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Policy Framework
In March 2007, New York City Mayor Michael R. Bloomberg announced his intention to test a set of antipoverty initiatives, called Opportunity NYC, which would use temporary cash payments to poor families to boost their income in the short term, while building their capacity to avoid longer-term and second-generation poverty. Such payments are known internationally as “conditional cash transfers” because the payments are contingent upon family members making certain efforts to build their human capital.
In the U.S., prominent examples of this type of policy include the federal Earned Income Tax Credit (EITC) and Temporary Assistance for Needy Families (TANF), both of which condition cash transfers on work effort. Opportunity NYC went further than these programs by offering payments for a broader set of activities.
Opportunity NYC includes three separate demonstration projects, each of which took a somewhat different approach. Family Rewards was a comprehensive, two-generation strategy that focused on children’s education, family preventative health care, and parents’ workforce efforts. Work Rewards targeted the workforce efforts of low-income adults living in subsidized housing. A third project called the Spark program focused solely on children and their school performance. All three projects have been supported by a consortium of private funders.
In collaboration with the Mayor’s Office, a host of City agencies, and Seedco (a private, not-for-profit workforce and economic development organization), MDRC helped design Family Rewards and Work Rewards and is leading random assignment evaluations of the effectiveness of these programs. The operational phase of Family Rewards and the incentives component of Work Rewards have concluded as planned, and the long-term evaluations are still underway.
The Spark program was designed and evaluated by a team headed by Roland Fryer of Harvard University, in collaboration with the New York City Department of Education. That program and its evaluation have been completed.
Opportunity NYC was an initiative of Mayor Bloomberg’s Center for Economic Opportunity (CEO), established to implement promising antipoverty programs in New York City. CEO manages more than 40 initiatives, including innovative pilot programs and expansions to existing programs. CEO oversees evaluations of the initiatives to determine success in reducing poverty and increasing self-sufficiency among New Yorkers.
The following sections describe the evaluations of Family Rewards and Work Rewards.
Agenda, Scope, and Goals
Family Rewards Pilot
The Family Rewards program operated from 2007 to 2010. It was inspired by the model of successful conditional cash transfer (CCT) programs in a number of developing countries, including Mexico’s Progresa/Oportunidades program. It was a two-generation initiative to reduce poverty that included both short-term and long-term poverty reduction goals. It operated in six districts in the Bronx, Brooklyn, and Manhattan, which were among the City’s most persistently poor communities. The relative disadvantage of these areas can be seen clearly in Census data: In 2000, about 40 percent of the households had incomes below the poverty level, compared with a citywide rate of 21 percent. The unemployment rate across the districts was 19 percent, on average, compared with 5 percent for the City as a whole. Considerably higher proportions of residents of these communities, compared with the City’s population as a whole, relied on public benefits, including TANF, food stamps, and Medicaid.
Family Rewards used the offer of a new set of cash transfers to achieve three interrelated objectives: (1) to lessen immediate income-related hardships for poor families, (2) to help and encourage poor families to increase — or sustain — positive efforts to improve their own futures, and (3) to help poor families as they made investments in their children’s futures. Thus, the payments to families were to function as a short-term income supplement to reduce the immediate hardships of poverty, but one that built on the concept of mutual obligations embedded in the nation’s major income support programs for low-income families (including EITC, TANF, and food stamps), by linking the payments to steps that can improve a family’s economic security and reduce intergenerational poverty. The monetary payments were awarded only when households met specific conditions in three key areas: children’s education, family preventive health care practices, and parents’ workforce efforts. For example:
- Education-based conditions included children’s superior school attendance, improved performance on standardized tests (or sustained high achievement), and parental engagement in children’s education.
- Health-based conditions included maintaining adequate health coverage for all children and adults in participant households, as well as age-appropriate preventive medical and dental visits for each family member.
- Workforce-related conditions included sustaining full-time work and participating in approved education or job training while working either part time or full time.
Work Rewards Pilot
The Work Rewards initiative targeted recipients of Section 8 Housing Choice Vouchers administered by New York City’s two housing authorities: the Department of Housing Preservation and Development and the New York City Housing Authority. It was designed to test the effects of alternative strategies to improve adults’ labor market outcomes and family well-being. Some participants were enrolled in a New York version of the federal Family Self-Sufficiency (FSS) program — a case management and asset-building program funded by the U.S. Department of Housing and Urban Development (HUD) that was designed to promote economic advancement for low-income families receiving housing subsidies. Other participants were also enrolled in this FSS program but, in addition, were offered the same workforce-related incentives used in the Family Rewards pilot (without the children’s education and family health care components). And still others were offered just the workforce incentives alone.
Design, Sites, and Data Sources
Family Rewards Pilot
The Family Rewards pilot served 2,400 families, and an equal number of families were assigned to the control group. Eligible families lived in the selected community districts with incomes at or below 130 percent of the federal poverty level and had at least one child in public school in either the fourth, seventh, or ninth grade. These grades were chosen because they reflect critical transition points in students’ school careers. Students who fail to navigate them successfully fall behind their peers and have difficulty recovering, increasing their risk of dropping out, especially in the early high school years.
Seedco assembled a network of six Neighborhood Partner Organizations in the designated community districts to recruit and enroll eligible families. Although the program had no formal case management component, participating families had several avenues — a telephone hotline, a Web site, and an in-person help desk at the community-based organizations — to get information on services that could help them meet the program conditions (for example, information on where to get homework help for their children, how to find a doctor, and where to get help finding jobs and training). In addition, families could also get help opening bank accounts, so that the payments could be transferred electronically and accessed via debit cards.
The evaluation of ONYC: Family Rewards has three major strands of research: an impact analysis, an implementation and process analysis, and a benefit-cost analysis:
- Impact analysis. This analysis is examining the program’s effects on a wide range of outcomes, including children’s school performance; family health care practices and health outcomes; parents’ employment and training outcomes; and family income, benefit receipt, poverty, material hardship, and quality of life.
- Implementation and process analysis. This analysis is exploring the operations of Family Rewards, focusing particularly on the roles and experiences of the implementing institutions (particularly, Seedco and the community partners) and on the perceptions and experiences of the participating families.
- Benefit-cost analysis. This analysis will estimate the cost of operating Family Rewards, distinguishing how much was spent on various aspects of program delivery versus the amount of cash transferred to the participating families. It will also make a number of benefit-cost comparisons, examining the economic “gains” and “losses” from several perspectives, such as from the perspective of participants and their families and from the perspective of taxpayers and government budgets.
The first interim report on the program was published in March 2010. It presented initial findings from the implementation and impact studies covering the first two years of program operations. It showed that participating families received about $3,000 in rewards per year, with almost all families earning some rewards. The amount of money a family received varied according to the number of activities the family completed and compositional factors, such as family size and number of high school students in the family. The impact evaluation found a wide range of effects across a number of domains and outcome measures. There were strong effects in the areas of poverty reduction, school achievement for a subset of ninth-graders (who were somewhat more prepared for high school when they entered the study), and receipt of dental care. Other early effects in the areas of health and employment were modest or mixed, and the program has so far has not had an effect on school achievement for elementary and middle school students. The study team released a separate report in May 2011 that used in-depth qualitative interviews to explore families’ experiences with the program, including how families communicated about the educational incentives, and the influence of those incentives on parent-child interactions.
Work Rewards Pilot
A total of 3,987 Section 8 recipients were recruited for the Work Rewards study. Eligibility for the Work Rewards pilot was limited to voucher holders whose household income was no greater than 130 percent of the federal poverty line. However, eligibility was not limited to particular community districts but extended to voucher holders from across New York City. In addition, families with or without children under age 19 were invited to apply.
The program and evaluation design differed depending on the source of the participant’s Section 8 voucher. For holders of a New York City Housing Authority Section 8 voucher, the study will determine whether the offer of incentives for sustained full-time employment and for taking up approved education or training programs improves labor market and other outcomes. Applicants were randomly assigned to a program group that received the incentives offer and control group that did not receive the offer.
Holders of Section 8 vouchers through the City’s Department of Housing Preservation and Development were randomly assigned across three groups rather than two. One group was offered enrollment in an enhanced version of the Department’s Family Self-Sufficiency (FSS) program operated by a number of community-based organizations located throughout the city, with some additional services. A second group was offered enrollment in FSS and received the additional workforce incentives. The third group was a control group which was offered neither of these options.
The analysis comparing the FSS group versus the control group constitutes the first-ever random assignment test of the Family Self-Sufficiency program, the main federal program intended to increase employment and earnings and reduce reliance on government subsidies among Section 8 voucher holders. Comparing the first and second groups in this trial — those offered the FSS program versus those offered FSS plus the workforce incentives— will show whether the incentives “add value” to whatever effects FSS (including its escrow-based asset-building strategies) produces on its own.
What's Next
Future reports will present longer-term results from the Family Rewards and Work Rewards studies, eventually up to five years after random assignment.
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