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Laurie Goodman Ellen Seidman
| Posted: April 21st, 2014
A major step toward meaningful housing finance reform, the Johnson Crapo discussion draft (S.1217), is scheduled for markup on April 29. Two of the bill’s important features, however, are cause for concern: the dual structure for private capital and the mechanics of the affordable housing flexible incentive fee. In our new commentary, we explain our concerns, and suggest solutions for both sets of issues.
The problems with dual structure
One of the goals of housing finance reform is to increase the supply of private risk capital in the housing market. Today, about 80 percent of new mortgage originations are backed by the federal government, while the other 20 percent are almost entirely in bank portfolios. Yet in 2002, before the housing bubble, the government share (of a much larger market) was slightly over 50 percent. Johnson Crapo, like the initial version introduced by Senators Bob Corker (R-TN) and Mark Warner (D-VA), provides for a catastrophic government guarantee to support the liquidity of certain mortgage-backed securities (MBS). In both bills, the guarantee can be accessed through either of two channels: (1) by well-capitalized credit insurers (“guarantors”) and (2) by entities who pool mortgages into securities (“aggregators”) through individual capital markets structures (“capital markets execution”). In theory, the two channels should increase competition and reduce mortgage interest rates.
In practice, the dual structure raises three major concerns:
- It will be close to impossible for regulators to ensure that the capital markets execution is backed by capital of equivalent quantity and quality as that backing the guarantors. Capital markets investors are on the hook for 10 percent on a given deal; guarantors are on the hook until they go out of business, with excess capital from some groups of loans absorbing the losses from others. The result: in good times, the capital markets execution will both attract the lowest risk loans and dominate the market.
- Because capital markets are volatile and fickle, their dominance during good times may well be followed by flight during periods of uncertainty. We are concerned that when that happens, the guarantors will be unable to ramp up quickly enough to keep the market operating and housing credit available—this is the situation we would have seen in 2008 had Fannie Mae and Freddie Mac not been available.
- Because of the variety of potential capital markets structures, and the amount of information private investors will demand to put their capital at risk, those MBS will likely not be eligible for the To Be Announced market. The result will be reduced liquidity in a market that is critical to both interest rate lock-ins for consumers and portfolio management by many fiduciaries.
We conclude that the capital markets execution adds excessive volatility, complexity, and uncertainty to the housing finance system, and recommend that it be deleted in favor of the guarantor channel.
Johnson Crapo establishes a series of strategies relating to affordable housing and “the broad availability of mortgage credit,” including the creation of an affordable housing fee in section 501. To incent aggregators and guarantors to serve underserved markets, the bill has an incentive structure for the fee, which must average 10 basis points (bps) on all guaranteed MBS. While innovative and intriguing, it poses some concerns:
- The fee would be determined after the close of each year, a process that makes it highly unlikely that the incentive’s benefit will be passed through to borrowers, reducing the incentive to increase the supply and affordability of loans to underserved markets.
- The fee attempts to incent activity in up to eight market and product categories and requires that aggregators and guarantors be evaluated in three different ways, including against each other. It is unclear how guarantors (who are likely to be quite diversified) and aggregators (who are more likely to be small and specialized) can be ranked together. And the calculation’s complexity will dampen the fee’s incentive impact.
- The bill’s requirement that the highest fee not exceed twice the lowest, combined with the fact that the fee is only charged on guaranteed MBS and the requirement that all fees average 10 bps, reduces the effect of the incentive on both market participants and borrowers.
The impact of the incentive could be improved by structuring it as a fee schedule, known in advance, for serving underserved and other markets. If underserved markets were 10 percent of the total market, and loans to adequately served markets were assessed at 15 bps, the cost of mortgages for underserved markets could be reduced by 35 bps, thereby incenting both primary and secondary market participants to offer underserved markets prices that compensate participants for any additional risk and are attractive to borrowers.
Johnson Crapo represents important movement toward housing finance reform. We hope our suggestions will help the process.
House photo from Shutterstock.
Filed under: Economy |Tags: housing, housing finance, Johnson Crapo, reform, Urban Institute Add a Comment »
| Posted: April 21st, 2014
Children in low-income communities often change schools and move residences. Using data from a panel study of households in 10 cities participating in Making Connections, the Annie E. Casey Foundation’s national place-based initiative, our new research reveals how residential moves connect to school changes within distressed neighborhoods.
In the low-income communities studied, students often switch schools. Over three years, 78 percent of children changed schools. While 56 percent of those children switched from a lower to higher educational level like elementary school to junior high (a promotional change), 22 percent changed within their same level (a nonpromotional change). The remaining 22 percent remained at the same school in both periods. Thus, half of the children who could have stayed at their original school switched.
Although less prevalent, housing moves were also common among low-income children. Approximately 55 percent of the children moved homes over the three years, far above the national rate. Switching schools in these neighborhoods was linked with residential mobility—although not as tightly as might be commonly understood. While the “school changers” moved homes more often than the “school stayers” (59 percent vs. 41 percent), both moves also occurred independently for many children and households.
Moving homes was the highest for kids that switched schools within their educational level, but even for this group, 31 percent of children who made nonpromotional school changes did so without making a residential move. And looking at school stayers, we see that even 41 percent of these children moved homes.
School changing was more prevalent for some children than others:
- White children switched schools less than black or Hispanic children.
- Children in owner-occupied homes switched less than those in rented homes.
- Household income was not higher or lower on average for school stayers or changers.
- Kids with parents who received safety net programs such as SNAP and public housing were more likely to change schools.
- Parents’ educational attainment was not linked with whether their children switched schools.
- Kids with parents reporting greater satisfaction in their schools were more likely to stay.
These patterns of residential and school mobility collectively add up to neighborhoods and schools that are fluid, not static, in nature. But are policy and practice set up to accommodate this flux?
Stay tuned for tomorrow’s post on whether school switches actually helped kids reach higher-performing schools, and if so, under what conditions. In a third post, I’ll explore how place-based programs like Promise Neighborhoods should grapple with the mobility issue.
Filed under: Economy |Tags: homes, low-income, moving, neighborhoods, schools, Urban Institute Add a Comment »
| Posted: April 18th, 2014
Why include economic development in a report about housing in Indian Country? Anywhere in the U.S., the local economy drives economic wellbeing and people’s ability to improve their housing conditions, and Indian Country is no different. Both on and off tribal lands, employment and business opportunities affect housing needs, including people’s ability to afford, maintain, and form new households. Our new HUD-funded study of American Indians and Alaska Native (AIAN) housing conditions provides the latest information on economic development in Indian Country—and why it matters for housing.
In the 1990’s, Indian Country’s economic development improved substantially, attributed in large part to the shift in U.S. government policy furthering self-determination for tribes by allowing them to control more jobs, take over program and activity operation, and better allocate federal funds to meet their needs. With more freedom to select their own path, many chose to strengthen their own governance to foster entrepreneurship.
Until the recession in 2008, Indian Country’s economy continued to prosper and even outperform the rest of the nation in some growth indicators:
- New business ownership outpaced the rest of the US. The number of Native-owned businesses increased nationally by 7 percent, growing from 102,000 in 1992 to 201,000 in 2002, compared to just 2.9 percent for all U.S. businesses. This growth continued over the next few years and by 2007, there were 237,000 Native-owned businesses.
- Employment grew faster than the national average. From 2000 through 2007, employment in Native counties (contain all or part of one or more tribal areas) grew by 303,000 per year. The Native American county growth rate was 1.4 percent per year, dwarfing the 0.36 percent average for all non-Native American counties.
- Lending to support economic development increased. Native Community Development Financial Institutions (CDFIs), including loan funds, credit unions, and banks, improve access to capital by providing credit and other financial services to underserved tribal communities. The number of certified Native CDFIs grew from only three in 2000 to 72 by mid-2012. Since 2002, the Treasury’s CDFI Fund has awarded more than 175 grants totaling $31 million to Native CDFIs, which serve nearly 100 tribal communities.
- Businesses and economic development activities diversified. Tribally-owned business expanded and diversified both on and off reservations to include more hotels, resorts, golf courses, manufacturing, oil extraction companies, natural resources, and wild game hunting. Gaming has also been an important force behind economic growth in selected areas of Indian Country, though a large share of revenues flow to a relatively small number of tribes and benefit a small percentage of the AIAN population.
And then came the recession. Though their economy was strong through 2007, the recession hit Indian Country hard. From 2007 to 2010, the number of jobs dropped by 3.0 percent per year compared with a 2.3 percent drop annually for the rest of the country. The effects were uneven across regions: places that performed best earlier in the decade typically faced the sharpest reversal later on. And despite a cushion from federal subsidies, competition for federal and state funds, a loss of private revenue, and the overall need to do more with less took a toll on CDFIs.
Is there hope for housing? The economic progress that began in the 1990s may have stalled in 2008, but the improved economic and government infrastructure provides a much more favorable environment for economic development and entrepreneurship. Native CDFIs have used various federal economic development funding sources, such as New Markets Tax Credits and corporate funding, to support small business lending and attract manufacturing companies to reservations.
The opportunities to expand business financing as well as entrepreneurial energy hold promise for economic development in Indian Country. New data collection under way in our housing study will further explore the relationship between economic development and housing.
More research is available on the Urban Institute’s new Native American Communities landing page.
Filed under: Economy |Tags: AIAN, Alaska Natives, economics, housing, Indians, Native Americans, Urban Institute Add a Comment »
Sarah Rosen Wartell
| Posted: April 17th, 2014
As the global population continues to rapidly urbanize, government, enterprises, and residents are beginning to use data more regularly to tackle pressing urban challenges. Embracing data can help to develop and eventually achieve the Sustainable Development Goals, which will succeed the Millennium Development Goals when they expire in 2015.
That’s why I was heartened to see such emphasis on the rigorous and creative use of data at last week’s World Urban Forum (WUF) in Medellin, Colombia. Each year, the United Nations Human Settlements Programme (UN-Habitat) convenes WUF to discuss issues facing cities and communities around the world. This year’s forum focused on “Urban Equity in Development – Cities for Life.”
As a speaker on WUF’s Basic Services: Local Businesses For Equitable Cities dialogue, I had the chance to discuss how data can empower the private sector to help improve basic services and infrastructure in quickly growing cities around the world.
By making data more available and accessible, governments at various levels can highlight market opportunities for services with social benefits
Even in extremely low-income areas, there is an economy, but residents usually pay too much and get too little. If there were better information about the needs and purchasing power of these communities, it could prompt better businesses to bring in higher-quality services to meet the demand.
For example, in the United States, NGOs and the government documented neighborhoods where people had limited access to fresh foods. Research revealed the SNAP benefits that poor residents received were frequently spent outside the neighborhood or at fast food providers.
Having that information at hand can allow community development financial institutions to lend capital to bring in stores that offer fresh food to poor communities. Increased competition improves the quality of service. Investors are better able to lend when they have evidence of aggregate purchasing power, even if each consumer has only a few dollars to spend.
Residents can collect data on their own communities that benefit government and private service providers
It is difficult for the public or private sector to provide services to communities in which existing amenities, challenges, and infrastructure are not well documented. Citizen-generated information can supply the data needed to inform service provision and investment decisions.
In Solo City, Indonesia, the nonprofit Solo Kota Kita asks local leaders to submit basic information about their communities: number of households, water use, school attendance, land tenure, and more.
The data are turned into a Mini Atlas, a neighborhood profile accessible to all citizens. With assistance from USAID, UN-Habitat, and the Ford Foundation, the city government sponsors this program and uses the data to support policy design and public projects.
Entrepreneurs can support basic public services with creative data collection methods
Cell phones and other basic information technology can generate information that both government and the private sector can use to target basic services where needed and deliver them more efficiently.
I recently learned about NextDrop, a business in the southern state of Karnataka in India. There, people used to sit around waiting for the unpredictable moment when water services would flow. Now citizens pay a small fee to receive text messages when water will be switched on, so they can be ready to collect water to meet their immediate needs.
In another example, data collected by a company called ShotSpotter could have application in cities around the world. ShotSpotter uses sensors to gather information about gunshots in various cities in the United States to aid policing and help decisionmakers develop crime-fighting strategies. Researchers with the Urban Institute’s Justice Policy Center are also using this data to help improve the quality of policing in urban neighborhoods.
Principles for data and service delivery
These are just some of hundreds of examples of how public or citizen data can strengthen government and private sector service delivery. But whether government is a data provider or user, it has a core responsibility to embrace the power of data to improve lives of residents and make cities more equitable. I believe governments must establish:
- an open data culture,
- a respect for evidence-based policy,
- a norm of openness and transparency, and
- a system of accountability to ensure that open data leads not merely to new business opportunities, but to improvement in the services and opportunities available to citizens.
No matter who collects and provides the data, these principles facilitate the spread of information—information that will improve private and public provision of services and citizens’ basic quality of life.
As the international community turns its attention to the creation of the Sustainable Development Goals, it must embrace the growing capacity for data collection and take advantage of the opportunities it presents.
Photo by the Urban Institute's Sharon Carney, of Sarah Rosen Wartell at the World Urban Forum.
Filed under: Economy |Tags: cities, data, development, global, poverty, Urban Institute, WUF Add a Comment »
| Posted: April 17th, 2014
When I was a kid in Boulder, Colorado, one of my soccer teammates had asthma, but, like a lot of kids with that condition, it didn’t slow him down. Although asthma affects nearly 1 in 10 children, it is a well-understood and highly treatable disease.
It’s therefore concerning that so many low-income kids—often black or Latino—in Washington, DC, suffer regular, negative consequences of asthma (among the highest rates in the nation). I suspect that’s because it’s yet another example of the pernicious cycle of poverty. In fact, research shows that children from low-income families have far less control over asthma and higher morbidity from the disease than their higher-income peers.
Evidence is mounting that poverty is a vicious cycle that produces other negative outcomes, which in turn deepen poverty. For example, children born into poverty are much likelier to be poor adults, and so their kids are likelier to be poor. The rise of long-term unemployment has plunged many families into poverty, and being in poverty increases your chances of being unemployed for a long time. Austerity measures like sequestration cuts to unemployment insurance and food stamps all compromise family finances and deepen the cycle.
Is the same thing playing out with asthma in DC? A qualitative study by my Urban Institute colleagues sheds some light on the problem.
Poverty puts up barriers to treating asthma
For DC’s large low-income population, it’s clear that where you live matters for getting effective asthma treatment. Families in many communities have poor access to transportation to the doctor. They also have fewer available doctors. And many low-income, especially single, parents cannot take time away from work during doctors’ business hours.
What’s more, much low-income housing comes with a host of asthma triggers, whether it’s proximity to pollution or other toxins in the neighborhood or, as many interviewees reported, exposure to dust, mold, or other negative conditions within the home.
Asthma can also get in the way of a child’s education because these problems get compounded at school. Low-income kids tend to need even more vigilant asthma monitoring and treatment at school, for which most schools are simply not equipped. And when low-income families either don’t have the resources to get a second school inhaler or the bandwidth to ensure that kids carry one every day, asthma problems can compound at school.
But asthma can also lead to greater poverty
Poverty can worsen asthma, but worse asthma, in turn, can deepen a family’s poverty.
Many parents reported that, in order to care for their children’s asthma, they had to take time off from work. But many low-income parents don’t have paid time off or flexible schedules, so they were fired for taking too much time or quit preemptively because they knew they would get fired anyway.
So, for many families, there is a direct tradeoff between treating a child’s asthma and being employed. If they choose treating the asthma, they can lose their income, making it even harder to get good medical care, move into a healthy home and neighborhood, and afford the necessary medication and equipment to treat asthma.
A byproduct is that those families often end up getting expensive, publicly funded treatment in the hospital’s emergency department.
Can we break the cycle?
To be clear, these stories are anecdotal and do not constitute a statistically sweeping claim. But they add to the growing mountain of evidence that poverty is a trap with a clear conclusion: if we spend money now to break people out of the trap, then they’ll be healthier, more productive and self-sufficient, and in less need of support later.
It’s an investment: spend some now, save more later.
There are some obvious ways to break a poverty-asthma trap. We can more vigorously enforce housing quality regulations and mandate that employees with documented asthma needs be exempted to care for their children. We could also incentivize clinics to maintain non-standard hours and work with organizations like ImpactDC – an emergency department intervention program - to build better asthma-treatment routines into low-income neighborhoods and schools.
Image: Standing outside her home on East Street in downtown Raleigh, N.C., Lonnette Williams, right, talks Wednesday, Oct. 5, 2005, about living in Raleigh's South Park neighborhood. Children living in low-income areas like South Park, which has particularly poor quality air, are at greater risk of asthma problems. (AP Photo/Karen Tam)
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Filed under: Economy, Health Care |Tags: asthma, DC, health care, jobs, poverty, Urban Institute Add a Comment »
| Posted: April 14th, 2014
The deadline to file our taxes has arrived once again. While this deadline looms over many of us, for low-income working families, it can be an opportunity for greater economic security.
Why? Tax credits, such as the earned income tax credit (EITC), provide a substantial infusion of resources to low-income working families, making tax time a time when they can meet their current financial obligations, pay down their debt, and maybe save a little. For a married couple with two children, for example, the EITC can be as high as $5,372 this year.
The benefits and opportunities are considerable, but for the roughly 17 million adults without bank accounts, it can be difficult and expensive to get access to that refund. The unbanked often turn to expensive check-cashing services or pay high fees on refund anticipation checks or loans to avoid long waits for a paper check.
What can help? Offering people a reasonably priced financial product at tax time, a product that provides electronic access to tax refunds via direct deposit and can be used thereafter for everyday transactions such as paying bills, receiving paychecks via direct deposit, and withdrawing money from ATMs.
In 2011, the Department of the Treasury initiated the MyAccountCard, a direct mail pilot program offering low-income unbanked and underbanked families the option of receiving their tax refund on a prepaid card. The reloadable MyAccountCard could then be used on an on-going basis for everyday transactions.
The pilot evaluation, which I conducted with my colleague Signe-Mary McKernan, found that the MyAccountCard appealed most toits target population: unbanked adults. Those most likely to be unbanked were three times more likely to apply for the card and twice as likely to deposit their tax refund into the card account, compared with those who were most likely to have a bank account.
There was also relatively high repeat use of the MyAccountCard for tax refund deposits. Nearly a quarter (23 percent) of people who directly deposited their tax refund into the MyAccountCard in year one did so again the following year.
What influenced MyAccountCard usage? Cost was a big factor. A $4.95 monthly fee decreased applications by 40 percent and the likelihood of depositing a tax refund into the card account by 50 percent, compared with no monthly fee. The linked savings account and card messaging (safety vs. convenience) did not impact take-up or use.
The federal government isn’t the only entity in the prepaid card market. Tax preparers have their own prepaid card products, but electronic receipt of refunds onto these cards is available only to filers using that preparer. Some states also offer prepaid cards, but these generally only allow people to spend down their state refunds—the card can't be used to accept federal refunds or as an ongoing account to manage finances and build savings.
The federal government offering a reloadable prepaid card at tax time can help consumers get their tax refunds quickly and safely, avoid expensive alternative financial services, and connect them with the financial mainstream. It can also save the government money, as electronic delivery of tax refunds cost roughly one-tenth as much as paper checks.
Access to the prepaid card should be easy, such as by including the card as an option on the tax form. Because of the national scale, the government would be in a position to negotiate well-priced products and provide oversight to ensure that the product and its pricing are transparent to consumers.
A program like the MyAccountCard also provides a credible platform for implementing an EITC saver’s bonus to promote and incentivize saving among low- and moderate-income tax filers—giving them a financial incentive to save and build wealth that many high-income people enjoy.
Prepaid cards at tax time will make tax time a little easier on low-income unbanked families—and provide them with a valuable tool to cover their banking needs all year long.
Tax image from Shutterstock.
Filed under: Economy |Tags: low-income, poverty, refund, tax, unbanked, Urban Institute Add a Comment »
| Posted: April 14th, 2014
Under current law, Social Security’s trust fund will run dry by the late 2030s. This doesn’t make Social Security a Ponzi scheme, and it doesn’t mean young workers will get no (or even dramatically reduced) benefits. But it does mean that we face a long-run shortfall.
Aside from dramatically restructuring the whole system, there are only two options, mathematically, to cover it: higher taxes or lower benefits.
The current default policy is across-the-board benefit cuts: sometime before 2040, the trust fund will be gone and monthly receipts simply won’t cover scheduled payments.
But making policy by default is rarely a good idea, and my colleagues have proposed and thoroughly analyzed many options for reforming the current system. Although each idea necessarily involves either lower benefits or higher taxes (or both), the three I outline below seem pretty reasonable, especially in combination.
I say reasonable because each would either bring us closer to policy similar to what we’ve agreed upon in the past or would address major demographic changes in our population. They’re reasonable, too, because one way or another we’ll pay for the shortfall; the choice is only whether we’ll do it with a thoughtful plan.
Here we go—it’s about to get wonky.
Increase the Social Security tax cap. Social Security taxes are capped: you pay taxes on all income you make up to $117,000 this year; any income above that cap is not subject to the tax.
In the early 1980s, the cap covered about 90 percent of all wages in the economy. Since then, rapid income growth at the top of the distribution means that the cap now covers only about 84 percent of all wages. If the share had remained constant, 2014’s cap would be almost $230,000.
Eliminating the cap altogether could reduce the long-term deficit between 70 and 86 percent, depending on whether high-income earners also received higher benefits in return for paying more tax. Raising the cap to cover 90 percent of wages again could lower the deficit by 28 percent, even if high earners receive higher benefits.
The tradeoff is that the higher taxes might discourage higher-income people from working, which would itself cost the system some solvency.
Increase the Social Security tax. Social Security payroll taxes increased steadily between 1955 and 1990. But for nearly 25 years, they’ve remained constant at 12.4 percent, split by law between employers and workers.
Raising the rate by just 2.7 percentage points would add 50 years of solvency to the system and reduce the need to lower benefits in the future. (That tax increase would be split between employers and workers, though employers would likely pass some or all of their burden on to their employees through lower wages.)
A drawback, again, is that higher taxes (or lower wages) may discourage work. It might also increase the regressivity of the tax. And it could reduce minimum-wage employment if employers hire less in the face of higher labor costs.
Increase the retirement age. Current law increases the full Social Security retirement age gradually from 65 to 67 for those born between 1938 and 1960. But it remains 67 for everyone born after 1960, despite a half century of health and longevity gains coupled with decreasing shares of physically intensive employment.
Compared with workers born in 1937, today’s workers can expect to spend seven or eight full years more in retirement, on average. Gradually increasing the retirement age from 67 to 69 by birth cohort and then indexing it to life expectancy gains would reduce the long-term deficit by 44 percent.
A huge drawback is that life expectancy gains and reductions in physically demanding work have not benefited all workers evenly. Many may simply be unable to work longer in their industry, or may not live long enough to benefit from a later retirement age.
So what? There are tradeoffs to all of those ideas, making meaningful reform politically difficult. But there is a huge tradeoff to doing nothing, too. If we thoughtfully plan how to cover the inevitable shortfall with a combination of the ideas above (and potentially others), we can also build in ways to mitigate potential harms along the way.
Follow me on Twitter. Illustration by Tim Meko, Urban Institute.
Filed under: Economy |Tags: millennials, ponzi, retirement, social security, Urban Institute Add a Comment »
| Posted: April 14th, 2014
Most Americans believe that higher education is important, that people who want to lead secure, comfortable lives should go to college—but that it is unaffordable for all but the wealthy.
We see headlines about college prices and we know that they keep going up, but do we know what it means for college to be affordable?
Most of the conversations about this issue focus on family incomes. Many families can and should help their children finance college, and we should think hard about how much parents in different circumstances can be expected to contribute. But other families are in no position to help, and many students are old enough not to even think about parental financing. Is college by definition unaffordable at any price for these students?
Clearly, a lot of students can and do pay for a big portion of college expenses on their own. We should really reframe the conversation to include the reality that students have to be able to pay for college. They may get help from their parents. They may get help from federal and state student aid. They may get help from other sources. But it is their investment in their futures and if the investment does not pay off, they will suffer the consequences.
This means that how much money people have before college is just a fraction of what matters. College carries lots of non-monetary benefits, improving and enriching students’ lives in ways that can’t be measured financially. But the earnings premium is a critical part of measuring college affordability. Will the earnings premium be high enough to pay the price of college—the price that remains after subsidies (including those from parents) are accounted for?
There are lots of colleges with a wide range of prices, and at most schools, students are paying very different prices to be there. Some students complete degrees and others don’t. Among those who do, there is a wide range of employment and earnings outcomes—even among those with degrees in similar fields.
So we can’t say for sure which options will end up being affordable for which students.
But we can ask the right questions. We can ask about available resources before, during, and after college. We can ask about which options are suitable for particular students. We can ask about the trade-offs involved in going to college instead of choosing alternative paths. And we can ask how the risks involved in this uncertain investment with a very high average rate of return should be shared between students and society at large.
Instead of asking whether college is or is not affordable, we should do a better job of tracking the many elements that go into college affordability and make that information widely available. We should know about sticker prices, net prices after aid, tuition and fees, living costs, books and supplies, parental incomes, student wages, household savings, the prices of other goods and services, and post-college earnings. And we should know not just averages, but about the variation in all of these metrics.
Reporting that prices are high and people are struggling is not enough to increase access to valuable postsecondary experiences. We need a more thoughtful approach to this vital issue.
Image from Flickr user Erik Weber (CC BY-NC-SA 2.0
Filed under: Economy |Tags: affordability, college, cost, debt, price, Urban Institute Add a Comment »
| Posted: April 10th, 2014
Aging populations in the United States, Japan, and many other countries will need future support and services that current public programs may not be equipped to handle. In Japan, where seniors are expected to reach almost 40 percent of the population by 2050, new technology is helping the country address the challenges of an aging society—and may provide lessons for us as well.
Last week, the Washington Innovation Network sponsored an event highlighting advances in information and communication technology (ICT) and their application to helping seniors live healthy and productive lives—what is referred to as "Silver ICT." The event, supported by the US-Japan Research Institute and Japan Science and Technology Agency, featured products that can support seniors in a variety of environments and enable them to safely age in place—that is, to grow older in their own homes and not in retirement communities.
Toshio Obi from Waseda University (Tokyo)—chair of the OECD-APEC Silver ICT project and coauthor of Aging Society and ICT—spoke at the event and introduced a number of technologies being developed by Japanese companies. Fujitsu's Raku-Raku smartphone, for example, is a touchscreen phone designed to be easier for seniors to use. SECOM's My Spoon robot is a device that makes it possible for physically handicapped people to eat on their own.
A demonstration project being carried out in Otsuki City (near Mt. Fuji) is testing Silver ICT ideas on a municipal scale. The project has three main components: e-Agriculture (many seniors in the area are engaged in farming), e-Health, and e-Tourism. In the e-Agriculture effort, for example, producers are connected electronically to warehouse and distribution outlets to increase market access, allowing more seniors to remain economically productive. A full report on the Otsuki project will be released later this spring.
Silver ICT still faces many barriers to wide-scale adoption, as Majd Alwan, director of LeadingAge's Center for Aging Services Technologies, explained at the event. He cited the lack of awareness of available technologies among both potential users and service providers, variable evidence on return on investment, and the need for sustainable business models as current impediments. Nevertheless, Alwan emphasized the number of products that are being used today, including electronic health records, telehealth systems, and medication management solutions. He advocated moving from pilot projects to large scale demonstration efforts and collecting more data on performance and results.
In the United States, seniors will make up about 20 percent of the population by 2050. Using technology to meet their needs may help them live more independently and self-sufficiently, enhance the quality of their lives, and lower the stresses being placed on the healthcare system. Further international collaboration in this area can benefit all countries in providing for a better quality of life for their aging populations.
The Raku-Raku smartphone is designed to be easier for seniors to use. Photo courtesy of Fujitsu.
Filed under: Economy |Tags: age, Japan, population, seniors, technology, Urban Institute Add a Comment »