Utah is Better at Getting People Out of Poverty, But Why? Our Economics Professors Answer.

Utah is a model to many other states of upward mobility, or the ability of people to get themselves out of poverty, according to a 2014 study done by four Harvard and University of California, Berkley analysts. Bloomberg View reporter Megan McArdle visited Utah in March of 2017 to discover its secrets to the American dream. Along the way, she met two BYU economists, who weighed in on Utah’s success.

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How Does Utah Do It?

She learned that The Church of Latter-day Saints leads the way in helping the impoverished rise to economic stability, if not success. She learned that Utahns emphasize education as a means of getting out of poverty. She learned, after meeting with government leaders and civil servants, that they form a “cheerfully effective bureaucracy.” And she saw that, in Utah, the community is heavily involved in helping others out of poverty, and Welfare Square is the center of the action. That is where volunteers provide help to those in need, but they help the needy help themselves.

Exposure to Different Social Networks in Schools

In the 2014 study she worked to understand, she learned that the inequality that best predicts low mobility is the distance between a community’s upper middle class and its poorest citizens. kids-girl-pencil-drawing-159823BYU economist David Sims has researched income mobility, and said that one of the reasons that Utah is better at it than other states is because its schools tend to introduce kids to different social networks, just by virtue of their school boundaries. This makes for a “leveling of the playing field,” so to speak. Says Sims: “What it’s especially good at is a sort of middle classness that’s so broad it’s almost infectious.”

Low Racial Diversity

A child born in Charlotte, North Carolina has a 6.8% less chance that one born in Utah to make it into the top quintile of income, if he or she was born into the lowest income quintile. McArdle theorizes that one of the reasons  has to do with Utah’s relatively low racial diversity:

“When the poor people are, by and large, the same race as the richer ones, people find it easier to talk about them the way they might talk about, well, family members — as folks who may have made some mistakes and started with some disadvantages, but also as folks who could be self-sufficient after a little help from an uncle or a sister. It’s a very different conversation from “victim”/“oppressor” and “us”/“them”: a conversation that recognizes that poor people often make choices that keep them in poverty, but also that the constraints of poverty, including the social environment of poor neighborhoods, make it very difficult to make another choice.”

High Rates of Religious Practice and Marriage

She, along with the authors of the study (Chetty et al), also attribute the higher rate of upward mobility to relatively high rates of religious practice. Chetty et al state that “religiosity is very strongly positively correlated with upward mobility, while crime rates are negatively correlated with mobility.” Since Utah’s population is predominately LDS, there is less alcohol sold and more marriages. These are factors that reduce poverty, say McArdle. Likewise, Kathryn Edin, at a recent Hinckley lecture on poverty, said that family instability and complexity are both consequences and causes of poverty, and that it is more common among low-income families. Chetty et al also suggest that having two married parents is a bedrock foundation of economic mobility. However, society is shifting away from marriage.  “Why don’t we use what we have?” asks BYU economist Joe Price, in response to that trend. pexels-photo-110204“You’ve got this institution that has worked for thousands of years, [but] there’s a reluctance to use the word ‘marriage’ in public policy.”

Utah’s relative success at providing opportunities for getting out of poverty isn’t due to any heavy-handed government policy or large amounts of per-pupil spending on education. It is due, not only to the factors already listed, but also:

  • an aggressive war on homelessness by its government,
  • a brand of “compassionate conservativism that went hand-in-hand with an unusually functional bureaucracy”
  • the Mormon welfare network, which strongly encourages emergency preparedness, is staffed by an “unrivaled system of highly-organized community volunteer work,” and is structured so that recipients of financial help are led back to self-sufficiency.

What Does This Mean for Other States and People?

Beyond the reasons for Utah’s relative success in this area, though, there are bigger questions, the biggest of which is whether or not other states can replicate what Utah has done. She says:

This does raise some questions about the viability of Utah’s “compassionate conservative” model outside the state. The vast welfare infrastructure from the Mormon Church naturally makes it easier to have smaller government. Perhaps that could be replicated by other communities. But the values of the Mormon Church may create a public that simply needs less help. That’s harder for another community to imitate. I’m not sure this key ingredient is available in a secular version; I think religion might only come in religion flavor.

I really, really wanted to find pieces of Utah’s model that could somehow be exported. Price gave me some hope. The Mormon Church, he says, has created “scripts” for life, and you don’t need religious faith for those; you just need cultural agreement that they’re important. We have lots of secular authorities who could be encouraging marriage, and volunteering, and higher levels of community involvement of all kinds. Looking at the remarkable speed with which norms about gay marriage changed, thanks in part to an aggressive push on the topic from Hollywood icons, I have to believe that our norms about everyone else’s marriages could change too, if those same elites were courageous enough to recognize the evidence, and take a stand.

 

 

 

 

 

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