Universal preschool is most cost-effective, study finds

Source: Lillian Mongeau, Hechinger Report, April 10, 2018

Because preschool programs that include all kids boost low-income 4-year-olds’ reading scores, they could be a better way to spend tax dollars, according to a Dartmouth economist.

Related:
Does Universal Preschool Hit the Target? Program Access and Preschool Impacts
Source: Elizabeth U. Cascio, Dartmouth College, NBER, and IZA, December 22, 2017

This paper uses the rich diversity in state rules governing access to public preschool programs in the U.S. to study the relative cost efficacy of universal programs for poor populations. Using age-eligibility rules to construct an instrument for attendance, I find that universal preschool generates substantial cognitive test score gains for poor 4-year-olds. Preschool programs targeted toward poor children do not. These findings are robust to the definition of poverty, comparison group, and controls for test scores earlier in life, and cross-state differences in demographics and alternative care options are not decisive factors. Benefit-cost ratios of universal programs remain favorable despite their relatively high costs per poor child. An auxiliary analysis suggests that peer effects are an important contributor to universal programs’ higher productivity.

Retirement Planning Decisions: Choices Between Defined Benefit and Defined Contribution Plans

Source: Susannah Bruns Ali, Howard A. Frank, The American Review of Public Administration, OnlineFirst, Published April 12, 2018
(subscription required)

From the abstract:
As states move toward offering defined contribution retirement plans as an alternative or addition to traditional defined benefit pensions, they need to consider the preferences and long-term consequences for different groups of employees. This study looks at which plan employees choose when given the option of either a defined contribution or defined benefit plan. The strongest driver of that choice is education level where the most educated prefer defined contribution plans and the least educated stay in defined benefit plans. A unique contribution of this study is that we include region of origin as a study and determine that cultural differences influence plan selection. The study also explores the role of sex, age, and tenure. Challenging other studies on financial planning, these findings indicate that sex and age are not significant factors. This research was conducted using data from more than 4,000 employees from Florida International University and an interview with HR professionals. By understanding retirement preferences in a more nuanced way, we can better craft our approaches to retirement security and financial literacy training in public sector organizations.

Infrastructure Reality Check

Source: Sarah Crane, Regional Financial Review, Volume 28 Number 7, March 2018
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This article assesses the magnitude of needed U.S. infrastructure spending and compares it to current proposals. Further, it assesses the multiplier effect of such spending and finds that it is stronger during a recession and the immediate recovery period when there is considerable idle resources in the economy.

Workplace Data: Insights on Age

Source: Culture Amp, 2018

Key Take-away:
We hear in the news that the workplace factors that matter to millennials are different from older generations (Gen X and Baby Boomers). However, our data suggests that for the most part when it comes to their emotional connection (pride, commitment and motivation) to the company, perceptions of leadership and learning and development opportunities are consistently important, regardless of age.

Highlights:
● When we look across the top drivers of engagement for each of the different age segments, there is very little variation in workplace factors that impact employee engagement (pride, commitment, discretionary effort).

● Regardless of age, perceptions of and confidence in leadership, along with belief that the company makes a great contribution to personal development, are top drivers of engagement.

● Notably, and perhaps a bit surprisingly, the perception that employees can have a positive impact is more important to older than younger employees. Many storylines in the news and research on millennials suggest they care more about having a positive impact than Gen X or Baby Boomers. Our data suggests that Gen X and Baby Boomers are more likely to look for work where they can have a positive impact.

● Perhaps less surprisingly, older employees (who are likely more tenured and more senior) tend to be more likely to stick around and less likely to be looking for a job.

Related:

A new study says older people want the same things from a job as millennials: A good boss and a chance to change the world
Source: Rachel Sandler, Business Insider, April 15, 2018

Culture Amp Older workers are more likely to look for work where they can have a positive impact, new data shows. The study also found that regardless of age, workers want a job where they can develop personally and have confidence in leadership. The survey collected responses from 500,000 employees at 750 companies.

Federal Election Commission: Membership and Policymaking Quorum, In Brief

Source: R. Sam Garrett, Congressional Research Service, CRS Report, R45160, April 12, 2018

The Federal Election Commission (FEC) is the nation’s civil campaign finance regulator. The agency ensures that campaign fundraising and spending is publicly reported; that those regulated by the Federal Election Campaign Act (FECA) and by commission regulations comply and have access to guidance; and that publicly financed presidential campaigns receive funding.

FECA requires that at least four of six commissioners agree to undertake many of the agency’s key policymaking duties. As of this writing, the FEC is operating with four commissioners instead of six. Others reportedly are considering leaving the agency. One nomination to the FEC has been resubmitted during the 115th Congress; no committee or floor action has been taken on it to date.

It is entirely possible that the FEC will retain at least four commissioners and that the agency will remain able to carry out all its duties. If, however, the FEC loses its policymaking quorum—as happened for six months in 2008—the agency will be unable to hold hearings, issue rules, and enforce campaign finance law and regulation. This CRS report briefly explains the kinds of actions that FECA would preclude if the commission lost its policymaking quorum.

This report will be updated in the event of significant changes in the agency’s policymaking quorum or the status of agency nominations….

GO Methodology scorecard inputs updated for 2018

Source: Lauren Von Bargen, Heather Guss, Katie Townsend, Alexandra S. Parker, Leonard Jones, Naomi Richman, Moody’s, Sector In-Depth, April 10, 2018
(subscription required)

We have updated the institutional framework scores and the standardized adjustments that we use in the scorecard for our US local government general obligation (GO) methodology. In this publication, we provide the complete list of institutional framework scores for all major sectors with rated local government GO credits, as well as standardized scorecard adjustments we make for issuers in certain states and sectors to reflect factors not fully captured in the institutional framework scores. We use the scorecard as a tool in the assignment of ratings to GO debt. Adjusted scores generated by the scorecard are not necessarily reflective of assigned ratings, which we determine through a rating committee process.

Federal tax law to squeeze local governments in tri-state region

Source: Valentina Gomez, Nicholas Samuels, Leonard Jones, Moody’s, Sector In-Depth, April 11, 2018
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The recent federal tax legislation will have an adverse credit effect on local governments in the tri-state region of Connecticut (A1 stable), New York (Aa1 stable) and New Jersey (A3 stable). This is due to the region’s relatively high state and local taxes and unusually high home prices, particularly in the New York City metropolitan area. The impact, however, will vary from state to state depending on tax levy formulas, fixed cost burdens and state actions to blunt the effect of the federal changes

Competing spending demands and slowing revenue growth will stymie capital investment for many cities

Source: Coley J Anderson, Rachel Cortez, Alexandra S. Parke, Katie Townsend, Moody’s, Sector In-Depth, April 12, 2018
(subscription required)

US local governments are facing acute infrastructure needs following years of deferred maintenance. Local governments’ capital spending fell by 19% between 2009 and 2015, hastening a decline in the condition of public assets. This trend will continue through at least 2018. An increase in competing spending demands and a slowdown in property tax revenue growth will hamper many cities’ ability to stave off further deterioration in capital assets. Cities with growing revenue bases, ample financial reserves and low fixed costs are best positioned to increase capital spending. Cities with weak population growth, narrow financial reserves and high fixed costs will find it difficult to make capital investment a priority.