Tag Archives: poverty

No, poverty is not a mysterious, unknowable, negative-spiral loop

I don’t have much to add on the “consensus plan” on poverty and mobility produced by the Brookings and American Enterprise institutes, referred to in their launch event as being on “different ends of the ideological spectrum” (can you imagine?). In addition to the report, you might consider the comments by Jeff Spross, Brad DeLong, or the three-part series by Matt Bruenig.

My comment is about the increasingly (to me) frustrating description of poverty as something beyond simple comprehension and unreachable by mortal policy. It’s just not. The whole child poverty problem, for example, amounts to $62 billion dollars per year. There are certainly important details to be worked out in how to eliminate it, but the basic idea is pretty clear — you give poor people money. We have plenty of it.

This was obvious yet amazingly not remarked upon in the first 40 minutes of the launch event (which is all I watched). In the opening presentation, by Ron Haskins — for whom I have a well-documented distaste — started with this simple chart of official poverty rates:

offpov-brookingsaei

He started with the blue line, poverty for elderly people, and said:

The blue line is probably the nation’s greatest success against poverty. It’s the elderly. And it basically has declined pretty much all the time. It has no relationship to the economy, and there is good research that shows that its cause at least 90% by Social Security. So, government did it, and so Social Security is the reason we’re able to be successful to reduce poverty among the elderly.

And then everyone proceeded to ignore the obvious implication of that: when you give people money, they aren’t poor anymore. The most unintentionally hilarious illustration of this was in the keynote (why?) address from David Brooks (who has definitely been working on relaxing lately, especially when it comes to preparing keynote puff-pieces). He said this, according to my unofficial transcript:

Poverty is a cloud problem and not a clock problem. This is a Karl Popper distinction. He said some problems are clock problems – you can take them apart into individual pieces and fix them. Some problems are cloud problems. You can’t take a cloud apart. It’s a dynamic system that is always interspersed. And Popper said we have a tendency to try to take cloud problems and turn them into clock problems, because it’s just easier for us to think about. But poverty is a cloud problem. … A problem like poverty is too complicated to be contained by any one political philosophy. … So we have to be humble, because it’s so gloomy and so complicated and so cloud-like.

The good news is that for all the complexity of poverty, and all the way it’s a cloud, it offers a political opportunity, especially in a polarized era, because it’s not an either/or issue. … Poverty is an and/and issue, because it takes a zillion things to address it, and some of those things are going to come from the left, and some are going to come from the right. … And if poverty is this mysterious, unknowable, negative spiral-loop that some people find themselves in, then surely the solution is to throw everything we think works at the problem simultaneously, and try in ways we will never understand, to have a positive virtuous cycle. And so there’s not a lot of tradeoffs, there’s just a lot of throwing stuff in. And social science, which is so prevalent in this report, is so valuable in proving what works, but ultimately it has to bow down to human realities – to psychology, to emotion, to reality, and to just the way an emergent system works.

Poverty is only a “mysterious, unknowable, negative spiral-loop” if you specifically ignore the lack of money that is its proximate cause. Sure, spend your whole life wondering about the mysteries of human variation — but could we agree to do that after taking care of people’s basic needs?

I wonder if poverty among the elderly once seemed like a weird, amorphous, confusing problem. I doubt it. But it probably would if we had assumed that the only way to solve elderly poverty was to get children to give their parents more money. Then we would have to worry about the market position of their children, the timing of their births, the complexity of their motivations and relationships, the vagaries of the market, and the folly of youth. Instead, we gave old people money. And now elderly poverty “has declined pretty much all the time” and “it has no relationship to the economy.”

Imagine that.

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How about we stop moralizing and end child poverty tomorrow?

How much would you pay to stop having to listen to rich people tell poor people how to run their families?

If my calculations are correct, we can end child poverty for $62 billion per year. Is that a lot? No, it’s not. It’s $578 per non-poor family — but (if Twitter analytics are to be believed) my typical reader will pay less because I’ll put it on a sliding scale for you. Details below.

Americans tend to think of poverty as a giant, intractable problem, combining intergenerational dynamics, complex policy tradeoffs, conflicting cultural values, and “personal responsibility” (not to mention genetics). For example, in her book Generation Unbound, Isabel Sawhill says, “If we could return marriage rates to their 1970 level, the child poverty rate would be about 20% lower.” She’s (wisely) not advocating that, because it’s impossible, but think of it — rolling back one of the major demographic trends of the last half century would be social reversal on an unprecedented scale. For a measly 20% reduction in poverty? Apple alone could eliminate 100% of U.S. poverty for two years with the money under its couch cushions. (One reason people think poverty is so hard to solve is they don’t understand the scale of the population and the economy. Because “millions and millions” of poor people sounds like an insurmountable problem, it’s very helpful to play around with real numbers to get a sense of the magnitudes we’re dealing with.)

In our system, the vast majority of poor people are those in hard-to-employ categories. As Matt Bruenig recently wrote, 83% percent of poor people are either children, old people, people with disabilities, students, people taking care of family members, or people who can’t find jobs. (Among the employed poor, most are sharing their income with family members who can’t work.) We are a “country that relies heavily on the market to distribute the national income,” Bruenig writes. But it’s actually the market via the family. If these vulnerable groups are people who need someone else’s labor to support them, at least temporarily, then the attitude written into our policies is that such support should come from their families. If your family can’t do it — or you don’t have a family — good luck. It doesn’t have to be this way.

Isabel Sawhill, incidentally, is behind a column the other day by Catherine Rampell, which makes the reasonable suggestion to increase access to contraception for poor women, for the unreasonable reason that such a policy would “fight poverty” and reduce spending on welfare. The poverty angle here is that poor parents have — wait for it — poor children:

Children brought into the world before their parents were financially or emotionally ready for them are … disadvantaged before they’re even born, no matter how loved they are.

That “financially or emotionally ready” line is from Sawhill, and its implication is clear, though its advocates are for some reason squeamish about saying it plainly: poor people should not have children. I hate this attitude.

Look: children usually (fortunately) don’t make money. Somehow income from someone else’s labor has to pay for their homes, schools, doctors, food and water. A lot of that money comes from the state (for rich and poor kids alike). But under our stingy welfare state, if their parents don’t have decent jobs they wind up poor. The mindset that sees our welfare system as a fixed entity looks at this and says, “These kids are poor because of their parents. They weren’t financially ready to have kids.” Wrong. They’re poor because we insist on it.

I would like to live in a society — in a neighborhood, a community — in which people without good jobs can still have children, while they’re young, and have happy families. And I’m willing to pay my share of the cost of that. Are you? It’s not as much as you think.

Here are the details

All I did was calculate how much below the poverty line all the poor families with children are. That is the amount we need to raise (each year) to end child poverty. Then I distributed that cost across the non-poor families, on a sliding scale. How hard would this program be? We already have all the infrastructure in place to move income around; it’s just a change in the tax code.

With the 2014 Current Population Survey data from IPUMS.org, I can calculate how much each poor family is below their poverty threshold. I’m focusing on families with children for now. There are 6.5 million poor families with a child under 18, and on average they are $9,450 below the poverty line based on their family size and composition. So, to eliminate child poverty we need $61.6 billion dollars per year.*

Where are we going to get that kind of money? From non-poor families.

There are 107 million non-poor families, so we’re going to need about $578 per family per year to pay this bill and end the scourge of child poverty. Of course, $578 is a lot of money for some people, but on average the non-poor families have incomes $40,874 more than their poverty threshold. To ease the pain, I created a simple, continuously-graded scale. I broke the non-poor families into 10 equal-size bins from rich to less rich, and slid the tax rate from 1.8% down to 0% (that way there’s no penalty for moving just over the poverty line). Here’s how it works (click to enlarge):

eliminate child poverty

The tax is only applied on the surplus for each family — that is, the resources they have (after taxes, work expenses, health care and child care) over their poverty threshold. If we tax the surpluses of the richest 10% of non-poor families at the virtually painless rate of just 1.8% — and everyone below them at an even lower rate — we end child poverty in the U.S.

Here’s the chart that shows how much you have to pay, broken down by average income in each decile of non-poor people**:

eliminate child poverty.xlsx

Some people say the Pope should stick to religious matters, and not speak about politics. Some people also say a social scientist should stick to scientific analysis, and not make moral demands. You can ignore my moralizing, as long as you understand the fact that child poverty is a choice we make with our policies. Eliminating child poverty does not require restructuring American families, mass contraception campaigns, or a new ethos of shame. It just costs a little money.


* Technical note: To do the calculations, instead of the official poverty rate I used the Supplemental Poverty Measure. This measures resources versus needs for “resource units,” which are either families (including cohabitors, foster children, and other people that are normally considered “non-relatives”) or unrelated individuals. For every resource unit, the poverty threshold is based on the cost of food, clothing, shelter, and utilities, adjusted for geographic location, housing type, and family composition. In addition to money income, the resources for the calculation include non-cash assistance like food stamps, school lunch, housing and energy subsidies; and then they deduct from resources taxes, work expenses, child care expenses, medical expenses, and child support (it’s all described here). I call resource units “families,” although some of them are single people. The Stata code I used to analyze the data, which includes the variables you need from IPUMS, is here.

** Please consider making a contribution of at least twice this to help address the much larger problem of poverty in the poor countries of the world.

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Grandparents day: Still no need to send a card

I felt guilty this afternoon when I noticed a lot of people clicking on this old post about Grandparents Day. I should have updated it sooner. Better late than never, here is the updated trend of children (ages 0-14) living in the households of their grandparents, by poverty status:

children living with grandparents.xlsx

It looks like that near-poor group may have been given a boost by the recession. But the trend is basically upward for everyone.

My comments from a few years ago are still OK:

Interestingly, as the figure shows, the jump in multigenerational living was greatest for the non-poor (those over 200% of the poverty line). In addition to fallout from job losses, one can imagine this includes families displaced by foreclosure and job loss, grandparents who can’t afford to move into retirement communities because they can’t sell their homes, and other complications of the real estate crash.

The children most likely to live with grandparents, however, are the near-poor — those between 100% and 200% of the poverty line. This might include a lot of would-be poor families in which the grandparents are employed, bringing the total family income over the poverty line.

My older research into multigenerational living produced compelling evidence that these arrangements are usually not a first choice in the U.S. these days — because the more money people have, the less likely they are to share housing. Still, the effect of all this could be more intergenerational solidarity and close relationships. But I wouldn’t assume that.

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Why it’s rotten to tell someone they’re poor because of when they had their kids

The “success sequence” is an idea from Ron Haskins and Isabel Sawhill at the Brookings Institution. They want to balance government investment and “personal responsibility” to reduce poverty. By personal responsibility, they mean adherence to what they call “the three norms”: complete high school, work full time, wait until you’re 21 and married to have children. If you do that — and smile while doing it — they’re willing to spot you a little welfare and some education.

I’ll describe it, and some criticism of the idea, then show a little data analysis.

Haskins and Sawhill claim to have analyzed data to show that when you follow all three of these norms, you have a 98% chance of not being poor. This is how they illustrate it (from this slideshow):

success-sequence-slideMatt Bruenig at Demos has an important post explaining how misleading — and wrong — this is. There are three main problems, briefly:

  1. The high school degree and full-time job is doing almost all of the work. With those two hurdles complete, you’re already down under 4% poverty. So the marriage stuff is mostly moralizing for political purposes.
  2. The data they used does not include the information necessary to see whether people were married when they had their children — it doesn’t have marital history. So they didn’t even do the analysis they said they did.
  3. Family complications mess this up badly. In particular, if a person (say, a man), has children with a partner and never lives with them, he shows up as having met the “norms” because the data don’t show him having any children — it’s a household survey, so absent parents aren’t parents in the data.

So if someone gives you the “success sequence” thing, just remember, the analysis is baloney, and the bottom line is decent full-time jobs are what keep people out of poverty (by the official poverty measure, of course).

Analysis

Anyway, I can go a little further using the American Community Survey, which includes data on the year of each person’s most recent marriage, and the number of times they’ve been married. So, limiting the data to first-time married parents, I can check the age of their oldest child and see whether it was born before they were married, and before the parent was age 21. Some of the above problems still apply, but this is something. And it enables me to underscore Bruenig’s point that step three of the success sequence is not pulling its weight.

(Note this analysis is just about the timing of births for people who are currently married. Single parents of course have higher poverty rates that you can’t attribute to the timing of their births without more information than the ACS has.)

Using the 2013 ACS provided by IPUMS, I took all married parents, living in their own households, age 18 or older, married for the first time, with a child under 18 in the household. Then I used the job norm (self or spouse full-time employed), the education norm (high school complete), and the parent norm in two parts (child born after marriage, child born after age 21), as well as other variables, to see their relative contribution to not being poor. The other variables were additional education (BA degree), race/ethnicity, age, sex, disability, and nativity

This figure shows the marginal effects. That is, how much does the chance of being in poverty change with each of these conditions, holding all the others constant at their means? Click to enlarge:

success sequence acs 2013.xlsx

If the oldest child in the family was born before the year of the parents’ marriage, the chance of being in poverty is increased by 0.4%. If the child was born before the parent was 21, the chance goes up by 0.6%. This seems reasonable to me, given the potential hardships associated with single and early parenthood. But compare: Not having a high school diploma increases the chance of poverty by 2.2%, and neither spouse having a full-time job increases the chance by 6.4%.

Remember, these are all effects holding constant everything else in the model. If you just look at the difference between those who fulfill the parenting “norm” and those who don’t, it’s much bigger. Among people with a full-time job in the family and a high school degree, the poverty rate is 2.8% for people whose oldest present child was born after they were married and 21, versus 9.1% for the people who let us all down on the childbearing norm. But that big difference is mostly because of education and race/ethnicity and disability, etc.

In short, this exposes how rotten it is to tell someone they are poor because of when they had their kids. A decent job and some education would mean a lot more than your sermon.

Code

Here is the IPUMS codebook for my download, and the Stata .do file for the analysis.

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Getting serious about promoting marriage to end poverty

This expands on some practice-what-you-preach criticism of conservative marriage promotion, with some numbers. I’m not endorsing the approach described here — I’m saying marriage promoters should adopt this if they are serious about promoting marriage to reduce poverty.

At Demos, Matt Bruenig wrote:

After rigging the institutions to capture the majority of the national income and basically all of the national wealth, segregating themselves residentially, intermarrying almost solely in their rich enclaves, and even sealing off their schools from being accessed by the unwashed masses, these rich social conservatives turn around and implore others to marry people that they wouldn’t touch with a ten foot pole, people they can’t even bring themselves to make even the most minimal of community with.

In response, Sandy Darity tweeted: “I proposed that a marriage antipoverty strategy should have rich white men marry poor black women.” I don’t want to put the onus for ending poverty just on pro-marriage pundits. Instead — as Darity suggests — we should think in terms of broader policy.

Whose norms?

Marriage promotion is mostly about convincing (educating, coaching) poor people to marry other poor people. That follows from the “culture matters” perspective on marriage decline advocated by some social scientists as an explanation for declining marriage rates. For example, in a New Yorker profile of Orlando Patterson, Kelefa Sanneh writes:

[William Julius] Wilson argued that declining professional prospects made some black men less marriageable. Patterson thinks that declining marriage rates had more to do with the increased availability of contraception and abortion, which eroded cultural norms that had once compelled men to marry the women they impregnated.

Whether the proximate cause is men’s reduced economic prospects or changing norms, the fact is that if poor people changed their attitudes (norms, culture) about marriage — if they put more priority on the importance of marriage and worried less about the economic qualities of the match — there would be more marriage and, they say they believe, less poverty, inequality, violence, and abuse).

An obvious problem with this whole enterprise is that the marriage boosters assume the next marriage they generate through marriage promotion will be as economically beneficial to the participants as the average existing marriage observed in the population. But if one of the reasons for non-marriage is poor economic status, then it follows that the next marriage generated will on average be much less beneficial economically than the average marriage (I expanded on this here). So the plan to reduce poverty by promoting marriage among the poor is running uphill. Or, it would be running uphill if it was running at all, but of course (ridiculous research shenanigans notwithstanding) their billion dollars spent has yet to generate a marriage, so this is really all very generous speculation.

If they really wanted to change “the culture”

For several decades, marriage promoters have been complaining that “the culture” isn’t pro-marriage enough. The latest version of this, from David Blankenhorn and colleagues, seeks to “restore a marriage culture among the less privileged.” But, although it’s true that poor people (especially poor Black people) have seen a faster drop in marriage rates, that’s not where the biggest anti-poverty gains are to be had. If you really want marriage to reduce poverty, and you really think policy can change “the culture” to make more marriages, then what you really need is (as Darity said) some rich (mostly) White men to marry some poor (disproportionately) Black women.

Why not? Is it really more far-fetched to imagine you could change rich White men’s attitudes toward poor Black women than it is to suppose you could “restore a marriage culture” among the poor? Why? Maybe one reason policies to increase marriage among the poor haven’t work is because the economic benefits aren’t great enough. If you were the kind of person that goes in for this sort of policy (which, again I am not), you’d have to assume poor people would be more receptive to the idea of marrying rich people — that’s one important premise of Wilson and Patterson’s perspective. So the problem is rich people don’t want to marry them.

How difficult can this be? Just to put some numbers to the idea, I did the following simple exercise. Take all the poor single mothers — specifically, non-married women living in their own households with their own children, with family incomes that put them below the federal poverty line — and match them up with rich single men.

How many rich single men do you need? With this definition, I get 3.5 million poor single mothers. I started with the richest single man, and went down the income ladder till I had enough to solve the single-mother poverty problem. It turns out you only have to go down to $80,000 per year in income. Here’s the matching, with the race/ethnicity of the two groups shown:

rich men marry poor women.xlsxIf the problem is that poor women are too economically choosy to marry the poor men in their lives, then we could easily lift these 3.5 million single mothers — and the 7.1 million children in their families — out of poverty simply by changing the anti-marriage views of these selfish, rich, single men. Of course, we’d have to reduce racist attitudes also, but not entirely — only a third of the non-Black rich single men would need to open their minds to the possibility of marrying a Black woman. You would have to be creative with the incentives for these men, including consciousness-raising and parenting classes, as well as, for example, Starbucks gift cards and subscriptions to the Economist.

Now, no one thinks you can socially engineer — through shame or tax incentives — the marital behavior of entire populations, so this strategy couldn’t be expected to completely eliminate the problem of single mothers and their children living in poverty. But it couldn’t be less effective than the marriage promoters have achieved with the last billion dollars they spent.

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50 years after the Moynihan report: Hell in a hand basket?

Update, March 14, 2015: In response to a column by Nicholas Kristof, Heidi Hartmann and I published this letter in the New York Times, based on our report.

I had the great pleasure of working with Heidi Hartmann, Jeffrey Hayes, and Chandra Childers — from the Institute for Women’s Policy Research (IWPR) — on a briefing paper marking the 50th anniversary of the Moynihan Report. The report is published jointly by the Council on Contemporary Families and IWPR, as part of a symposium called Moynihan+50. Our report is here, the full symposium (PDF) is here.

(This isn’t the first time the Moynihan Report has been revisited, of course. Here’s the transcript of a 1992 hearing that featured Senator Moynihan — and a brilliant statement by Stephanie Coontz — before Pat Schroeder.)

Here is our executive summary:

Moynihan’s Half Century: Have We Gone to Hell in a Hand Basket?

In The Negro Family: The Case for National Action, published in 1965, Daniel Patrick Moynihan famously argued that the fundamental obstacle to racial equality was the instability of Black families, and especially the prevalence of single-mother families. That same year, he predicted that the spread of single-parent families would result not only in rising poverty and inequality but also in soaring rates of crime and violence. Half a century later, we report that the changes in family structure that concerned him have continued, becoming widespread among Whites as well, but that they do not explain recent trends in poverty and inequality. In fact, a number of the social ills Moynihan assumed would accompany these changes have actually decreased.

  • Even as single-parent families have become more prevalent in all race/ethnic groups, especially among Black families, poverty rates have fallen, partly because of effective welfare programs, and partly because of increased education and job opportunities (especially for women). In 1967 more than 60 percent of single-mother families were poor. Today, according to new, adjusted poverty calculations, that poverty rate has been almost halved, falling to 35 percent.
  • During the period of greatest change in family structure, educational levels rose for Black children and young adults. Today, almost 90 percent of Black young adults are high school graduates, compared with only about 50 percent in the 1960s; Black college completion rates have doubled, from less than 10 to almost 20 percent.
  • Since 1994 juvenile crime rates have plummeted by more than 60 percent for Blacks and Whites alike, even though marriage rates have continued to fall and the proportion of children born out of wedlock has reached 40 percent.
  • Although it is true that single-parent families are more likely to be poor than two-parent ones, we show that fluctuations in poverty rates since the 1990s cannot be explained by changes in family structure.
  • Marriage is no protection against racial inequality. Black and Latino children in married-couple families are, respectively, three- and four-times more likely to be poor than White children in such families.

One of the legacies of the Moynihan Report has been to focus attention on changing family structure, rather than on other factors that are more amenable to policy intervention. While marriage promotion programs have proven ineffective, evidence suggests that increasing employment opportunities and wage levels, anti-discrimination policies, and social safety nets have considerable potential to reduce poverty, increase economic and educational opportunity, and decrease racial inequality.

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A few ways Isabel Sawhill is wrong on single mothers

Photo from Flickr Creative Commons by Mikey G. Ottawa

Photo from Flickr Creative Commons by Mikey G. Ottawa

Writing for the 50th anniversary of the Moynihan Report – which I will comment more on soon – Isabel Sawhill offers a summary of Moynihan’s prescience. Here’s an excerpt:

…the trends [Moynihan] identified have not gone away. Indeed, they have “trickled up” to encompass not just a much larger fraction of the African American community but a large swath of the white community as well. Still, the racial gaps remain large. The proportion of black children born outside marriage was 72 percent in 2012, while the white proportion was 36 percent.

The effects on children of the increase in single parents is no longer much debated. They do less well in school, are less likely to graduate, and are more likely to be involved in crime, teen pregnancy, and other behaviors that make it harder to succeed in life. Not every child raised by a single parent will suffer from the experience, but, on average, a lone parent has fewer resources—both time and money—with which to raise a child. Poverty rates for single-parent families are five times those for married-parent families. The growth of such families since 1970 has increased the overall child poverty rate by about 5 percentage points (from 20 to 25 percent).

Rates of social mobility are also lower for these families. Harvard researcher Raj Chetty and his colleagues find that the incidence of single parenthood in a community is one of the most powerful predictors of geographic differences in social mobility in the United States. And our research at the Brookings Institution also shows that social mobility is much higher for the children of continuously married parents than for those who grow up with discontinuously married or never-married.

At least three things wrong here:

1. This is a very common logical sequence followed by those who say that the decline of marriage (or rise of single parenthood) is the major social welfare problem we face today. They point to the rise of single parenthood. Then they say that children of single parents are doing worse on a variety of indicators. What they don’t say is that while single parenthood has, in fact, skyrocketed, most of the problems they’re concerned with have gotten better, not worse. While single motherhood has been rising, education is up, poverty is down, life expectancy is up, and (since the 1990s) crime is way, way down – for Blacks as well as Whites. The proportion of Black children living with single mothers has almost doubled since the 1960s, but the Black poverty rate is less than it was in 1974.

2. It is one thing to observe that children of single parents do worse in some ways than children of married parents. But Sawhill knows, and should tell you, that studies seeking to identify the direction of causality in that relationship are plagued by unresolved problems of selection bias. We know for sure the effects of single parenthood on children are dwarfed by other social trends.

3. That use of Chetty is completely wrong, a meme started by Brad Wilcox and fueled by credulous reporters. Notice the pivot in Sawhill’s text. First it’s, “Rates of social mobility are also lower for these families.” Then, “Harvard researcher Raj Chetty and his colleagues find that the incidence of single parenthood in a community…” As if the second (the one that mentions Harvard) is related to the first. It’s not. The Chetty paper did not study single-parent families. What they did was look at rates of single parenthood in communities, and use them to predict social mobility. But – and Sawhill would know this matters if she had read the beginning of her own piece, which mentioned the big racial disparity in single parenthood – the paper did not control for race! Please, before spreading this claim, or retweeting (without necessarily endorsing) the supposed experts who do, read this. Because you know what really affects social mobility in the U.S.? Race.

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