R E P O R T

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On February 6, 2017, more than 100 preeminent academics, government officials, and

leaders from nonprofits, philanthropies, and businesses gathered in midtown Manhattan to

participate in an unprecedented experiment: to combine the latest academic research with

concrete action. Robin Hood, in partnership with the Russell Sage Foundation, the nation’s

leading social science research firm, assembled this group with the goal of sparking

innovative, fundable, and implementable ideas for reducing poverty. But unlike most

conferences, this one had no audience—only participants.

Before breaking into discussion groups, attendees were provided with fresh insights and new data:

• Four leading scholars—Raj Chetty, Matthew Desmond, Caroline Hoxby, and Sendhil Mullainathan—served as keynote speakers. They presented their latest findings on neighborhoods and opportunity, eviction, education, and data science.

• Three panel presentations—by ideas42, Columbia University, and US Partnership on Mobility from Poverty—shed light on the latest behavioral science research, how people move in and out of poverty over time, and takeaways from a year of concentrated inquiry into new means of increasing upward mobility respectively.

This isn’t the first time Robin Hood has taken a novel approach to tackling poverty. Our programs are often the first of their kind and serve as models to identify effectiveness before being replicated in other cities. In the same spirit, the inaugural Poverty Solutions Conference was an effort to stimulate bold, fundable ideas by bringing together leading academics and professionals from diverse backgrounds and practices. We are invigorated and heartened by the deep engagement, expertise, and innovative thinking that emerged from each working group.

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1940 1950 1960 1970 1980Child's Year of Birth

The Fading American DreamPercent of Children Earning More than Their Parents, by Year of Birth

Source: Chetty, Grusky, Hell, Hendren, Manduca, Narang 2016

POVERTY AS A PREDICTOR FOR NEGATIVE LIFE OUTCOMES:

THE FADING AMERICAN DREAM

Percent of children earning more than their parents, by year of birth.

43.1 MILLION Americans live in poverty ONE IN FIVE

American children live in poverty

Among economically advanced countries, only Romania has a HIGHER CHILD POVERTY RATE than the U.S.

43.1MILLION325 MILLION TOTAL POPULATION

The richest 1 percent of women lives 10.1 YEARS LONGER on average than the poorest 1 percent of women

Sixth graders in the richest school districts are FOUR GRADE LEVELS AHEAD of children in the poorest districts.

The richest 1 percent of men lives 14.6 YEARS LONGER on average than the poorest 1 percent of men.

THE PROBLEM

POVERTY IN AMERICA IS VAST AND DEEPLY ENTRENCHED. This is the scale of the problem that participants of the Poverty Solutions Conference met to tackle:

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THE BIG THEMES

During the course of the day’s discussions, several key themes emerged:

REVIVING THE AMERICAN DREAM THROUGH THE POWER OF NEIGHBORHOODThe environment a child grows up in is a powerful determinant of future upward mobility. A long-term study by Stanford Economics Professor Raj Chetty found that when low-income families with children use housing vouchers to move to low-poverty, high-opportunity areas, the children fared much better as adults. While moving large swaths of the population isn’t feasible, we can cultivate the elements that make a high-opportunity neighborhood in lower-opportunity areas and identify “opportunity bargain” neighborhoods that offer those same elements at lower rents.

THE PACKAGE APPROACH TO STRENGTHENING SCHOOLS To climb out of poverty, a child needs access to quality education, but low-income neighborhoods have a disproportionate number of low-performing schools. How then do we ensure children have access to the educational opportunities they need? A multi-year study by Stanford Economics Professor Caroline Hoxby found that charter schools in New York City boost test scores more than district schools and identified elements that high-performing schools had in common. There was no single factor that made a significant difference in schools. Rather, the key was a package that includes a longer school year, a mission emphasizing academics, more time spent teaching English language arts, merit-based teachers’ pay, and a small rewards/small infraction discipline model.

EVICTIONS ARE NOT ONLY SYMPTOMS BUT ALSO DRIVERS OF POVERTYThe majority of low-income renting families receive no housing subsidies and are forced to spend at least 50 percent of their income on rent, leaving little for utilities or food, and making it nearly impossible to absorb any “shocks,” such as wage loss or health issues. Communities of color are disproportionately affected by eviction, particularly low-income mothers and their children. Long-term research by Matthew Desmond, a professor of sociology at Harvard, found that among renters in Milwaukee, one in five African American women will be evicted, which exacerbates existing health, school, and employment struggles, and sends many tumbling deeper into poverty.

THE SAME MECHANISM THAT POWERS NETFLIX CAN BE USED TO FIGHT POVERTYThe same principles and algorithms that allow Netflix to determine what a viewer wants to watch can be used to predict who is most likely to fall into homelessness, which classes can best ensure the success of first- generation college students, and what households have the highest risk for repeat domestic violence incidents. According to Harvard Economics Professor Sendhil Mullainathan, the key requirements are large data sets and a single, clear predictable outcome.

SMART DESIGN MATTERSWhen people experiencing poverty are already stretched thin, the lessons of behavioral science can help ensure that they take full advantage of the benefits and resources that are available to them. Case studies by ideas42 concluded that simple, no-cost design tweaks to the format of an email reminding students to complete their financial aid form can improve the response rate. Text messages reinforcing social norms about the difficulty of freshmen year can reduce the dropout rate for first-year college students. Accessing benefits must make someone’s life easier, not harder.

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RAJ CHETTY, Professor of Economics, Stanford University

In the mid-1990s, the Moving to Opportunity Experiment awarded housing vouchers through a randomized lottery to 4,600 families in Boston, New York, Los Angeles, Chicago, and Baltimore, allowing them to move to better neighborhoods. The results were:

• Children who moved to low-poverty areas when young (e.g., below age 13) do much better as adults:

-30% higher earnings = $100,000 gain over life in present value

-27% more likely to attend college

-30% less likely to become single parents

• Moving had little effect on the outcomes of children who were already teenagers

• Moving also had no effect on parents’ earnings

• Exposure to better neighborhood during childhood is what matters most

How can we employ these lessons?Two types of policy approaches to increase upward mobility:

1. Choice-based: help people move to better areas using vouchers or by building affordable housing.

• 1 in 5 low-income families already move houses in a given year

• Combats increasing segregation in most American cities

2. Place-based: invest in low-opportunity places to replicate successes of areas with high upward mobility. Characteristics of higher-opportunity areas:

• Less segregated • Good schools

• Have a larger middle class • Strong community institutions

Highlights:• There are many “opportunity bargains” throughout American cities: areas with relatively low rents that offer

good opportunities for kids.

• Any fears that wealthier families living in high-opportunity neighborhoods may harbor about the influx of low-income families to their neighborhood are unfounded. In fact, moving low-income families to higher- opportunity areas results in slightly better outcomes for wealthier residents in those areas.

HARNESSING THE POSITIVE EFFECT OF NEIGHBORHOODS

“While we talk about whether America is the land of opportunity or not, really the answer to that question depends on where you grow up.”

– Raj Chetty

KEYNOTE SPEAKERS AND PANEL PRESENTATIONS

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MATTHEW DESMOND, Professor of Sociology, Harvard University

A year and half spent embedded in Milwaukee, in a trailer park, the inner city, and among landlords, and a comprehensive survey of 1,200 Milwaukee renters, informs Desmond’s research into the role of eviction in driving people into poverty and trapping them there.

As housing costs have gone up, so have evictions.

• Half of poor families spend over 50% of their income on housing costs

• One in four families spend over 70% on rent and utilities

• Three out of four families who qualify for housing assistance don’t receive it

• In large cities, the wait list for public housing is often counted in decades

But eviction is not just a condition of poverty. It drives people who are financially vulnerable into poverty. In addition, communities of color face a significantly higher risk for eviction, particularly women and mothers with children. In Milwaukee, one in five black women renters reported being evicted sometime in their life.

Many cities have local nuisance ordinances, which allow landlords to evict tenants based on 911 calls. The majority of these calls are not drug- or crime-related, but rather calls about domestic violence or noise complaints regarding children. In fact, families with children are three times more likely to be evicted than similar renters who do not live with children.

Post-eviction, the quality of a person’s living situation typically declines, not least because an evicted person often loses all her possessions in the process. The toll is particularly hard on children, who must often change schools and lose neighborhood connections.

Evictions are a long-lasting blemish on an individual’s record. This makes it harder to get approved for an apartment or even public housing, which creates further instability, and exacerbates existing problems with employment, mental health, debt, and other social maladies.

THE ROLE OF EVICTION IN DRIVING POVERTY

“If incarceration has come to define the lives of men from impoverished black neighborhoods, eviction is shaping the lives of women.” – Matthew Desmond

“You can’t fix poverty in America without fixing housing.”

– Matthew Desmond

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CAROLINE HOXBY, Professor of Economics, Stanford

In her research, Caroline Hoxby examined the effects that charter schools have on student performance and the factors that lead to higher achievement.

Professor Hoxby found that on average, low-income charter school students outperformed their peers at district schools on standardized tests in New York City. A student who attended a charter school for all of elementary and middle school (K-8) would close about 86 percent of the achievement gap in math and 66 percent in English.

While charter schools have proven to be effective in boosting student performance in New York City, they only serve 10 percent of the students, or roughly 100,000 out of 1.1 million. So applying best practices from charter schools to improve district schools will be critical to significantly boosting student achievement and expanding opportunities in low-income neighborhoods.

Note: Professor Hoxby shared with conference participants prelimi-nary results from her latest study about the effect of charter schools on long-term employment and other outcomes. Because this material has not yet been published, we are not able to fully discuss all the details of her presentation.

Several key factors at charter schools were identified as playing a role in increased performance including:

• a longer school year

• a greater number of minutes devoted to core subject of English language arts during each school day

• a small rewards/small penalties disciplinary policy

• merit-based pay for teachers

• a mission statement that emphasizes academic performance

GOOD SCHOOLS ARE VITAL TO FUTURE OPPORTUNITY

“A typical charter school has at least twice the number of applicants as it

has spaces.” -Caroline Hoxby

“Affluent and middle class families are much more likely to say we deliberately chose a school for our child. There is no reason why that is something that only affluent parents do.” – Caroline Hoxby

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Professor of Economics, Harvard University

The same advances in computer technology and data analytics that allow Netflix to predict which movies a viewer might like to watch can be employed for better decision-making and resource allocation in the poverty sector. The key requirements are large data sets and a single, clear, predictable outcome. Essentially, these prediction algorithms are solutions in search of a problem.

Potential Uses

The potential for these algorithms is vast and the results startlingly accurate. To test the accuracy and real-world applicability of machine learning, Professor Mullainathan analyzed millions of bail hearing cases and created an algorithm that predicted whether an individual was at risk to reoffend. The “machine judge” significantly reduced crime while releasing the same percentage of individuals.

ALGORITHM VS. JUDGES ON BAIL RELEASE AND CRIME PROBABILITY

Examined 1 Million Cases:

DATA IN >> DATA OUT

Defendant History >> Probability of Committing Crime

At a 74% Release Rate:

Judge >> 11.3% Crime Rate

Algorithm >> 8.5% Crime Rate

>>Algorithm results in a 25% REDUCTION in crime at the same release rate

If the algorithm was set to produce the same crime rate as judges:

11.3% Crime Rate, Algorithm Produces >> Increases Release Rate to 85% or

41% Reduction in Jail Population

PUTTING THE POWERS THAT FUEL NETFLIX TO WORK FIGHTING POVERTY

750,000 people in the U.S. being held in jail awaiting trial

Average stay is 2-3 MONTHS Jail or release can mean difference between job loss and job security

DATA IN >> DATA OUT

Transcripts and Courses Grades >> Best College Courses for First Generation Students

Financial Records >> Likelihood of Eviction, Late Payment, or Default

Audio of 911 Call >> Repeat Domestic Violence Incident

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Guidelines and Cautions:

• Easy to bake in our biases

• Difficult to ensure algorithms work as intended

• Must have a single clear goal

• Algorithms are decision aids, not a substitute

“Isn’t it a bizarre world that community college students struggling to figure out how to spend the next six months of their lives can go home and have the best analytical software at their fingertips to tell them how to spend the next two hours?”

– Sendhil Mullainathan

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IDEAS42

Ending poverty is a daunting task that requires massive financial investment and widespread policy and societal change. But the lessons of behavioral science can encourage better use of the benefits and resources that are currently available. Anthony Barrows, managing director and Natalie Dabney, senior associate, both of Ideas42, discussed the importance of removing hassles, improving perceived benefits, and reducing bottlenecks to help encourage greater participation in key benefits programs.

Three Guiding Principles:

CUT THE COSTS Make it easier and less time-consuming to access benefits.

CREATE SLACKBuild in cushions of time, money, and support for people experiencing unanticipated shocks.

REFRAME AND EMPOWERAffirm the dignity and autonomy of people experiencing poverty so they feel encouraged and empowered to help themselves.

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DESIGNING SOLUTIONS TO POVERTY

“While proponents of the ‘culture of poverty’ narrative tend to put the burden for change onto struggling individuals and families, our recommendations largely target systems and organizations.”

– Anthony Barrows, Managing Director ideas42

Fix the System, Not the Person We must rethink how we understand and talk about people experiencing poverty. Poverty is not a condition that arises from a person’s choices or character. Instead, ideas42 conceives of poverty as a context of chronic scarcity —of money, time, or food—that results in decision fatigue and the inability to plan long term.

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Fundamental building blocks for promoting mobility These programs aim to improve or meet fundamental needs or building blocks, such as health, housing, or education, which can support or lead to mobility. Examples include early childhood development programs and efforts to reform schools.

Initiatives generating comprehensive personal or family mobility pathways These programs tend to focus on an individual or family and determine what combination of services, training, and support they need to succeed. A navigator, advocate, or coach may help the person or family assess their needs, set goals, and connect to available services.

Place-conscious strategies to create neighborhoods of choice or opportunity These programs recognize that place (typically neighborhoods) matters for economic mobility, and so they strive to improve neighborhoods of concentrated poverty or help people experiencing poverty move to better neighborhoods.

Regional, cross-sectoral, jointly accountable partnerships These efforts bring together community leaders and service delivery organizations that collaborate on and are accountable for setting and achieving joint goals, such as improving academic success for students in their region.

Large-scale economic, political, and institutional changes These efforts aim for nationwide, systemic changes—such as antidiscrimination or desegregation policies and criminal justice reform—which many argue are needed to genuinely increase mobility.

Accountability, informational, and managerial innovations These strategies aim to improve data systems and administration to evaluate and improve mobility programs. Vastly improved, readily available performance and outcome measures could spur innovation, accountability, and learning.

STRATEGIES FOR CREATING MOBILITY FROM POVERTY FROM THE U.S. PARTNERSHIP ON MOBILITY FROM POVERTY

The U.S. Partnership on Mobility from Poverty has been tasked with determining how to substantially increase mobility from poverty for large numbers of people.

In the course of their research, they classified interventions into two broad categories: 1) individual-centric interventions based on where a person is in their life, such as early childhood or the shift from adolescent to adulthood; and 2) interventions that focus on addressing large forces such as labor markets, racism, or major institutions such as schools and hospitals.

In trying to create large-scale solutions, the Partnership perceived this as a false dichotomy and asserted any solution must incorporate multiple elements. Their team developed a framework that combines elements of who, or what, or where an activity is targeted and its core strategic thrust or method. The breakdown is as follows:

THE GATES FOUNDATION

“Poverty is not just about a lack of income— it’s about a lack of power. We heard that in the Mississippi Delta, in Indian Country in

Lummi Nation, and in Bed-Stuy.”

– Nisha Patel, Executive Director, U.S. Partnership on Mobility from Poverty

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Conducted in partnership between Robin Hood and Columbia University, Poverty Tracker is an ongoing, ground-breaking study. Unlike existing studies on poverty that only offer a static snapshot, Poverty Tracker surveys the same 4,000 households quarter after quarter to provide a dynamic view of disadvantage over time. This allows researchers to better understand how individuals move in and out of poverty and material hardship, how they get help, what programs they use, and other important insights.

Now in its fourth year, Robin Hood has released quarterly reports that can help private funders and government agencies better tailor anti-poverty programs. Christopher Wimer, co-director of CPSP, discussed the findings from the latest report which opened a new line of inquiry into the relationship between “shocks” that individual house-holds suffer and deprivation.

The report examined five shocks: financial; relationship(divorce); crime (robbery); accident/ illness; and arrest. Researchers found a strong correlation between frequency of shocks and persistence of disadvantage. For example, 86 percent of those suffering from persistent hardship also suffered multiple financial shocks. By contrast, only 39 percent of those reporting no hardship over the three years suffered multiple financial shocks. Similarly, 23 percent of those suffering from persistent poverty experienced multiple criminal shocks, while only 13 percent of those who never experienced poverty suffered from similar shocks.

POVERTY TRACKER ON MOBILITY FROM POVERTY

CENTER ON POVERTY AND SOCIAL POLICY AT COLUMBIA UNIVERSITY

8%

25%

16%

13%

23%

15%8%

62%

19%

15%

9%

8%

RELATIONSHIP

34%

8%

62%

18%

68%23% 62%

51%45%

FINANCIAL 18% 62%CRIME

8% 9%

12%

18%

14%

ARREST

8%20%

16%

30%23%

ACCIDENT/ILLNESS

PERCENT OF NEW YORKERS EXPERIENCING MULTIPLE SHOCKS, BY PERSISTENCE OF POVERTY

3 years 2 years 1 year Never

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CONCLUSION

When the conference attendees returned to the main hall for the closing remarks, the energy in the room was palpable. In addition to the dozens of proposed ideas to tackle poverty’s most pressing challenges, important connections had been made between policy makers, academics, and those providing services.

By design, the conference was an experiment. More than just presentations and talks, we sought to spur action. For the first time, we united the latest in academic research with concrete plans. In the coming weeks, we will share more information about the next steps and the tangible results of this experiment. But for now, we expect and encourage our participants to forge ahead with any new ideas or possible collaborations that took hold over the course of the day.

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