Spring 2015 - 61375 - PA393L - Advanced Policy Economics

Political Economy of American Poverty

Course Objectives

The purpose of Advanced Policy Economics is to apply economic analysis to specific policy topics. This section focuses on poverty issues in the United States. Specifically, the course covers (a) the economic experience of low-income families, (b) technical issues in measuring and analyzing poverty-related data, and (c) social policy strategies dealing with poverty and related problems. This section of APE is both an “analytic course” that applies microeconomics theory and quantitative modeling to policy analysis and a “survey course” on poverty issues in this country.

Course Structure

Input from members of the class is welcome. The tentative plan at this point is:

The first module (4 sessions) provides an overview of intellectual perspectives, including economic criteria for analyzing social programs, historical framework for studying anti-poverty programs, and political views on current policy debates.
The second module (2 sessions) covers technical issues, including empirical data, measurement issues, and analytic techniques in research on income and poverty.
In the third module (6 sessions), the instructor will lead discussions on poverty-related policy areas: participation of low-income families in various markets (labor, financial, housing) and programs (social insurance, public assistance, tax expenditures). There will be equal emphasis on programmatic operations and on micro-analytic evaluation.
Assuming a small enough class size, module four (3 sessions) consists of teaching by class members on specific topics to be decided at the beginning of the semester.

Learning Experiences

The learning element most unique to this course is analytic reading:  the meticulous and slow reading of theoretical or empirical papers, to train our ability to reflect on microeconomics reasoning and econometric logic. This is the most important part of the course. There will be one such analytic article per week for most of the semester.
Second, general knowledge in current affairs is an integral component of this course. Course requirement includes reading daily news from a mainstream media venue, both global and local; and weekly magazines such as The Economist.
Members of the class can expect to gain a big-picture framework for thinking about poverty and social policy. This is covered in Modules 1 and 2.
Fourth, class members will also get acquainted with the operational mechanics of selected antipoverty programs. This will be covered in instructor presentations in Module 3 and class presentations in Module 4.
A mid-term integrative learning experience is proposed to help weave together all the learning experiences listed above.
Throughout the semester, each class member will conduct a semester research project independently of course progress. Depending on class size, this research process will be either individually based or team-based. It culminates in a teaching session toward the end of the course.


Proficiency in both microeconomics and regression analysis is essential. The language of differential calculus will be used albeit infrequently. These prerequisites can be fulfilled by successful completion AMP, IEM, and (at least concurrent attendance of) an econometrically oriented section of AEM; or their equivalents in other departments.

Reading Preparations During Winter Break

Class members are asked to read two non-technical classics on economics perspectives:

Milton Friedman (1963). Capitalism and Freedom. Chicago, IL: University of Chicago Press. [Chapters 1, 2, and 6-10; New edition with identical content was released in 2003]
Arthur M. Okun (1975). Equality and Efficiency: The Big Tradeoff. Washington, DC: Brookings Institutions. [All chapters]

Additional preparatory materials will be suggested.

Logistical Issues

Course Canvas site will be available by mid-November, along with a tentative draft of the syllabus. The syllabus is subject to amendment and approval by class members in early January. Students who miss the November 7 registration deadline but who decides to take this course during winter break should send an email to patwong@austin.utexas.edu as soon as that decision is made, to avoid missing important preparatory materials for this class.