Using Big Data to Lift Americans out of Poverty

Senior person hands begging for food or helpWe’ve reached a dead end in the debate over poverty here in the United States. Liberals and Democrats say that all we need is to throw more money at the program, as if the trillions we’ve spent over the past 50 years were not enough. Conservatives and Republicans, while great at dissecting the failure of Great Society anti-poverty programs, don’t have much to offer in their place. No one, not even mean, skin-flinted conservatives like me, want to slash benefits willy nilly. No one wants a country in which poor children starve or poor sick people die from a sudden retraction of the safety net.

Is there a third way? Perhaps. From the small but magnificent country of New Zealand (run by the conservative National Party) comes a new idea: using Big Data to target welfare dollars where they are most needed. Allegheny County, Pa., (which includes Pittsburgh) is hiring a Kiwi pioneer in the field to apply the same approach to the American welfare system. Maybe Virginia should consider doing the same.

Writes Josh Eidelson with Bloomberg:

In 2010, when [New Zealand] Minister of Finance Bill English first convened a policy group to review welfare spending, government statistics showed half the 4,300 teenage single mothers receiving benefits in that country were likely to remain in the welfare system for 20 years, at a total cost of about $264,000 each. The government responded with $23 million to assign individual case workers to help teenage mothers finish school and find work. Now, after four years, the number of teenage single parents on benefits has dropped to 2,600.

Using data from welfare, education, employment, and housing agencies and the courts, the government identified the most expensive welfare beneficiaries—kids who have at least one close adult relative who’s previously been reported to child safety authorities, been to prison, and spent substantial time on welfare. “There are million-dollar kids in those families,” English says. “By the time they are 10, their likelihood of incarceration is 70 percent. You’ve got to do something about that.”

What works in a small, homogeneous country like New Zealand may not translate well to a large, multicultural country like the United States with a culture of inter-generational poverty and dysfunctional governance institutions. But, then, it’s just possible that the Kiwi model will work here. Given our impotence in combating poverty in the U.S., we don’t have anything to lose. If we frame the initiative as fiscally conservative (no one is asking to spend more money or raise taxes) and as pragmatically effective (we succeed at actually lifting at-risk people out of poverty), using Big Data to combat poverty would at least be a political winner.

— JAB