Archive for Wednesday, March 31, 2010

NYC pays poor for good conduct, with mixed results

March 31, 2010


— An experimental anti-poverty program that pays the poor for maintaining good habits — $25 to $150 for things such as going to the dentist, staying on the job or opening a bank account — has not exactly been life-changing.

The cash incentives funded with private donations have helped some New Yorkers make better choices. But the program has not encouraged young people to do better in school or adults to keep a job. And Mayor Michael Bloomberg said the incentives are not the answer to eradicating poverty.

The program “doesn’t work in every case,” Bloomberg said. “You always hope that you’ve come across a magic silver bullet and you never do. You make progress incrementally, particularly when you’re trying to focus on some of society’s biggest problems.”

The first analysis of New York’s effort was released Tuesday by a nonprofit social policy research group called MDRC that also helped design the program. Researchers are also tracking a control group of another 2,400 families that do not receive payments.

New York City’s program began in 2007 and has bestowed total of $14 million on 2,400 participating families. The average award per family was $3,000.

The payments, also known as conditional cash transfers, were modeled after successful similar programs in other countries, including Mexico and Brazil. The theory is that the cash rewards reduce immediate hardship for poor people while reinforcing small but significant actions they can take to improve their long-term stability.

Before the city took up the idea, it had never been attempted in the United States.

Participants were offered 22 different incentives to earn money, ranging in value from $20 to $600. Ninety-eight percent of all families earned at least one reward, but just 65 percent achieved payments in every period they were available.

When compared with the control group, 10 percent more families in the reward group had two dental visits per year, 1 percent more had health insurance, 20 percent more had bank accounts and 3 percent fewer used costly services like check cashing.

But fewer people in the reward group held jobs in the first year, and cash rewards had no effect on school performance or attendance for young children.

The rewards also had no effect on test scores or attendance for low-performing high school students, and made only modest differences for higher-achieving students.


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