New Hope for the Working Poor
Effects After Eight Years for Families and Children
Conceived of in the late 1980s and implemented in 1994 in two inner-city areas in Milwaukee, Wisconsin, New Hope was an innovative program designed to address problems in the low-wage labor market. Based on the simple premise that people who work full time should not be poor, New Hope provided full-time workers with several benefits: an earnings supplement to raise their income above poverty, low-cost health insurance, and subsidized child care. For those unable to find full-time work, the program offered help in finding a job and referral to a wage-paying community service job when necessary. During the demonstration project, each of these benefits was available for up to three years.
New Hope’s designers expected that its combination of benefits and services would have the direct effects of increasing parents’ employment and income and their use of health insurance and licensed child care. These effects, in turn, might influence the well-being of these adults and their families. MDRC, along with researchers from the University of Texas at Austin, UCLA, Northwestern University, and the University of North Carolina, examined New Hope’s effects in a large-scale random assignment study. This report, the final one in a series, summarizes the program’s implementation and effects over eight years — the first three years while the program operated and five years after it had ended. The findings show that work supports can have a range of positive effects on low-income families and their children. Although the economic effects on employment and income lasted for most families only during the three years in which New Hope operated, some effects on children lasted into the longer term:
- Employment, income, and parents’ well-being. Adults in the New Hope program were more likely to work than their control group counterparts, and the combination of earnings supplements and the Earned Income Tax Credit also resulted in higher incomes. Less consistently, New Hope also had some effects on parents’ well-being. Most of these effects did not last beyond the three years that the program operated — except for a subgroup of individuals facing moderate barriers to work, for whom New Hope increased employment, earnings, and income through Year 8.
- Children’s environments. New Hope affected children’s environments by increasing parents’ use of center-based child care — an effect that persisted through Year 5, or two years after New Hope child care subsidies had ended. By Year 5 and lasting into Year 8, New Hope led children and youth to spend more time in structured, supervised out-of-school activities.
- Children’s development. Positive effects on children’s academic performance and test scores were evident at the two- and five-year marks. By Year 8, effects on performance had faded, and new effects had emerged. New Hope children reported being more engaged in school than control group children, and their parents were less likely than control group parents to report that their children had repeated a grade, received poor grades, or been placed in special education. New Hope also improved children’s positive social behavior, effects that lasted through Year 8. At the eight-year point, New Hope adolescents were less likely than their control group counterparts to have cynical attitudes about work and were more likely to have taken part in employment and career preparation activities.