Program on Children. (Conferences).

The NBER's Program on Children, directed by Research Associate Jonathan Gruber of MIT, met in Cambridge on April 4. They discussed these papers:

Lance Lochner, NBER and University of Rochester, "A Theoretical and Empirical Study of Individual Perceptions of the Criminal Justice System"

Phillip Levine, NBER and Wellesley College, "The Impact of Social Policy and Economic Activity Throughout the Fertility Decision Tree"

Eric A. Hanushek, NBER and Stanford University; John F Kain, University of Texas; and Steven Rivkin, Amherst College, "New Evidence about Brown vs. Board of Education: The Complex Effects of School Racial Composition on Achievement" (NBER Working Paper No. 8741)

Brian Jacob, Harvard University, "Making the Grade: The Impact of Test-Based Accountability in Schools"

Lochner examines perceptions of the criminal justice system held by young males. He uses data from the National Longitudinal Survey of Youth 1997 Cohort and the National Youth Survey and asks how perceptions respond to individual information about the probability of arrest and thus affect criminal behavior. He finds that young males who engage in crime but are not arrested revise their perceived probability of arrest downward, while those who are arrested revise their probability upwards. The perceived probability of arrest then is linked to subsequent criminal behavior -- youth with a lower perceived probability of arrest are significantly more likely to engage in crime in subsequent periods. Information about the arrests of others, local neighborhood conditions, and official arrest rates have little impact on the perceptions of any given individual about his own arrest rate. Further, young males typically report a higher probability of arrest than is actually observed in official arrest rates. But there do not appear to be substantial differences in perceptions across race and ethnicity for most of the crimes studied. These findings suggest that heterogeneity in perceptions may be an important cause of differences in criminal participation across individuals. Furthermore, those perceptions can be influenced by the justice system. Policies enacted to change the actual probability of arrest will have heterogeneous effects on individuals with different crime and arrest histories, but increases in true arrest rates will lower crime. Since it may take time for information about changes in actual arrest rates to disseminate, changes in enforcement policy are likely to have lagged effects on crime rates.

Kaestner, Dubay, and Kenney examine the effects of Medicaid managed care (MMC) on prenatal care utilization and infant health. They obtain separate estimates of the effect of primary-care-case-management (PCCM) managed care programs and HMO managed care plans on utilization of prenatal care, birth weight, and cesarean section. Their results suggest that MMC is associated with: a small, clinically unimportant decrease in the number of prenatal care visits and a significant increase in the incidence of low-birth weight and pre-term birth. MMC has no statistically significant relationship to the APNCU index of the adequacy of prenatal care or the incidence of cesarean section. The authors conclude that Medicaid managed care has virtually no association with, or causal effect on, use of prenatal care, birth outcomes, or cesarean section.

Levine considers the impact of changes in abortion and welfare policies, along with economic conditions between 1985 and 1996, at each stage of the fertility decision tree, including sexual activity, contraception, pregnancy, abortion, and birth. The abortion policies he considers are parental involvement laws and mandatory waiting periods; the welfare policies include generosity of benefits as well as state-level welfare waivers as a whole, and the "family cap." He uses state-level data for this period to examine abortion, birth, and pregnancy outcomes, and microdata from the 1988 and 1995 National Surveys of Family Growth to examine sexual activity and contraception. Levine finds that parental involvement laws increase contraception use among minors, leading to fewer pregnancies and therefore fewer abortions. Teen births do not rise in response. Pregnancies and births are procydical, which is attributable to greater use of contraception when the economy falters rather than to a change in sexual activity amo ng unmarried women. The evidence does not support much of an effect of welfare reform policies on fertility-related behavior.

Uncovering the effects of school racial composition on achievement is difficult, because racial mixing in the schools is not an accident but rather represents a complex mixture of government and family choices. While the goals of school integration legally inspired by Brown vs. Board of Education are very broad, Hanushek, Kain, and Rivkin focus more narrowly on how school racial composition affects scholastic achievement. Their evaluation, made possible by rich panel data on the achievement of Texas students, disentangles racial composition effects from other aspects of school quality and from differences in student abilities and family background. Their results show that a higher percentage of black schoolmates has a strong adverse effect on the achievement of blacks and, moreover, that the effects are highly concentrated in the upper half of the ability distribution. In contrast, racial composition has a noticeably smaller effect on the achievement of lower ability blacks, whites, and Hispanics. This strong ly suggests that the results are not a simple reflection of unmeasured school quality.

The recent federal education bill requires states to test students in grades three to eight each year, and to judge school performance on the basis of these test scores. Jacob uses detailed administrative data on the Chicago public school system to examine the impact of a test-based accountability policy on student and teacher behavior. He finds that math and reading scores increased sharply following the introduction of a high-stakes accountability policy in Chicago, in comparison to both prior achievement trends in the district and to changes experienced by other large, urban districts in the Midwest. However, he also finds that teachers and administrators responded strategically to the incentives along a variety of dimensions. Specifically, the accountability policy led to a substantial increase in the proportion of students placed in special education and to an increase in the proportion of students retained (even in grades not directly affected by the policy). The policy also appears to have led schools to substitute away from low-stakes subjects such as science and social studies. Finally, Jacob shows that the accountability policy did not lead to comparable achievement gains on a state-administered, low-stakes exam. This suggests that the gains on the high-stakes exam may have been driven largely by student effort and/or test-specific preparation and thus may not reflect a more general increase in student knowledge.