In 2007, New York City officials launched three related initiatives testing distinct strategies for promoting employment and economic well-being among recipients of housing assistance, particularly those receiving rent subsidies through Housing Choice Vouchers (also known as “Section 8” assistance, after Section 8 of the Housing Act of 1937). Called the Work Rewards demonstration, the collection of interventions tested the effectiveness of New York City’s Family Self-Sufficiency (FSS) program alone, FSS combined with a set of special work incentives (or “reward payments”), and the special incentives by themselves. These interventions targeted voucher holders with household incomes under 130 percent of the federal poverty level.
MDRC designed Work Rewards in collaboration with Mayor’s Office for Economic Opportunity (NYC Opportunity), the city’s two housing authorities (the New York City Department of Housing Preservation and Development and the New York City Housing Authority), and Seedco, a nonprofit workforce and economic-development organization. The demonstration is part of a cluster of three studies collectively known as Opportunity NYC. The two other projects studied were Family Rewards (a comprehensive “conditional cash transfer” program) and Spark, an education-focused incentives program designed to improve the school performance of fourth- and seventh-graders.
Using randomized controlled trials, Work Rewards assessed the effects, or impacts, of an FSS program and special work incentives, separately and in combination, on the employment and the quality of life of nonelderly and nondisabled voucher holders. As the first random assignment evaluation of the federal FSS program in the United States, the New York City study has generated the first evidence about this program’s effectiveness. FSS is the main federal strategy aimed at increasing employment and earnings and reducing reliance on government subsidies among housing voucher holders, and before Work Rewards there was no experimental evidence showing whether or not it actually achieved the self-sufficiency goals it was designed to produce.
Two reports released on the evaluation show that neither FSS model tested (FSS only or FSS + incentives) produced employment or earnings gains for participants overall, or, consequently, consistently reduced their reliance on public benefits. FSS combined with incentives, however, had a large, positive, statistically significant impact on the employment and earnings of participants who were not working when they enrolled in the study. Neither FSS model tested reduced poverty or the incidence of material hardship, even among the subgroup of FSS + incentives participants who did see large gains in employment and earnings. The incentives alone produced no consistent overall effects. The third and final report from this evaluation, slated for mid-2017, will report on the full six years of follow-up and will include a benefit-cost analysis.
In March 2012, the U.S. Department of Housing and Urban Development selected MDRC to conduct a national evaluation of FSS, making it possible to build an evidence base that goes beyond New York City.