Friday, April 02, 2010

An experiment that probably has not changed lives

A few years ago, New York City began a conditional cash transfer program for residents at or below the poverty line. "Conditional" because it only gave money to reward good behavior like seeing the doctor or getting good grades in school. The program was modeled after very successful programs in Brazil and Mexico. However, a new study conducted by the same group that designed New York's program says that it hasn't been life changing.

From this Associated Press story that we found at Google News, writer Sara Kugler tells us more about the study.

The first analysis of New York's effort was released Tuesday by a nonprofit social policy research group called MDRC that also helped design the program. Researchers are also tracking a control group of another 2,400 families that do not receive payments.

New York City's program began in 2007 and has bestowed total of $14 million on 2,400 participating families. The average award per family was $3,000.

The payments, also known as conditional cash transfers, were modeled after successful similar programs in other countries, including Mexico and Brazil. The theory is that the cash rewards reduce immediate hardship for poor people while reinforcing small but significant actions they can take to improve their long-term stability.

Before the city took up the idea, it had never been attempted in the United States.

Participants were offered 22 different incentives to earn money, ranging in value from $20 to $600. Ninety-eight percent of all families earned at least one reward, but just 65 percent achieved payments in every period they were available.

When compared with the control group, 10 percent more families in the reward group had two dental visits per year, 1 percent more had health insurance, 20 percent more had bank accounts and 3 percent fewer used costly services like check cashing.

But fewer people in the reward group held jobs in the first year, and cash rewards had no effect on school performance or attendance for young children.

The rewards also had no effect on test scores or attendance for low-performing high school students, and made only modest differences for higher-achieving students.

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