In 1968, President Lyndon Johnson founded the Urban Institute to “help solve the problem that weighs heavily on the hearts and minds of all of us—the problem of the American city and its people.” Early attempts to alleviate inner-city poverty and urban unrest were often stabs in the dark without a clear understanding of who would be affected and how. Among Urban’s first contributions was a microsimulation tool that forecasted the combined effects of federal antipoverty programs on family well-being. How did cash benefits, food stamps, tax credits, and other subsidies interact? And how successful were these policies at lifting families out of poverty? Since then, Urban Institute researchers have developed a portfolio of microsimulation models on taxes, health insurance, retirement security, and other issues. Each is built to predict how people, communities, and spending will be affected by proposed policy reforms—giving policymakers crucial information to better shape and target solutions.
The Urban Institute through the Years
When President Richard Nixon declared a moratorium on subsidized housing construction, Urban Institute scholars were among the first to explore how housing vouchers could address housing needs and support economic advancement among low-income families. Our research provided critical support for the bipartisan consensus that emerged in favor of this market-driven policy. Over the course of three decades, we tracked outcomes for voucher recipients and recommended design and implementation changes to strengthen the performance of the voucher program.
President Ronald Reagan’s election in 1980 set in motion dramatic domestic policy changes. To analyze the effects of these changes on people and communities, Urban’s researchers launched the decade-long Changing Domestic Priorities project. Findings touched on every sphere of policy and American life—including family income, economic growth, poverty, elder care, taxes, and fiscal choices—and placed the administration’s policies in historical perspective. This work revealed a mixed record in achieving such goals as shrinking government’s size and scope, reducing taxes, strengthening the military, streamlining regulation, and cutting entitlements.
As fragile democracies emerged in Eastern Europe, they faced practical questions about how to transition to a market economy, provide basic services, and generate tax revenues. Drawing upon Urban’s broad policy expertise and a decade of work in developing countries, our researchers provided hands-on help to local officials to strengthen the capacity of local governments, expand citizen participation, and improve performance measurement—ideas that are now replicated across the globe.
Welfare reform in 1996 ended more than 60 years of guaranteed cash assistance to poor families and turned responsibility for the social safety net over to states. The historic shifts raised many questions: How would states serve the devolved role? How would poor families fare under “work-first” programs? And what would happen to families once they left welfare rolls? Urban’s intensive research project, Assessing the New Federalism, tracked more than 40,000 families across the country, profiled state agencies’ capacities and challenges, and created a database of evolving state welfare rules. These vital statistics filled the vacuum created when the federal government cut back on welfare monitoring and offered a comprehensive history of welfare reform’s effects on families. One finding concerned the central role of food stamps in the new safety net and how many people failed to receive benefits to which they were entitled, leading to new efforts to improve enrollment policies.
The start of the new century witnessed a new round of income tax cuts, and post-9/11 national unity disintegrated as new budget battles ensued. It became clear that decisionmakers, media, and the public needed unbiased information to cut through political rancor on fiscal and tax policy. Scholars from the Urban Institute and the Brookings Institution established a joint Tax Policy Center, distinguished for its respected tools that evaluate and explain distributional and cost effects of competing tax reform proposals with rigorous and transparent analysis. The Tax Policy Center continues to frame the conversation about fiscal policy during election cycles, in policy debates such as the fight over the fiscal cliff, and through ongoing discussion about the future of the tax code.
In the months after Hurricane Katrina devastated New Orleans, shock gave way to deep concern about how to bring this unique city back to social, cultural, and economic health. Many of New Orleans's problems—widespread poverty, a failing public education system, low wages, and a weak tax base—predated the storm. The rebuilding effort afforded a chance to reform already troubled systems. Urban Institute scholars offered evidence-based insights to help the city’s residents rebuild their social and economic infrastructure. In addition to offering strategies for providing urgently needed housing, jobs, health care, and schools, we helped rethink the role the safety net plays in the face of disasters and supported nonprofit and government efforts to tackle long-standing challenges laid bare by the storm.
After at least a decade of escalating housing prices and speculative financing, the subprime mortgage meltdown triggered a crisis that led to the Great Recession. Scholar Ned Gramlich’s warned policymakers about predatory lending in the Urban Institute Press book Subprime Mortgages: America’s Latest Boom and Bust. Several of the book’s recommendations were later adopted by the Federal Reserve Board to tighten mortgage-lending standards. In 2013, the Urban Institute established the Housing Finance Policy Center, led by Wall Street analyst Laurie Goodman. The center aims to bring timely, impartial analyses to decisionmakers grappling with how best to rebuild the housing finance system, to inform legislative proposals, and to show how capital market regulatory policy affects families and communities.
After prior health reform efforts failed, the Obama administration took up the issue again, crafting a complex reform package modeled on the Massachusetts plan. Urban researchers had previously helped inform and evaluate Massachusetts's universal coverage programs, and they were called upon again to help design the implementation of the Affordable Care Act (ACA). Today, Urban researchers continue to evaluate nearly every aspect of the ACA to assess whether it is working as intended and what its effects are on the economy, employers, and people.
As baby boomers reach retirement age and younger generations struggle to find jobs and build wealth, decisionmakers at all levels are grappling with the implications of sweeping demographic changes. Urban Institute researchers look ahead to anticipate the challenges of a changing population. For example, our models have helped assess the impact of dozens of proposed changes to entitlement programs. Today, we answer such questions as, Will older Americans be able to retire? Is wealth inequality permanently widening the gap between generations and between races? How will cities evolve to meet the needs of young families and more diverse populations? By understanding how people and communities are changing, we are making informed recommendations to better serve them.