Publications

Report

Toward Reduced Poverty Across Generations

Early Findings from New York City’s Conditional Cash Transfer Program

03/2010

In 2007, New York City’s Center for Economic Opportunity launched Opportunity NYC–Family Rewards, an experimental, privately funded, conditional cash transfer (CCT) program to help families break the cycle of poverty. CCT programs offer cash assistance to reduce immediate hardship, but condition these transfers on families’ efforts to build up their “human capital,” often by developing the education and skills that may reduce their poverty over the longer term. Family Rewards is the first comprehensive CCT program in a developed country.

Aimed at low-income families in six of New York City’s highest-poverty communities, Family Rewards ties cash rewards to pre-specified activities and outcomes in children’s education, families’ preventive health care, and parents’ employment. The three-year program is being operated by Seedco — a private, nonprofit intermediary organization — in partnership with six community-based organizations. It is being evaluated by MDRC through a randomized control trial involving approximately 4,800 families and 11,000 children, half of whom can receive the cash incentives if they meet the required conditions, and half who have been assigned to a control group that cannot receive the incentives. This report presents initial findings during the program’s early operating period.

Key Findings

Despite initial challenges in understanding the program’s large number of incentives and related payment requirements, nearly all families eventually earned rewards — more than $6,000, on average, over the first two years. In addition, effects from Family Rewards varied across a wide range of outcome measures — for example, the program:

  • Reduced current poverty and hardship, including hunger and some housing and health care hardships
  • Increased savings and the likelihood that parents would have bank accounts, and reduced the use of alternative banking institutions (such as check cashers)
  • Did not improve school outcomes overall for elementary or middle school students, but did increase school attendance, course credits, grade advancement, and standardized test results among better-prepared high school students
  • Somewhat increased families’ continuous use of health insurance coverage, reduced their reliance on hospital emergency rooms for routine care, and increased their receipt of medical care
  • Substantially increased families’ receipt of preventive dental care
  • Increased employment in jobs that are not covered by the unemployment insurance (UI) system but reduced employment in UI-covered jobs

Because only the first 12 to 24 months of the program are covered — including a “start-up” phase during which operational “kinks” were being worked out — it is too soon to draw firm conclusions about the full potential of Family Rewards. Future reports will present longer-term findings, eventually covering all three years of program operations plus two additional years after the cash incentives are no longer offered.