The Role of Data in Public Policy [email protected] .

The Role of Data in Public Policy

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www.shillington.ca

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Accuracy and / or Truthfulness• Advertising

• Accounting

• Public Policy / Government Documents

Accuracy is good enough

"Canada's job creation exceeded Germany, France, Great Britain and Italy."

Mr. Donolo defended the statement as accurate, (the charade depended on massive German job losses). Asked if that was good enough a standard, he replied that he thought so.

Overview of Presentation1. How do we measure things…

2. Do data matter?

3. Spin… absolute misrepresentation


– By what metric, how often, how published, by whom

– How current are our statistics.

• Stock market, exchange rates.

• Unemployment

• GDP

• poverty

2. Do data matter?


How do we measure things1. Changes over time…

“Government spending on the arts has increased by 18%”“Government spending has not increased as a percent of the GDP”. “The Government is spending more on X than any previous

government.”

• We could report changes in dollars or as a percent. • We may, or may not, report values adjusted for inflation.• We may, or may not, adjust for population growth. • We could report values in dollar times or as a percent of GDP,

percent of government spending.

• Andrew Coyne

How do we measure things1. Changes over time…

• We can compare the proposed benefit level to what it would have been otherwise.

• We can compare the proposed benefit level to what it is now (constant or current dollars).

• We can choose our geography; are we talking municipal, provincial, federal, or all combined.

• Are we talking monthly benefits or annual benefits.

Impact of 1992 Budget1991 1992

Family Allowance $35 per month ($419 per year)

Refundable Child Tax Credit

$601 max per child per year reduced for families with incomes over $25,921

Child Credit (reducing income taxes)

$71 per child off income taxes

Value of system to poorest of families

$ 1,020

$419 at $35 per month + $601 delivered annually

$ 1,020

at $85+ per month

1 This comparison excludes present benefits under the child credit and refundable child tax credit which are not delivered monthly.

Federal Budget Documents

"Some 1.4 million families with 2.5 million children would receive higher federal benefits."

Working Together Towards a National Child Benefit System, Finance Canada, Feb. 1997.

Budget of 1992"Lower-income families with one child will receive a monthly payment of up to $144, significantly more than the monthly payment of $35 they now receive. Approximately two million families with incomes below $50,000 will receive larger monthly payments than they do now."

Health and Welfare Canada, The Child Benefit - A White Paper on Canada's New Integrated Child Tax Benefit, Feb. 1992.

Before a house committeeMr. Karpoff: Your officials and your parliamentary secretary have

confirmed that people earning less then $3,750 will receive no more under this plan. ...

Mr. Mazankowski: The difference with this program is that they won't have to wait until the end of the year or go to a tax discounter to get their money.

Mr. Karpoff: But they will get no more. Mr. Mazankowski: From family allowance, their monthly cheque will increase from

$35 to $85. Mr. Karpoff: But they'll get no more money in a year. Is that not true? ...[here an official runs to the rescue of his trapped Minister]

... Finance Official, Department of Finance: "If I could add this, you're quite right on the

actual total dollars; there isn't more. However, what's really quite important here and one of the interesting features of this program, and one of the reasons it's such a gem from a bureaucrat's point of view, is that it delivers assistance in a very timely way to the people who need it ..."

Media Home Run

“The plan will allow Ottawa to make monthly payments of up to $144 for each child in a low-income family, four times the current family allowance. About two million families with incomes below $50,000

a year will receive larger monthly payments than they now do."

Globe and Mail

-------------------------------------------------------------------------

Official before house committee

“you're quite right on the actual total dollars; there isn't more. ”

White Paper for the 1992 Budget

Finance Official: We have mailed out 350,000 copies of the white paper that we tabled at the time of the February Budget, which probably, in terms of white papers, makes it a runaway best seller. ...

Health and Welfare Official: The intent [of the white paper] was to inform Canadians of the changes.

Standing Senate Committee on Social Affairs, Science and Technology, Oct. 7, 1992.

Child Tax Benefit – 1997 • Federal Increases in the Child Tax Benefit

• Most provinces claw-back increases from welfare so that those on welfare see no benefit.

Assurances to International Bodies…‘Families on social assistance will continue to receive at

least the same level of income support from governments as under the previous arrangement.”

‘ …a new National Child Benefit (NCB) system was implemented on July 1, 1998 as a collaborative initiative by federal, provincial and territorial governments; about half of the beneficiaries are single-parent families headed by women.’

Canada, July 1999, Implementing the Outcomes of the World

Summit on Social Development: Canada’s Response, Canada’s submission to the U.N.)

What Government said in Geneva about Canada

"As far as he [ --------] could tell provinces were still meeting basic

needs for social assistance, but with approaches that were more

flexible than previously."

"A new national child tax benefit would increase the economic

autonomy of low-income families, he added. "

Salary of Male and Female Faculty Mythical Unversity

Male FemaleAverage SalariesOverall 80,000$ 60,000$

Averages for Comparison: Are comparing comparable populations?


Male FemaleAverage SalariesOverall 80,000$ 60,000$ Social Science 40,000$ 40,000$ Fine Arts 30,000$ 30,000$ Mathematics 80,000$ 80,000$ Computer Science 120,000$ 120,000$ Numbers

Total 400 400 Social Science 90 110 Fine Arts 55 125 Mathematics 96 99 Computer Science 159 66


Male FemaleAverage SalariesOverall 80,000$ 60,000$ Social Science 40,000$ 50,000$ Fine Arts 30,000$ 38,000$ Mathematics 80,000$ 90,000$ Computer Science 120,000$ 135,000$ Numbers

400 400 Social Science 100 123 Fine Arts 40 143 Mathematics 110 125 Computer Science 150 8

Ratio of Female to Male Average Earnings

for those Employed Full-Time Full-Year

by Education and Marital Status, 1998

Married

Divorced/ Widowed/ Separated

Single (never married) Total

Less than H.S. 60% 67% - 63%

H.S. Graduate 71% 79% 87% 75%

Some PSE 66% 76% 91% 70%

Degree 67% 76% 97% 72%

Total 68% 75% 96% 73%

Source: Calculatins by the author using the Statistics Canada Survey of Labour Income Dynamics

Ontario's Income Tax Cut by Income GroupIncome Groups In dollars

less than -$15,150 $145$15,150-$19,675 $240$19-675-$24,135 $360$24,135-$28,610 $480$28,610-$33,130 $605$33,130-$38,245 $765$38,245-$44,890 $975$44,890-$54,040 $1,275$54,040-$68,025 $1,710$68,026 + $3,450Total $1,001

$255,000 + $15,540

Ontario's Income Tax Cut by Income Group

Income Groups In dollars

As % of Previous

Tax

less than -$15,150 $145 41.4%$15,150-$19,675 $240 34.1%$19-675-$24,135 $360 33.9%$24,135-$28,610 $480 33.1%$28,610-$33,130 $605 32.5%$33,130-$38,245 $765 31.5%$38,245-$44,890 $975 30.9%$44,890-$54,040 $1,275 30.5%$54,040-$68,025 $1,710 30.3%$68,026 + $3,450 25.4%Total $1,001

$255,000 + $15,540 18.0%

Ontario's Income Tax Cut by Income Group

Income Groups In dollars

As % of Previous

TaxAs % of Income

less than -$15,150 $145 41.4% 1.2%$15,150-$19,675 $240 34.1% 1.4%$19-675-$24,135 $360 33.9% 1.6%$24,135-$28,610 $480 33.1% 1.8%$28,610-$33,130 $605 32.5% 2.0%$33,130-$38,245 $765 31.5% 2.2%$38,245-$44,890 $975 30.9% 2.4%$44,890-$54,040 $1,275 30.5% 2.6%$54,040-$68,025 $1,710 30.3% 2.8%$68,026 + $3,450 25.4% 3.1%Total $1,001

$255,000 + $15,540 18.0% 3.5%

Median Income of those at the Poverty Line for Various Measures - 2008 - Ontario - Single Person

$-

$5,000

$10,000

$15,000

$20,000

$25,000

LICO (1992) - BeforeTax

LICO (1992) - AfterTax

LIM - Before Tax LIM - Ater Tax MBM - lowest

Inco

me

Poverty Rates for Manitoba - 2000; Females 65+

0%

5%

10%

15%

20%

25%

30%

LICO-Before Tax LICO-After Tax LIM-After Tax MBM

LICOs based on Spending Patterns in Various YearsCurrent Dollars

$-

$5,000

$10,000

$15,000

$20,000

$25,000

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

Year

Inco

me

1968 based

1972 based

1986 based

1992 based

* Family Size 1 in cities of 500,000+

Public Income Subsidies as % of Income

0% 10% 20% 30% 40% 50% 60% 70% 80%

1,000-10,000

10,000-20,000

20,000-30,000

30,000-40,000

40,000-50,000

50,000-60,000

60,000-70,000

70,000-80,000

80,000-90,000

90,000-100,000

100,000 +

Fa

mily

Inc

om

e

% of Income

OAS/GIS CPP Pensions

Average Dollar Value of Public Income Subsidies

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000

1,000-10,000

10,000-20,000

20,000-30,000

30,000-40,000

40,000-50,000

50,000-60,000

60,000-70,000

70,000-80,000

80,000-90,000

90,000-100,000

100,000 +

Fa

mily

Inc

om

e

Average Value

OAS/GIS CPP Pensions


2. Do data matter?

– Setting the public consensus –

• Makes more real

– Margaret Mitchell

– GIS take-up example

– Climate change

– CPP Retroactivity - $1.5 B over 5 years

– Once you’ve got the attention… how much is this going to cost.



2. Do data matter?


What is “Spin” ?

• Misrepresentation by selective use of information. Accurate statements may still be misleading

• Tools for Spin

– Time is a slippery concept…

• real dollars or current dollars.

• months and years.

• choice of base case.

– Federal or federal/provincial benefits

– Benefits measured as $’s, % change or % of income.

1987 Version of “Fairness”"Exempting food from sales tax gives higher-income people a

greater absolute tax benefit than those at lower-income levels. This is because higher-income people spend more on food and, in particular, more on expensive foods and restaurant meals.

"This result is generally true for most basic commodities. Exemptions provide grater relative benefit to lower-income households but greater absolute benefits to higher-income households. …

The refundable, prepaid credit accomplishes the goal of enhanced fairness."

(The White Paper, Tax Reform 1987, June 18, 1987)

"Another instrument for addressing fairness in sales tax burdens is to exempt from taxation some commodities that are more heavily consumed by low-income individuals. Key examples are the tax-free treatment of basic groceries ….”

(Tax Fairness, Finance Canada, Budget of February 1997).

E.I. Issues

• Access to EI Benefits

• HRDC:

– “88% of the Paid Labour Force would be eligible for EI benefits if they were laid off.”

• Canadian Labour Congress:

– “only about 35% of unemployed Canadians receive EI benefits.”

Impact of EI on marginalized Canadians

“Overall, there are many important messages about the incremental impacts of EI showing that the EI reform policy is producing results as intended. The generally positive findings are tempered by the recognition that the effects are different for different sub-groupswomen, youth, low-income groups

Spinning the language

“…the quality of academic writing is fair to good in most reports. That being said, the committee has suggested editing to replace some technical terminology that may not seem value-free in popular discussion (e.g.

Internal HRDC documents obtained under Access to Information

EI tax, regressive,winners-losers, inequitable, etc.)

Evaluation of the Family Income Supplement of EIFinally, in terms of the gainers and losers, men have in

general gained access to the programme, as have lone mothers, while married mothers are the biggest losers. For women, approximately 29 per cent received DR and 14 percent received FIS. Whereas, for men, approximately 8 percent received DR and 9 percent received the FIS. The decline in access to family-related benefits is particularly pronounced for married women, a drop from approximately 29 to 6 percent. Thus, the FIS is disadvantageous for women, particularly married women.

“While the information reported is factually correct, in many cases the Commission did not report all the key finds and emphasized positive findings.” “However, we found that reporting of evaluation results is often selective…” Auditor General’s report…

“Not all persons would be equally believed, Demerzel. A mathematician, however, who could back his prophecy with mathematical formulas and terminology, might be understood by no one yet believed by everyone.” ----------------------------------

Prelude to FoundationIsaac Asimov

“Second, in 1970, median income of married women between the ages of 60 and 64 was $0. Indeed, 55% percent of these women reported receiving no income in 1970. Assuming that a 60 to 64 year old married woman with median income of zero was married to a 65 years of age or older male receiving the median income of $ 2,800 for 65 and older males, the implied family income would have been $2,800 or $ 1,400 per person. The married women in this family would have received less income than women age 60 to 64 in of any other marital status, and married men age 65 and older would have been receiving less income than men of other marital states who were 65 and older.” A Report in the Matter of Collins versus the Queen

A Professor of EconomicsUniversity of Toronto