In September 2017, MDRC released interim findings from the Paycheck Plus demonstration and evaluation of an enhanced Earned Income Tax Credit for low-wage workers without dependent children in New York City. Here are a few answers to questions we’ve received about the results.
To improve outcomes among high-interest borrowers, policymakers need to understand what is driving usage. This second post in MDRC’s Reflections on Methodology series discusses how a data discovery process revealed clusters of borrowers who differed greatly in the kinds of loans and lenders they used and in their loan outcomes.
The SIMPLER framework was developed for the Behavioral Interventions to Advance Self-Sufficiency (BIAS) project ― the first major effort to apply behavioral insights to human services programs in the United States. SIMPLER summarizes several key behavioral concepts that can guide practitioners interested in using behavioral insights to enhance service delivery.
Interim Findings from the Paycheck Plus Demonstration in New York City
Paycheck Plus offers workers without dependent children an enhanced Earned Income Tax Credit (EITC) worth up to $2,000 per year for three years (four times the current EITC for singles). Results after two years from a random assignment evaluation show that it has increased income and work rates.
Boosting the Earned Income Tax Credit for Workers Without Dependent Children
The Earned Income Tax Credit (EITC) promotes work and raises over six million Americans out of poverty each year. Early results from an ongoing demonstration suggest that expanding the EITC for singles, an idea with bipartisan support, is feasible and can increase employment and income while reducing poverty.
Findings from Family Rewards 2.0
A program in Memphis and the Bronx offered cash incentives, coupled with family guidance, to poor families for meeting certain health care, education, and work milestones. The program increased income and reduced poverty, increased dental visits and health status, reduced employment somewhat, and had few effects on students’ education.
A Conditional Cash Transfer Program in Two American Cities
This program spent a little over a dollar to transfer one dollar in cash rewards to families who met the required benchmarks. These rewards produced positive effects on some outcomes, but left others unchanged. While the program benefited participating families, the cost to taxpayers exceeded the economic value of these effects.
Who Uses Them and Why?
Funded by MetLife Foundation, this paper uses a large and unusual data set, combining administrative data provided by subprime lenders with survey and in-depth interview data, to gain a better understanding of the backgrounds, experiences, and needs of people who use online subprime small-dollar credit.
What Worked, What Didn’t
Family Rewards offered cash incentives to low-income families to reduce both current and longer-term poverty, contingent on families’ efforts to build up their “human capital” through children’s education, preventive health care, and parents’ employment. While the program produced some positive effects on some outcomes, it left many outcomes unchanged.
Final Impact Findings from the SaveUSA Evaluation
SaveUSA encourages low- and moderate-income people to set aside money from their tax refund for savings by awarding a 50 percent match to successful savers. After 42 months, the program had sustained its earlier effects, increasing both the percentage of individuals with nonretirement savings and the average amount of savings.