Linking policy and outcomes: A simulation model of poverty incidence

Many states are striving to meet public demand far accountability by "bench marking"-setting social goals for the state and tracking progress in meetin g I:he goals. However, states are finding it difficult to set realistic tar gets and to assess the impacts of policy on achievement of the targets with out a framework that models the relationships among policy targets, policy actions and social and economic forces outside the control of policymakers. This paper develops a dynamic simulation model of one "'benchmark" (povert y incidence) in Oregon, :linking transitions into and out of poverty to var ious events (increased earnings, or having a child as a teenager, fbr examp le), and linking these events to policy. The simulation results suggest tha t, with current policies, Oregon will come close to achieving its poverty b enchmark target of 11 percent by the year 2000 if economic conditions remai n favorable. The model is used to examine the impact on poverty incidence o f three policy strategies: reducing high school dropout and teen pregnancy rates, increasing the effectiveness of social support programs to JOBS part icipants, and boosting job growth. The simulation results suggest that when assessing the state's performance or "grading" the observed trend in the p overty benchmark, policymakers should take into account the performance of the state (and national) economy. The impact of policy efforts to reduce po verty is limited because many poverty spells are caused largely by events n ot affected by current state policies.