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A city thrives when its residents thrive. Yet many families, even though they are employed fulltime, continue to struggle to meet their families' basic needs. Local elected officials across the country have discovered a way to strengthen working families while bringing more federal dollars into the local economy: by connecting eligible workers to the Earned Income Tax Credit (EITC).
Almost 22 percent of children are poor. In 2012, over 16 million children in the U.S. were living in poverty according to the official measure, defined as living in families with income under $19,090 for a family of three. This is almost identical to figures for 2011, but an increase of nearly three million and 4 percent over 2007 (the last year before the Great Recession). Children are more likely than adults to be poor.
Anchor institutions are place-based entities such as universities and hospitals that are tied to their surroundings by mission, invested capital, or relationships to customers, employees, and vendors. These local human and economic relationships link institution well-being to that of the community in which it is anchored. Increasingly, anchor institutions across the nation are realizing this interdependence and are expanding their public or nonprofit mission to incorporate what we call an "anchor mission." In other words, they are consciously applying their long-term, place-based economic power, in combination with their human and intellectual resources, to better the long-term welfare of the communities in which they reside.
Chester, Pennsylvania, a small, formerly industrial city located on the Delaware River, not far from Philadelphia, exemplifies the problems and possibilities faced by older manufacturing cities across the United States, especially in the Northeast and Midwest. Chester's problems of poverty, stagnation, and unemployment stem from the late 20th-century decline of an industrial economy in the United States - which in Chester was primarily centered on automobile manufacturing and shipbuilding - and the flight of the more affluent residents to the suburbs. The remaining residents face high poverty, high unemployment, a crumbling infrastructure, lack of services and businesses, and underperforming schools. There is hope, however. Although the Federal Reserve Bank classifies Chester as a "struggling city," Chester also embodies the possibilities in the concept of resilience defined as "the individual and collective capacity to respond to adversity and change." The project of turning Chester around is a work in progress, but Chester is also a community that has taken intentional action "to enhance the personal and collective capacity of its citizens and institutions to respond to and influence the course of social and economic change." In fact, Chester, and one of its key partners in community revitalization, Widener University, can serve as a case study of what building resilience can look like in the face of daunting challenges.
Our key substantive finding is that early improvements in child health, academic achievement, and behavior as well as improved parenting can yield sizable economic benefits for adult earnings. This is all the more striking when we recall that our estimates, for the most part, capture only a portion of the effects that early interventions are likely to have. Given data constraints for early achievement, attention, and the home environment we have focused on effects that work through improvements in school achievement in adolescence and that result in gains in one adult outcome, earnings. We have ignored effects that work through other intermediate outcomes, such as behavior and health, including peer effects, as well as effects on other adult outcomes, such as physical health. Moreover, our estimates do not take into account any synergies that might arise from concurrent improvements across more than one domain. If we could measure the full range of effects, the economic payoffs would surely be much larger than those estimated here.
Anchor institutions (often referred to as \"eds and meds\") are place-based enterprises, firmly rooted in their locales. In addition to universities and hospitals, anchors may include cultural institutions (such as museums), health care facilities (such as nursing homes), and municipal governments. Typically, anchors tend to be nonprofit corporations. Because they are rooted in place (unlike for-profit corporations that may relocate for a variety of reasons, such as lower labor costs, more subsidies, or fewer environmental regulations), anchors have, at least in principle, an economic self-interest in helping ensure that the communities in which they are based are safe, vibrant, and healthy.
The intensification of economic inequality, one of the defining issues of our times, has many causes, ranging from the weakening of labor unions to the decimation of inheritance taxes. This report argues that another factor belongs on the list: subsidies given by state and local governments to large corporations in the name of economic development.
We examine how within-firm skill premia - wage differentials associated with jobs involving different skill requirements - vary both across firms and over time. Our firm-level results mirror patterns found in aggregate wage trends, except that we find them with regard to increases in firm size. In particular, we find that wage differentials between high- and either medium- or low-skill jobs increase with firm size, while those between medium- and low-skill jobs are either invariant to firm size or, if anything, slightly decreasing. We find the same pattern within firms over time, suggesting that rising wage inequality - even nuanced patterns, such as divergent trends in upper- and lower-tail inequality - may be related to firm growth. We explore two possible channels: i) wages associated with "routine" job tasks are relatively lower in larger firms due to a higher degree of automation in these firms, and ii) larger firms pay relatively lower entry-level managerial wages in return for providing better career opportunities. Lastly, we document a strong and positive relation between within-country variation in firm growth and rising wage inequality for a broad set of developed countries. In fact, our results suggest that part of what may be perceived as a global trend toward more wage inequality may be driven by an increase in employment by the largest firms in the economy.
A report examining the University of Pennsylvania's economic imapct on Philadelphia and Pennsylvania.
For generations, cities have been places where people of every background have sought opportunity. But as urban economies have evolved in recent decades, our cities have experienced sharp growth in economic disparities, and many communities have suffered. Addressing these disparities requires leveraging cities' economic assets in order to better create, prepare people for and connect them to economic opportunity.