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Toward reduced poverty across generations: Early findings from New York City’s conditional cash transfer program (Riccio et al. 2010)

Citation

Riccio, J., Dechausay, N., Greenberg, D., Miller, C., Rucks, Z., and Verma, N. (2010). Toward reduced poverty across generations: Early findings from New York City’s conditional cash transfer program. New York: MDRC.

Highlights

  • The study’s objective was to examine the impact of Family Rewards, an experimental privately funded conditional cash transfer program in New York City, on earnings, employment, public benefits receipt, and education.
  • The study was based on a randomized controlled trial and estimated the effect of the Family Rewards program on low-income families. The authors used New York City and New York State administrative data to compare average outcomes among those offered access to the program against the average outcomes of those excluded, after adjusting for chance initial differences between the groups.
  • The study found that, on average, the Family Rewards program decreased the likelihood of ever being employed at a job covered by unemployment insurance (UI) in the first year. However, the Family Rewards program increased the likelihood of being employed at a job not covered by UI after 18 months, total monthly income after 18 months, and the likelihood that adult recipients had received an associate’s degree after 18 months.
  • 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 Family Rewards program, and not to other factors.

Intervention Examined

The Family Rewards Program

Features of the Intervention

Family Rewards was a conditional cash transfer program that tied cash rewards to pre-specified activities and outcomes in children’s education, families’ preventive health care, and parents’ employment. The program was created by private foundations and community-based organizations in New York City to test this type of program’s effect in a developed-country context. Cash assistance was offered to reduce immediate hardship and to build human capital to reduce poverty over the long-term. Participants could receive cash incentives if they met required conditions, including education-focused conditions such as school attendance, achievement levels on standardized tests, and engagement with student’s education; health-focused conditions such as maintaining health insurance coverage for parents and their children; and workforce-focused conditions aimed at parents, such as maintaining full-time work and participating in approved education and job-training activities. The program was scheduled to last three years.

Features of the Study

From July 2007 to January 2008, a total of 4,790 families living in selected New York City community districts with incomes at or below 130 percent of the federal poverty level; with at least one child in the 4th, 7th, or 9th grades; and composed only of legal residents of the United States were randomly assigned to a treatment group that could participate in the Family Rewards program or to a control group that was not offered the incentives. The authors compared outcomes among these two groups after adjusting for chance differences in their makeup.

Findings

  • The study found that, on average, the Family Rewards program decreased the likelihood of ever being employed at a UI-covered job in the first year by 2.3 percentage points. This finding was statistically significant at the 5 percent level.
  • The Family Rewards program increased the likelihood of being employed at a job not covered by UI after 18 months by 5.6 percentage points and increased monthly income after 18 months by $366, impacts that were statistically significant at the 1 percent level.
  • The authors found that the Family Rewards program increased the likelihood that an adult recipient had received an associate’s degree after 18 months by 2.5 percentage points, and this was statistically significant at the 5 percent level.

Considerations for Interpreting the Findings

The authors estimated multiple related impacts on outcomes related to employment, income, public benefits receipt, and education. Performing multiple statistical tests on related outcomes makes it more likely that some impacts will be found statistically significant purely by chance and not because they reflect program effectiveness. The authors did not perform statistical adjustments to account for the multiple tests, so the number of statistically significant findings in these domains is likely to be overstated.

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 Family Rewards program, and not to other factors.

Reviewed by CLEAR

August 2016

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