority schools 282), enroll in college at lower rates and completed college at lower rates than students who attended low poverty schools. 283 Obstacles students face to graduation are not only being able to afford college, but also the struggle with impostor syndrome. 284 “Significant disparities of wealth between students at the elite private college heightened awareness of class, and led to feelings of intimidation, discomfort, inadequacy, deficiency, exclusion, and powerlessness among lower income students, feelings that were less prevalent among state college students.” 285 First generation students may lack some of the cultural capital and understanding that upper and middleclass families have. Colleges and universities tend to be designed around upper/middle class value and have more of a focus on independence (promoted in upper /middle class families) than an familial or group focus (seen more in working class families).286 First-generation students are also likely to experience “breakaway guilt” since they often feel like they are pulling away from their family and even develop two identities one when they are at college and one when they are with their family. 287

281

NSC Research Center. "National College Progression Rates." National Student Clearinghouse Research Center. October 27, 2016. https://nscresearchcenter.org/hsbenchmarks2016 282 Addressing the College Completion Gap Among LowIncome Students." College for America. June 7, 2017. http://collegeforamerica.org/college-completion-low-incomestudents/. 283 Ibid 284 Bui, Quctrung. "Hidden Side of the College Dream." New York Times , June 1, 2016. https://www.nytimes.com/2016/06/02/upshot/why-collegestudents-drop-out-follow-the-dollars.html?_r=1. 285 Aries, Elizabeth, and Maynard Seider. "The interactive relationship between class identity and the college experience: The case of lower income students." Qualitative Sociology 28, no. 4 (2005): 419-443. 286 Banks-Santilli, Linda. "First-Generation College Students and Their Pursuit of the American Dream." Journal of Case Studies in Education 5 (2014). 287 Ibid

Heinz Journal Additionally, there is little qualitative data of lowincome students in elite private college and how to combat feelings of exclusion and inadequacy can make it hard for students to receive assistance. Private colleges tend to have less resources for low income students since their Pell recipient enrollment tends to be smaller than community and public colleges. 288 Therefore, one demographic in which more intensive data should be collected is of low-income students at elite private universities who struggle to meet their basic needs. Student Parents The study by the Urban Institute found that students with a child in the household experienced slightly higher rates of food insecurity at 14% than those without a child in the household which had a 12% food insecurity rate. 289 Nontraditional students are becoming more typical than those who attend college right after high school, and many students are taking care of dependents and have additional responsibilities. 290 A recent study on Southwest Regional Pennsylvania found that parents experienced a rate of food insecurity of 39%, which was above the 29% overall food insecurity rate in the region. 291 These studies highlight that more research on parents should be done. Specific things that can be investigated for parents is if they are forgoing food for their children or if they are able to afford things such as childcare or baby supplies. Knowing this can help

craft policy and institutional solutions to obstacles food insecure parents are facing. PostGraduate Students The UC survey collected more demographic data than either of the two surveys conducted above on student demographics. They found that undergraduates experience higher rates of food insecurity at 48% as opposed to 25% of graduate students.292 The Southwest PA Regional Campus Cupboard survey looked at graduate students and found the rate for master student food insecurity was 30%, and for PhD students it was 23%.293 This study was one of the few which included graduate students which is a demographic should be studied more since three million students are graduate students.294 International Students An additional demographic that needs to be looked at are international students. The studies above mention international students but do not do a break down the rates of food insecurity or their lived experience. “‘We serve a fair number of international students, especially international graduate students, who are on fixed incomes because of their assistantship and visa restrictions,’ College and University Food Bank Alliance co-founder Nate Smith-Tyge said.” 295 International students in the Southwest PA Regional study were found to experience food

288

Chetty, Raj, John N. Friedman, Emmanuel Saez, Nicholas Turner, and Danny Yagan. Mobility report cards: The role of colleges in intergenerational mobility. No. w23618. National Bureau of Economic Research, 2017. http://www.equality-ofopportunity.org/assets/documents/coll_mrc_summary.pdf 289 Blagg, Kristin, Craig Gundersen, Diane Whitmore Schanzenbach, and James P. Ziliak. "Assessing Food Insecurity on Campus." Urban Institute. Retrieved from: https://www.urban.org/sites/default/files/publication/92331/as sessing_food_insecurity_on_campus_3.pdf (2017) 290 CLASP. "College Students Aren't Who You Think They Are." Center for Law and Social Policy. June 2017. https://www.clasp.org/sites/default/files/publications/2017/08/ 2017June_CollegeStudentsArentWhoYouThinkTheyAre.p 291 Cross, Amanda. "Needs Assessment of Collegiate Food Insecurity in SW Pennsylvania: The Campus Cupboard Study." January 2018. https://pasfaa.org/docs/outreach/CSF2018_CampusCupboard Study.pdf.

292

UCOP Institutional Research. Global Food Initiative: Food and Housing Security at the University of California. Institutional Research and Academic Planning. December 2017. https://www.ucop.edu/global-foodinitiative/_files/food-housing-security.pdf 293 Cross, Amanda. "Needs Assessment of Collegiate Food Insecurity in SW Pennsylvania: The Campus Cupboard Study." January 2018. https://pasfaa.org/docs/outreach/CSF2018_CampusCupboard Study.pdf. 294 United States. Institute for Educational Sciences. National Center for Education Statistics. Postbaccularate Enrollment. https://nces.ed.gov/programs/coe/indicator_chb.a sp 295 Kennedy, Brigid. "New report finds food insecurity is a problem on college campuses." The State News , October 24, 2016. http://statenews.com/article/2016/10/food-insecurityon-campus.

College Food Insecurity insecurity at a 29% rate.296 International students also face other obstacles, such as ineligibility for SNAP and other kinds of assistance (such as need based financial aid from the government) that are available to domestic students. Lesbian, Gay, Bisexual, Trans* (LGBT) Students Lesbian, Gay, Bisexual, Trans* (LGBT) students have not been studied in-depth. In fact, only one study identified looks at college food insecurity as it relates to LGBT students. The UC Housing and Food Insecurity study which found more than 51% of LGBT student experienced food insecurity. 297 Some of the reasons LGBT students could be experiencing higher rates of food insecurity could be due to disownment from family when they come out, a similar reason many LGBT youth experience higher rates of homelessness. 298 National surveys have shown that LGBT people experience higher rates of food insecurity than the general population. 299 This group of students needs to be studied further so that their unique needs and challenges can be better addressed by institutions and public policies. Two-Year Colleges and Private Universities Students at two-year colleges experienced the highest rates of food insecurity. 300 Students who go to part-time or a four-year institution are 296

Cross, Amanda. "Needs Assessment of Collegiate Food Insecurity in SW Pennsylvania: The Campus Cupboard Study." January 2018. https://pasfaa.org/docs/outreach/CSF2018_CampusCupboard Study.pdf. 297 UCOP Institutional Research. Global Food Initiative: Food and Housing Security at the University of California. Institutional Research and Academic Planning. December 2017. https://www.ucop.edu/global-foodinitiative/_files/food-housing-security.pdf 298 "LGBT." Youth.Gov. https://youth.gov/youthtopics/runaway-and-homeless-youth/lgbt. 299 Brown, Taylor NT, Adam P. Romero, and Gary J. Gates. "Food Insecurity and SNAP Participation in the LGBT Community." (2016). https://williamsinstitute.law.ucla.edu/wpcontent/uploads/Food-Insecurity-and-SNAP-Participation-inthe-LGBT-Community.pdf 300 Blagg, Kristin, Craig Gundersen, Diane Whitmore Schanzenbach, and James P. Ziliak. "Assessing Food Insecurity on Campus." Urban Institute. Retrieved from: https://www.urban.org/sites/default/files/publication/92331/as sessing_food_insecurity_on_campus_3.pdf (2017

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significantly more likely to experience food insecurity than those who attend college fulltime.301 Students attending a four-year private institution experienced the lowest rates of food insecurity. 302 However, much of the existing research has only sampled community and public universities with only small sample sizes for private universities. Understanding the unique obstacles these subgroups face can help universities and governments respond to the issue in a way that will be effective and helpful especially since 6.1 million students attend two colleges and about 3.8 million student attend private universities for their undergraduate education. 303

2.2. Using Qualitative Assessment to Measure Issues Relating to Stigma so that Design of The Intervention Can be Responsive Sociological Research on College Hunger: An Invisible Population As the prior section made evident, there are unique stigma and barriers that first generation and lowincome college students face when seeking assistance for basic needs. However, many college students across different demographic groups face stigma. The stigma of receiving assistance further impacts the invisibility of college hunger. The stigma stems from the idea of the â&#x20AC;&#x153;American Dreamâ&#x20AC;? of the idea that anyone can succeed if you just work hard or that you must pull yourself up by your bootstraps. 304 So, if someone needs assistance it is shameful since a lot of people internalized this message, they think it is something they have done. There is also this idea of self-sufficiency and 301

Ibid Ibid 303 United States. Institute for Educational Sciences. National Center for Education Statistics. Undergraduate Enrollment. https://nces.ed.gov/programs/coe/indicator_cha.a sp. 304 Johnson, Dana. "In college and food insecure: An invisible population." Master's thesis, Durham University , 2011. http://www.academia.edu/18537195/In_college_and_food_ins ecure_An_invisible_population 302

Heinz Journal resistance to taking a handout because it is seen as failure.305 Pride, blame, and shame are common themes found in college food pantry users because of these attitudes. 306 There is also a pressure within college communities to keep up outside appearances to mask that something might be wrong. Thus, stigma, shame, pride, and blame all impact the usage of college pantries and identifying food insecure students.307 This helps to hide the scope and depth of college food insecurity. The above sociological research illustrated the need for more qualitative research that examines student attitudes and perceptions on food insecurity can help to better target interventions and combat stigma through marketing and educational events so that it reaches students who are most in need. One commonality between college food insecurity studies is the lack of open-ended survey questions. These questions were either designed as yes or no or a list of options. One of the concerns when measuring effects like this is there is no room for students to share other things they may be experiencing or to list an option which may not be there. When the effects are already defined in survey questions it does not leave room for researchers to find out about the other effects of student hunger especially psychological. Therefore, designing more qualitative instrument to measure the impact of student food insecurity either through one on one interviews or openended questions may be able to reveal new findings of how students are coping. The benefit of knowing this information can help practitioners better address solutions that will be effective for students. Recommendation 3: Identification of Institutional Responsibilities and Awareness Campaigns

305

Ibid Ibid 307 Johnson, Dana. "In college and food insecure: An invisible population." Master's thesis, Durham University , 2011. http://www.academia.edu/18537195/In_college_and_food_ins ecure_An_invisible_population 306

3.1. Test the Interventions

Effectiveness

Current

Proliferation of Food Pantries, Student Activism, and Institutional Responses Current institutional responses will now be examined. College food pantries have increased over the years. In 2009, only nine college food pantries in the U.S. were operating; today there are 596.308 Higher education institutions, and students, have been responding to the rise of student food insecurity in other ways besides just pantries. A national organization called Swipe Out Hunger, teams up with campus dining services to donate food, meal swipes, and dining dollars to students in need.309 Two other campus organizations, Campus Kitchen Project and Food Recovery Network, work on diverting food waste to those in need both on campus and the community. 310 The College and University Food Bank Alliance (CUFBA) is another organization that has helped to connect college pantries to each other and share information.311 Challah for Hunger, which has many campus chapters, has taken on campus hunger projects but also donates to other hunger relief organizations.312 Share Meals is an app that helps connect students with leftover food from events, and also connect to students with extra meal swipes.313 Students at the University of Pittsburgh have developed Facebook groups as

308

Greater Pittsburgh Community Food Bank. College Students and Hunger. Retrieved September 23, 2017, from https://www.pittsburghfoodbank.org/college-students-andhunger / and "Members." College and University Food Bank Alliance. February 23, 2018. https://sites.temple.edu/cufba/members/. 309 "Swipe Out Hunger." Swipe Out Hunger. http://www.swipehunger.org/ 310 "What is a Campus Kitchen?" The Campus Kitchens Project. Accessed February 2018. https://www.campuskitchens.org/how-we-do-it/. & "About." Food Recovery Network. Accessed February 2018. https://www.foodrecoverynetwork.org/aboutus/. 311 "About Us." College and University Food Bank Alliance. Accessed February 2018. https://sites.temple.edu/cufba/aboutus/. 312 "The Campus Hunger Project." Challah for Hunger. Accessed February 2018. https://challahforhunger.org/campushungerproject/. 313 "Share Meals." Share Meals. Accessed February 2018. https://sharemeals.org/.

College Food Insecurity Unused Market Swipes and the Pitt Food Share.314 Other colleges have similar groups on their campus pages to connect peer-to-peer. 315 Institutions have also been responding to this increasing need by offering services and conducting research around college food insecurity, which was not data being collected until recently. For example, the University of California System conducted a survey across all 10 university campuses to assess hunger and the California State System conducted a similar study.316 Another example is a recently created research lab called the Wisconsin-Hope Lab, which studies issues of hunger and affordability in higher education. 317 Many university presidents signed onto PUSH, or Presidents United to Solve Hunger, a pledge developed by Universities Fighting World Hunger. The pledge makes ending hunger a core value in higher education. 318 Overall, these are just some responses students and institutions have been taking to solve college food insecurity and is by no means extensive. This shows that university administration and enrolled students recognize the importance of education and are willing to provide a community of support and resources to address college food insecurity. One of the challenges to institutional responses is measuring their impact and effectiveness. The Wisconsin Hope Lab, an organization dedicated to understanding the challenges in college access and persistence, offers some suggestions and guidance for conducting Randomized Controlled Trials (RCT) to measure the effectiveness of an

314

"Pitt FoodShare." Pitt FoodShare Public Group. Accessed February 2018. https://www.facebook.com/groups/pittfoodshare/?ref=bookm arks. And "Unused Market Swipes." Accessed February 2018. https://www.facebook.com/groups/686217994826795/. 315 "RIT Foodshare ." Facebook . Accessed February 2018. https://www.facebook.com/groups/ritfoodshare/about/. 316 "Basic Needs Initiative ." The California State University. https://www2.calstate.edu/impact-of-the-csu/studentsuccess/basic-needs-initiative. & â&#x20AC;&#x153;Student Food Access Studyâ&#x20AC;? University of California, 2016 317 "Wisconsin HOPE Lab." Wisconsin HOPE Lab. Accessed February 2018. http://wihopelab.com/. 318 Presidents United to Solve Hunger. Accessed February 2018. http://wp.auburn.edu/push/.

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intervention. 319 This can work for some interventions that happen on a small scale or are limited from funds like a voucher program. However, testing the effectiveness and impact of a pantry is more difficult. An RCT would be unethical for a pantry because anyone who is eligible and in need of the service should be eligible to use it. Food pantries which partner with local foodbanks often have restrictions and laws which prevent them from turning people away or discriminating against people. Many food pantries are required to publicly post their hours. It is difficult to conduct an RCT without controlling who utilizes the food pantry. Other obstacles to an RCT would be identifying the difference between two populations: the ones that use the food pantry (easy to identify) vs students who are food insecure and do not use the food pantry (harder to identify). If they were identified, administrators and researchers would be ethically required to connect students with resources. There also may be some self-selection bias or another compounding factor between the two groups. A better method to measure effectiveness would be an observational study or cross-comparison study. One way to deal with issues identifying the two groups (the ones that use the food pantry vs. students who are food insecure and do not use the food pantry) would be by using an end of year campus wide survey that asked food insecurity measurement questions along with questions about current pantry usage. Then, measure outcomes to compare the two groups and any subgroups. Another option can be to conduct an initial intake survey at a pantry that measures food insecurity and then to measure the level of food insecurity upon next entrance to the pantry to see if it improved. Overall, institutions should measure outcomes to see if their interventions are effective. Institutions

319

Goldrick-Rab, Sara, Jed Richardson, and Peter Kinsley. "Guide to assessing basic needs insecurity in higher education." Madison, WI: University of Wisconsin, Wisconsin HOPE Lab (2017). Pg. 12-14 http://wihopelab.com/publications/Basic-Needs-InsecurityCollege-Students.pdf

Heinz Journal should do multilayered assessments that not only measure effectiveness of the intervention, but also measure overall perceptions, understanding of food insecurity, and overall campus need. The assessment should be mixed methods so that responses are not limited but can also be standardized and consistent. 3.2. Conduct Macro-Level Research to Investigate Macro Level Factors that Could be Impacting Food Insecurity Economic Trends, the Changing College Student, and the Proliferation of Student Food Insecurity In looking for solutions to combat collegiate food insecurity, it is important not just to look at the micro-level individual experience but look at large macro level factors that can help to explain current conditions. The characteristics of college students have been changing. In fact, only 37% of students have the traditional college experience of attending a four institution directly after high school.320 The changing economy demands more education of students; 99% of jobs created since the Great Recession have been filled by those with more than a high school education. 321 Millennials are the best educated generation with 34% attaining a bachelor’s degree or higher.322 There is a huge economic cost for those not continuing their education. Compared to high school graduates, those with bachelor’s degrees experience lower unemployment and poverty rates. 323 Additionally, those with a bachelor’s degree earn on average median salary $17,500 more that those who are without college experience. These gaps have been widening, making the cost of not attending college higher than it was for earlier generations. 324

320

CLASP. "College Students Aren't Who You Think They Are." Center for Law and Social Policy. June 2017. https://www.clasp.org/sites/default/files/publications/2017/08/ 2017June_CollegeStudentsArentWhoYouThinkTheyAre.p 321 Ibid 322 Taylor, Paul, Rick Fry, and Russ Oates. "The rising cost of not going to college." Pew Research Center. Retrieved from: http://www.pewsocialtrends.org/2014/02/11/the-rising-costof-not-going-to-college/# (2014). 323 Ibid 324 Ibid

As the value of higher education has increased state spending has declined, raising public school tuition. There was a $9 billion decrease in state budgets from 2008 –2017 after adjusting for inflation.325 49 states had budgets in 2017 below their 2008 levels after adjusting for inflation. The average states spend 16% less per student in 2017 versus 2008.326 In eight states funding fell by more than 30% from 2008 to 2017. 327 Annual tuition of state public institution rose by 35% since 2008 school year. The rising cost of tuition has grown faster than income. 328 State have been increasing their share of merit-based aid as opposed to need based aid with the share raising from 10% in the 1990s to 24% as of 2015.329 State on average only covered 8% of tuition. 330 Other financial factors impacting students include cost of attendance calculations and the structure of Free Application for Federal Student Aid (FAFSA). Living expenses in the cost of attendance estimates for new college students have been increasing; between 50%-80% of college cost increases where due to non-tuition expenses. 331 Additionally, if the cost of attendance estimate is inaccurate it puts low-income students at most financial risk.332 Changing the cost of attendance is a time -consuming process involving a lot of paperwork and proof the measures are accurate. 333 Other factor is the administration of FAFSA, which can be difficult and complicated for firstgeneration college students to navigate. 334 Also Expected Family Contributions, part of the FAFSA form, cannot be lower than zero, which does not accurately capture the 52% of students

325

Mitchell, Michael, Michael Leachman, and Kathleen Masterson. "A Lost Decade in Higher Education Funding." Center on Budget and Policy Priorities. August 23, 2017. https://www.cbpp.org/research/state-budget-and-tax/a-lostdecade-in-higher-education-funding 326 Ibid 327 Ibid 328 Ibid 329 Ibid 330 Ibid 331Goldrick-Rab, Sara. Paying the price: College costs, financial aid, and the betrayal of the American dream. University of Chicago Press, 2016.pg 40-41 332 Ibid Chapter 2 333 Ibid 334 Ibid.

College Food Insecurity who are giving money to their families while they are attending college. 335 Overall, further study of macro-level factors such as the issues highlighted in this section can help policy-makers develop proposals to update federal laws and programs to make them responsive to the issue of college food insecurity and the affordability crisis. Current research has focused on individuals and institutions, but investigating macro-level factors could show some more widespread policy or societal issues or trends that are impacting collegiate food insecurity.

interventions that will be effective or create new interventions that may be more effective. Lastly, making all the improvement to this data will all for researchers to conduct macro-level research to investigate macro level factors that could be impacting collegiate food insecurity.

Conclusion In conclusion, college food insecurity is a relatively new research topic that is just beginning to be explored. The current data and research provide a good foundation for future studies and a general understanding of the issue. This paper highlights current research around college food insecurity. Included are multiple recommends in areas for further study, where there are research gaps, and ways of improvement for the data collection around college food insecurity. To get the full scope of the problem of comprehensive survey tools accurately measure collegiate food insecurity and its many manifestations. To improve current research it is necessary to test validity of current measures in the context of collegiate food insecurity and improve questions through qualitative assessments that reveal the lived experience. Standardizing the measurement of collegiate food insecurity will allow for cross national comparison so that national scope of the problem can be assessed for potential macrolevel solutions to the problem. Increasing demographic research will help institution respond to unique needs of students from background who may be facing unique barriers. Current intervention should be tested for effectiveness of current interventions. Qualitative assessment can be used to measure issues relating to stigma to design to improve current Wisconsin HOPE Lab. What Weâ&#x20AC;&#x2122;re Learning: Student Financial Contributions to Families. January 2016. http://wihopelab.com/publications/Wisconsin HOPE Lab Data Brief 16-02 - Student Financial Contributions to Families.pdf. 335

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Heinz Journal

What’s Next for the Philanthropic Commitments Model Ryan Rydzewski Carnegie Mellon University – H. John Heinz III College of Public Policy and Information Systems

Introduction On a warm spring day in 2016, officials from around the country gathered in Google’s office complex in Pittsburgh. There was the city’s mayor and the county executive. There was the delegation from the White House, including then-President Obama’s top education advisor. There was the team from Chevron and the heads of a half-dozen foundations. There were the students, too: the musicians on stage, the sixthgrade fashion designer, the high-school filmmaker, the future pilot, and more than one aspiring engineer. They had come to kick off Remake Learning Days, a festival billed as the world’s first and largest “open house” for innovative teaching and learning — think South by Southwest, but for kids and families. For the next seven days, greater Pittsburgh’s schools, museums, libraries, startups, and others would host several hundred events featuring digital-age learning: drones in classrooms, synthesizers in libraries, robots in makerspaces, and more. But first, Gregg Behr had an announcement to make. Remake Learning — the network of some 500 nonprofits and educators behind the festival — was barely a decade old and employed just two staff members. Despite these limitations, Behr told the crowd, Remake Learning had secured an astonishing $25 million in philanthropic commitments from foundations, government agencies, and businesses. More than 100 organizations had stepped in to contribute to the network’s efforts, whether by providing financial support, expanding their programming, or both. “It was an astronomical number,” recalls Behr, the network’s co-chair. “The Google event is

when we knew [Remake Learning] had reached critical mass.” 336 Key to the network’s fundraising was a model known informally among users as the “commitments model” — the philanthropic practice of securing both monetary and in-kind support from a broad base of stakeholders. Developed by former President Clinton and later adopted by the Obama White House, the model was used for more than a decade before disappearing at the national level. This paper explores the model’s origins, its successes, and the convergence of factors that led to its abandonment, arguing that while the model may be incompatible with the current administration and the national political climate, it can still be useful in more localized environments. It offers a case study in Remake Learning — a regional changemaker that successfully deployed the model at a smaller scale — and concludes with insights into how the model might be replicated elsewhere. What is the Commitments Model and How Did it Evolve? The commitments model was pioneered by the Clinton Global Initiative (CGI), an experimental arm of The Clinton Foundation launched in 2005. More convener than grantmaker, CGI’s membership — comprised of governments, international corporations, major foundations, and others — paid dues to access CGI’s “platform”: a mix of services and benefits that included philanthropic advising, partnership

“Interview with Gregg Behr.” Interview by author. June 21, 2017. 336

Philanthropic Commitments Model opportunities, and invitations to CGI’s annual summit. According to Bloomberg News, “CGI is widely credited with creating a new framework for giving and action, convening powerful figures from government, business, and charities to address global problems. Members would pay for the privilege to meet and brainstorm solutions, then make financial commitments, often multi-year plans costing tens of millions of dollars.” 337 By CGI’s own admission, the model was unusual. "Whoever heard of paying a membership fee to be able to spend more money or spend more time?” asked Bill Clinton at the Institute’s final summit in 2016. 338 But it was also effective: Between 2005 and 2016, CGI’s members made more than 3,500 commitments worth more than $125 billion, affecting 430 million people in 180 countries. According to Fortune, these commitments resulted in $300 million to develop new vaccines and medicines; better maternal and childcare for more than 100 million people; and treatment for tens of millions of people suffering from topical diseases. 339 At the peak of CGI’s fundraising prowess, commitments poured in from the Warren Buffetts, Bill Gateses, and Richard Bransons of the world, not to mention heads of various states and the Clinton clan itself. Among its members, 337

Talev, Margaret, and Bill Allison. "Clinton Global Initiative Ends With Some of Shine Worn Off." Bloomberg.com. September 19, 2016. Accessed August 08, 2018. https://www.bloomberg.com/news/articles/2016-0919/clinton-global-initiative-ends-run-with-some-of-shineworn-off 338 Phillip, Abby. "Bill Clinton Forcefully Defends His Foundation at the Final Clinton Global Initiative Meeting." The Washington Post. September 21, 2016. Accessed August 08, 2018. https://www.washingtonpost.com/news/postpolitics/wp/2016/09/21/bill-clinton-forcefully-defends-hisfoundation-at-the-final-clinton-global-initiative-meeting/ 339 Mukherjee, Sy. "What Bill and Hillary Clinton's Controversial Foundation Actually Does." Fortune. August 27, 2016. Accessed August 08, 2018. http://fortune.com/2016/08/27/clinton-foundation-healthwork/

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CGI counted politicians and standard-bearers from both sides of the aisle, including Mitt Romney, Laura Bush, Michelle Obama, and George Soros. Music and movie stars became members, too, lending CGI an Oscars-like visibility — Forbes even put out a “what-towear” article before each annual summit. 340 In 2009, CGI caught the attention of Kumar Garg, a young staffer in Obama’s White House Office of Science and Technology Policy (OSTP). Charged with designing a signature STEM initiative for the new president, Garg — now a senior fellow at the Society for Science & the Public — was intrigued by CGI’s model. “Here you had Bill Clinton, a former president, very explicitly creating commitments to action,” he says. “We thought, ‘What could happen if we tried that with a current president?’” 341 Garg and his colleagues floated the idea of a philanthropic commitments model for the White House, borrowing liberally from CGI. However, there would be no membership dues at the White House; instead, the currency, would be reputation and visibility. Upon getting the goahead to pilot the model, Garg’s team began notifying relevant organizations about the president’s future announcements. These organizations were invited join the president by declaring a commitment. “Then, whenever the president did a STEM event, for example, we’d put out a fact sheet, which is just a fancy name for a White House press release,” says Garg. “We started adding a section that basically said, ‘Here’s what the federal government is doing. Now here’s what other folks are stepping up to do.’” 342 Almost immediately, additional organizations wanted in. Declaring commitments with the White House generated automatic press 340

Moore, Kristina. "What To Wear: Clinton Global Initiative 2016 Annual Meeting." Forbes. September 16, 2016. Accessed August 08, 2018. https://www.forbes.com/sites/forbesstylefile/2016/09/15/w hat-to-wear-clinton-global-initiative-2016-annual-meeting/ 341 "Interview with Kumar Garg." Telephone interview by author. June 19, 2017. 342 Ibid.

Heinz Journal coverage and demonstrated organizations’ alignment with a popular president. The OSTP team began to invite commitments at different gradations: “For instance, the really big commitments might get stage time or even a mention in the president’s remarks,” says Garg.

would have happened independently of the White House’s involvement. “Part of the logic model is that commitments create something new,” says Garg. “That’s why people write about them. So we tried to spark work that actually pushed the needle.” 346

343

The idea took hold as an effective way to build multi-sector strategies, and it quickly spread throughout the White House. By 2016, it seemed every White House fact sheet included a list of organizations answering the president’s calls to action. “We increasingly used [the model] for everything,” says Garg. “Global energy, affordable housing, getting people back into the workforce — you name it.” A fact sheet celebrating National Entrepreneurship Month, for example, included more than two dozen organizations committing to support, augment, or somehow amplify the White House’s efforts. 344 A fact sheet about the global refugee crisis included commitments from the private sector, including Airbnb’s pledge to help hosts accommodate refugee families and game developer Zynga’s promise to create an English-learning app with input from resettlement agencies. 345 By inviting commitments, the White House found it was able to both induce new work and encourage organizations to accelerate their current work. The team vetted each commitment in an effort to weed out projects that likely 343

Ibid. The White House. Office of the Press Secretary. "Fact Sheet: Celebrating President Obama’s Top 10 Actions to Advance Entrepreneurship, and Announcing New Steps to Build on These Successes." News release, November 30, 2016. Accessed August 8, 2018. https://obamawhitehouse.archives.gov/the-pressoffice/2016/11/30/fact-sheet-celebrating-president-obamastop-10-actions-advance 345 The White House. Office of the Press Secretary. "Fact Sheet: White House Announces Commitments to the Call to Action for Private Sector Engagement on the Global Refugee Crisis." News release, September 20, 2016. Accessed August 8, 2018. https://obamawhitehouse.archives.gov/the-pressoffice/2016/09/20/fact-sheet-white-house-announcescommitments-call-action-private-sector 344

The model allowing even small White House teams to build national coalitions of organizations. In the STEM field alone, Garg’s OSTP secured more than $1 billion in philanthropic commitments. More than 350 organizations committed to training and supporting 100,000 STEM teachers over 10 years. Investors and foundations committed $4 billion to scaling up clean energy innovations; and companies, nonprofits, and others committed to creating 1,000 makerspaces across the United States. 347 The commitments were designed to outlast the Obama administration, and in many cases, their effects are still being felt — as of July 2018, for example, the campaign to hire 100,000 STEM teachers is on track to reach its goal. 348 Why has the Commitments Model fallen out of use? At the same time, however, the model has all but vanished from the national stage. CGI held its final annual summit in 2016, and President Trump has made no visible effort to develop the sort of broad, multi-sector partnerships that defined his predecessor’s White House. Meanwhile, questions ranging from the legitimate to the conspiratorial continue to swirl around the Clintons and their philanthropic efforts — questions amplified by the brutal presidential campaign of 2016. Despite its

346

Ibid, 6. Ibid, 6. 348 Newcomb, Tim. "With Goal of Hiring 100,000 STEM Teachers in Sight, 100Kin10 Asks: Why Is It So Hard to Find and Keep Great Teachers in STEM?" With Goal of Hiring 100,000 STEM Teachers in Sight, 100Kin10 Asks: Why Is It So Hard to Find and Keep Great Teachers in STEM? July 31, 2018. Accessed August 08, 2018. https://www.the74million.org/100-k-10-hard-to-find-andkeep-great-stem-teachers/ 347

Philanthropic Commitments Model proven successes, the commitments model has fallen out of use, and its future remains unclear. What happened? Garg thinks a lack of transparency may have played a part. The commitments model, he says, was neither clearly defined nor well explained. “It wasn’t like impact investing or something else that lots of people were celebrating or writing about — ‘commitments’ weren’t part of [reporters’] language,” he says. “CGI had put a lot of deep thinking into the model, to the extent that they even hired outside experts to help shape interactions between member organizations and validate members’ commitments. But a lot of that was happening underneath the hood.” 349 And it was happening as public trust in governments, corporations, and institutions — in other words, the bulk of CGI’s membership — had hit an all-time low. In many ways, CGI embodied the very “elites” against whom so many people have become galvanized in recent years: Its members, seemingly beyond reproach, were unleashing massive programs and initiatives around the world with little democratic input. Regardless of its good intentions or positive results, CGI’s seeming lack of accountability did the commitments model no favors, and the philanthropy became an easy political piñata. “Thousands of organizations worked with CGI, and a lot of them got caught up in the question of whether paying membership dues or making commitments equaled gaining access,” says Garg. “And who knows? It’s very hard to disaggregate access from everything else.” Though accusations of pay-for-play had long dogged CGI, the scrutiny intensified after Clinton launched her second presidential run in 2015. On the campaign trail, everyone from Donald Trump to Carly Fiorina — a past CGI attendee herself — assailed the organization as

349

Ibid, 6.

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corrupt. 350 Members began to distance themselves from CGI, with many severing ties altogether. Under growing pressure, the Clintons announced CGI’s pending closure in August 2016, just a month before its final summit. Then, in October of that year, WikiLeaks published the hacked emails of people close to the Clintons and CGI, some of which seemed to validate critics’ accusations. The philanthropy found itself at the center of a firestorm — one that may have contributed to Clinton’s eventual loss. In January 2017, shortly before President Trump’s inauguration, CGI laid off most of its employees. Though a skeleton staff remains in order “to help those who have made commitments keep them,” wrote Bill Clinton, the organization’s downfall left the very model it pioneered in limbo. 351 “It’s unfortunate,” says Garg. “The thousands of organizations that worked with CGI considered its closing to be a huge loss to the community. Now they’re asking, ‘What happens to the commitments model?’ It had become an institution in the social sector . . . and now there’s definitely a vacuum.” 352 It’s a vacuum that the Trump administration has thus far shown no interest in filling. A selfstyled dealmaker, the president tends to favor flashy announcements in which he alone receives credit for achievements. More often than not, he opts for quick wins over carefully plotted, collaboratively planned strategies. His advisory boards have largely been deserted, and his White House is notoriously understaffed —

350

Tanfani, Joseph. "Fiorina's Campaign-trail Attacks Leave out Her Own Ties to Clinton." Los Angeles Times. June 11, 2015. Accessed August 08, 2018. http://www.latimes.com/nation/la-na-fiorina-clinton-ties20150611-story.html 351 "Charting Our Path Forward – The Clinton Foundation." Medium. February 02, 2017. Accessed August 08, 2018. https://www.clintonfoundation.org/blog/2017/02/02/chartin g-our-path-forward 352 Ibid, 6.

Heinz Journal Garg’s former office, for example, now has exactly zero employees. 353 Given the president’s lack of advisors, disinterest in details, and distrust of all things Obama, perhaps it is no surprise that he has neglected the commitments model. Even if he were to embrace it, his administration’s priorities are not likely to inspire the sort of broad coalitions the Obama administration once built — since the election, several organizations seen as aligned with President Trump have been subject to boycotts and negative press. 354 For now, this suggests that White House fact sheets listing dozens of collaborators are unlikely to return anytime soon. In light of the commitments model’s abandonment, it may be tempting to view it as an aberration — a success story that quickly outlived its use. Amid mounting public demands for accountability and grassroots agency, today’s climate may indeed be ill suited for a resurgence of CGI-style philanthropy. However, to abandon the model entirely would be to ignore its potential use in arenas that may be inherently more accountable than a scandalplagued White House or dues-paying clubs for the global elite. Viewed through this lens, its use by a regional network like Remake Learning provides an illuminating case study. Case Study: Remake Learning Days In 2016, as Remake Learning approached its tenth anniversary, Behr and his colleagues conceptualized Remake Learning Days as a way to highlight the work of innovative schools, museums, libraries, and learning spaces throughout the Pittsburgh region. As a steering 353

Alemany, Jacqueline. "Science Division of White House Office Left Empty as Last Staffers Depart." CBS News. June 30, 2017. Accessed August 08, 2018. https://www.cbsnews.com/news/science-division-of-whitehouse-office-now-empty-as-last-staffers-depart/ 354 Bourne, Leah. "The Story of Ivanka Trump's Fashion Brand Illustrates the Power of a Shopping Boycott." Glamour. July 25, 2018. Accessed August 08, 2018. https://www.glamour.com/story/the-story-of-ivanka-trumpfashion-brand-illustrates-the-power-of-a-shopping-boycott

committee formed and began designing the festival, they “noticed a kind of rallying effect among [the network’s] members,” says Behr. “The more people got involved, the more people wanted to be involved. We knew we had this solid base of support. The question became, ‘How do we frame that support in a way [that] gives us a marketing hook and a platform for other people to get involved?’” 355 Behr, who in addition to co-chairing Remake Learning, also leads The Grable Foundation — a private, Pittsburgh-based philanthropy dedicated to improving the lives of children — was familiar with the White House commitments model. The Grable Foundation had participated in several Obama-era “commitment ceremonies,” committing to early childhood education and STEM learning initiatives. “The White House had hosted all these inspiring events that leveraged their built-in bases of support,” he recalls. “It was clear that [the White House had] a formula. They had relationships — they could reach out to funders, universities, and corporations. We realized that as a network, Remake Learning could do the same thing. Why not try it on our own scale?” 356 Behr went to Washington to meet with Garg and his colleague, Tom Kalil — a Clinton Administration alum who had advised CGI’s global health commitments. Together, the three began sketching out what a regional commitments event might look like. Over the next several months, they developed a framework for replicating the model at a smaller, more grassroots scale, eventually securing commitments worth $25 million. But beyond the impressive numbers, Behr and Garg feel their framework addressed criticisms of the model’s lack of accountability: It accounted for the hopes and needs of the people who would be impacted by commitments; incorporated the ideas and concerns of commitment-declaring organizations; and clearly communicated the purpose and leaders behind each commitment. 355 356

Ibid, 1. Ibid, 1.

Philanthropic Commitments Model

“[Remake Learning is] a case study in how organizations with the ability to get the attention of a broader community can leverage their megaphone to get incredible work done,” says Garg. “The commitments model is still effective, and it’s still needed. I feel it’s incumbent on us now to make the process more explicit so that others can take it and run with it.” 357 To that end, what follows is a synthesis of what Behr and Garg learned while franchising the model for regional use. 1. Dream big — even if you are small. Bringing together smart people and effective organizations can help push them all to the next level, says Garg. “You have to ask not only, ‘What do you think you can do?’ but also, ‘What would you love to do? What would you love to do with someone else? What’s your dream commitment?’” To get potential partners thinking this way, he and his team hosted “commitment workshops” — sessions in which organizations were asked to describe their ideal partnerships. “We did this thing called the Magic Laptop exercise,” says Garg. “Imagine you have a magic laptop, and you’re writing a press release. Everything you write becomes true. What would you write? People would dream up these incredible ideas they thought would never be doable.” 358

commitments, “but also crafted some examples out of thin air — things we’d just love to see,” says Behr. “We were really clear about the different ways people could be involved, whether by committing financial support, time, expanded programming, or new products.” 359 This flexibility helped Remake Learning secure a wide array of commitments. The Joan Ganz Cooney Center, a research and innovation lab based at Sesame Workshop, committed to bringing the National STEM Video Game Challenge to Pittsburgh. The RAND Corporation, a global think tank, committed to studying the impact and effectiveness of restorative practices in Pittsburgh’s public schools. Google committed to hosting 750 local students in its Pittsburgh office, giving them a chance to meet with engineers and solve realworld coding challenges. BirdBrain Technologies, a Pittsburgh-based robotics firm, committed to loaning up to 1,000 robots to western Pennsylvania’s classrooms. 2. Start early. “It sounds obvious, but don’t start a week out from the commitment event,” says Garg. “Every organization has its own internal process for launching new work. They have committees. They have to get buy-in. They have to talk to their boards and get approval. Inspiring new work takes time — be sure to make that time.”

A nonprofit leader might aspire to collaborate with Facebook, for example, but feel discouraged for a lack of contacts there. With so many “magic laptops” in the same room, however, participants often discovered that their goals were more realistic than they had previously thought — that someone at Facebook was a mutual connection and a phone call away.

At the White House, Garg and his team would call relevant organizations about six months before a commitment ceremony. After a few years of using the commitments model, they formalized this process even further with a “commitment form” and deadlines posted on the White House website. Any organization could complete and submit a potential commitment for an upcoming announcement. 360

In reaching out to potential partners in Pittsburgh and beyond, Behr and his colleagues not only shared examples of past White House

Behr agrees. Though he and his colleagues started making calls and sending emails several months before the commitment ceremony at

357

359

358

Ibid, 6. Ibid, 6.

Fall 2018

360

Ibid, 1. Ibid, 6.

Heinz Journal Google, they often felt pressed for time. “You have to make very specific asks of people, and often you have to ask them seven times,” says Behr. “Sometimes you won’t get a response right away, and sometimes you’ll get a lot of questions and back-and-forth. There’s a lot of customer service involved, and that takes up more time than you might expect or plan for.” 361 3. High-profile events help. You do not need the star power of the White House or CGI to host an event that gets people — and the media — excited. “Securing commitments, even big ones, wasn’t magic,” says Garg. “We had a deliberative process. It wasn’t just because we had the White House stage — as [Behr] showed, Remake Learning was able to do the same thing on its own in Pittsburgh.” 362 An event’s audience should consist of the people who will be impacted — in Remake Learning’s case, the students on stage — and the people to whom commitment-makers are accountable. “We [designed] the launch event at Google to reflect Remake Learning — who we are as a network and what we strive for in our mission,” says Behr. “Hence the student artists, musicians, scientists, and speakers, plus representatives from the White House and different sectors that contribute to our work.” 363 The event’s attendees served as a peer group in front of which commitment-makers were motivated to announce their work. CEOs wanted to impress others CEOs; mayors wanted to impress their constituents; grantees wanted to impress foundations. The event and its attendees captured the media’s attention, resulting in more than 30 stories appearing in local, regional, and national media, including Forbes and a report by the World Economic Forum. These stories helped familiarize the public with Remake Learning Days, setting the stage for what has become an annual event that regularly draws

more than 30,000 kids and families from across the Pittsburgh region. Next year, the festival will be replicated in five new locations nationwide. Conclusion As the work of both the Obama White House and Remake Learning demonstrates, the philanthropic commitments model can help even small teams of changemakers leverage relationships, forge partnerships, and hold highprofile events designed to amplify a given initiative. Though the model is unlikely to find traction in the Trump White House, it has proven to be useful on a smaller scale where participants are transparent about their efforts and accountable to their peers. In addition to regional, foundation-driven philanthropic efforts, Garg thinks the model could be useful to leadership forums and professional organizations, such as the U.S. Conference of Mayors, the National Governors Association, or even signature conferences such as South by Southwest. “The nice thing about working within the commitments model is that it informs your conversation with the organizations you’re working with,” he says. “You’re not spending all of your time trying to describe the problem. You can say, ‘Okay, we all agree that more kids should be getting into math and science. So, what do you think you and others can do about it?’” 364

361

Ibid, 1. Ibid, 6. 363 Ibid, 1. 362

364

Ibid, 6.