Citation
Huston, A., Miller, C., Richburg-Hayes, C., Duncan, G., Eldred, C., Weisner, T., Lowe, T., McLoyd, V., Crosby, D., Ripke, M., & Redcross, C., (2003). New Hope for families and children: Five-year results of a program to reduce poverty and reform welfare. New York: MDRC.
Highlights
- The study’s objective was to examine the impact of the New Hope program on employment, earnings, and public benefit receipt.
- The authors estimated the impact of the New Hope program by comparing average outcomes among a treatment group randomly selected to have access to the program with those of a randomly selected control group that did not have access to the program.
- The study found that receiving access to New Hope services increased average earnings as determined through unemployment insurance data during the first year of the program by $1,088 and the average likelihood of ever being employed during the first year of the program by 8.2 percentage points. The authors also found that the program increased the likelihood of treatment group members reporting being employed in 12 consecutive quarters of the five years after the program began by 6.9 percentage points, on average.
- The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the New Hope program, and not to other factors.
Intervention Examined
The New Hope Program
Features of the Intervention
Participants in the New Hope program who worked at least 30 hours per week received monthly earnings supplements intended to bring their total income to the poverty threshold. Most participants (81 percent) received at least one supplemental payment. Participants also received low-cost health insurance (58 percent) if not provided through their employers. In addition, parents with children younger than 13 received child care subsidies. Participants who were unable to find full-time employment were placed in full- or part-time subsidized community service jobs with local nonprofit organizations, with a requirement for consistent attendance and job performance. Each community service job lasted up to 6 months, and participants could hold community service jobs for up to a total of 12 months.
Features of the Study
The study was conducted in two low-income areas in Milwaukee, Wisconsin. Men and women who lived in one of the targeted neighborhoods, had earnings less than 150 percent of the federal poverty level, were ages 18 or older, and were willing and able to work full-time were eligible to participate in New Hope. The program recruited potential participants for an orientation session during which they learned about the New Hope Project and the random assignment study. Evaluators randomly assigned clients after they completed a baseline survey on their background characteristics. From August 1994 to December 1995, evaluators randomly assigned 1,362 New Hope applicants to New Hope (678) or a control group (679); 5 participants were dropped from the study because they lacked baseline data
Findings
- The study found that receiving access to New Hope services increased average earnings during the first year of the program, according to unemployment insurance data, by $1,088 and the average likelihood of ever being employed, as determined through unemployment insurance data, during the first year of the program by 8.2 percentage points. Both of these results were statistically significant.
- The study also found that the program increased the likelihood of reporting being employed in 12 consecutive quarters by 6.9 percentage points on average. This result was statistically significant.
Considerations for Interpreting the Findings
Employment and earnings outcomes during the first year of the program as measured by unemployment insurance data could include community service jobs offered directly through the New Hope program. These estimates might, therefore, overstate the extent to which the New Hope program helped participants secure work outside of the program.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the New Hope program, and not to other factors.