Family Rewards: A Conditional Cash Transfer (CCT) Pilot Program in NYC

Transcription

1 Family Rewards: A Conditional Cash Transfer (CCT) Pilot Program in NYC Fighting Poverty with Cash Incentives: Can It Work? June

2 Program Design 2

3 International CCT programs Goals of CCT programs: 1. Reduce current poverty by transferring cash 2. Reduce longer-term and 2 nd generation poverty by tying transfers to human capital development Pioneered by Mexico and now operating in about 30 lower and middle-income countries Some evidence of effectiveness in improving children s health and school enrollment/attendance 3

4 Family Rewards Testing an adaptation of the CCT concept in NYC First comprehensive CCT in a developed country Layered on top of existing safety net Privately funded 3-year intervention September 2007 to August year evaluation Random assignment design Implementation, impact, and benefit-cost analyses Results so far cover first 1-2 years (including start-up ) 4

5 Family Rewards partners NYC Center for Economic Opportunity (CEO) Sponsoring Family Rewards demonstration; led design team Leading Mayor Bloomberg s anti-poverty agenda MDRC Helped design intervention; conducting the evaluation Seedco Helped design intervention Manages overall delivery of the program 6 NPOs (Neighborhood Partner Organizations) Community organizations; serve as face of the program in the targeted communities 5

6 Selecting families Eligibility criteria Live within 6 high-poverty community districts Incomes 130% of Federal Poverty Level (e.g., $22,321 for a family of 3 in 2007) Child in grade 4 or 7 or 9, but whole family eligible Recruited by the neighborhood organizations (NPOs) From school lists (free school lunch program) Participants 2,400 families and 5,750 children in program Similar numbers in control group 6

7 The offer: Rewards in 3 domains 1. Children s education High attendance (95%) Performance on standardized tests Parents discuss test results with school High school credits and graduation Parent-teacher conferences; PSATs; library cards 2. Family preventive health care Maintaining health insurance Preventive medical and dental check-ups 3. Parents work and training Sustained full-time work Completion of education/training while employed 7

8 Payment structure Range of payment amounts For example: $25/month for elementary school attendance $200 for annual check-up $350 for proficiency on middle school annual exams $600 for passing certain high school standardized subject-area tests (Regents exams) Most payments go to parents Some education payments go directly to high school students Payments made every 2 months electronically, into bank accounts 8

9 Increased earnings $ CCT $ Theoretical Framework Immediate poverty reduction (via cash transfers + increased earnings) Reduction in 2 nd generation poverty CCT $ CCT $ Child education incentives Improved child education outcomes Preventive health care incentives Workforce incentives Improved parental earnings Sustained poverty reduction (current generation)

10 Program Delivery 10

11 Seedco s role: Overall implementation Centralized marketing Claims verification and processing Initiates payments Helpline to address payment issues Guidance / oversight for NPOs 11

12 Role of the 6 neighborhood organizations (NPOs) Contact point for the program in community Recruited/enrolled sample Orientation workshops Topical workshops related to incentives Social events Information on services available in community NO DIRECT SERVICES OR CASE MANAGEMENT 12

13 Payment & verification 2-month cycle: Verification by Seedco Administrative data Coupons and documentation submitted by families Month 1 Month 2 Month 3 Families engage in activities $$$.... Deposited to: Own bank account* Opportunity NYC Safe Acct.* Stored-value card * $50 extra incentive for using bank account 13

14 Families Understanding and Perceptions of the Program Using data from in-depth interviews with families and from a special module in 18-month parent survey 14

15 Parents views of the program See purpose as: way to help kids do better in school and stay healthy rewarding low-income parents for being good parents Embrace it because it provides resources and support to help them more consistently do the things they already believe in doing Some see it as offering them extra leverage with reluctant children 15

16 Families understanding of incentives Parents understood general offer, but confused about specifics Younger kids understanding varied with what parents told them about the program: No information Some information/parent adds own incentives Total transparency about program incentives HS kids target of direct marketing on school incentives, so knew more, but still had learning curve Continuous marketing to parents and HS kids is essential 16

17 Rewards paid in first 2 years Virtually all families earned some rewards 65% received rewards in every activity period Over $3,000/year per family ($6,000 over 2 years) Most for education and health Workforce 18% Health 38% Education 44% Almost 88% earned rewards requiring coupon submission 17

18 Program Impacts Using data from administrative records and an 18-month survey of parents 18

19 Interpreting the graphs Blue bar = Outcomes (i.e., behaviors/achievements) of FAMILY REWARDS group Green bar = Outcomes of CONTROL GROUP Shows what Family Rewards participants would have achieved without program DIFFERENCE = the program effect (or impact ) * = statistical significance Remember: EARLY findings only! FAMILY REWARDS Impact CONTROL GROUP 19

20 Percent Effects on poverty (18-month follow-up) % decrease pct. pts.*** Had income at or below poverty level Program 44% decrease pct. pts.*** 16.7 Control 30.0 Less than 50 percent of poverty level Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 20

21 Percent Effects on family economic hardships (18-month follow-up) Program 19% decrease -7.8 pct. pts.*** 33% decrease -7.3 pct. pts*** Food insufficiency Control 34.1 Cannot make ends meet 41% increase pct. pts.*** Financial situation better than last year 38% decrease -3.9 pct. pts.*** Did not get medical care because of cost Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 21

22 Percent Effects on banking and savings (18-month follow-up) % increase pct. pts.*** % decrease -7.3 pct. pts.*** 58% increase pct. pts.*** 16.3 Has a bank account Uses a check casher Had any savings Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 22

23 Percent Education effects for 4 th -grade cohort Impacts in Year % attendance Proficient on math test Proficient on ELA test Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 23

24 Percent Educational effects for 7 th -grade cohort Impacts in Year % attendance Proficient on math test Proficient on ELA test Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 24

25 Percent Effects on younger children s activities (18-month follow-up) Participation in program to help with school work/homework 12% increase 14% increase pct pts* pct pts* th-graders th-graders Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 25

26 Analyzing the 9 th Grade Sample Little effect on schooling overall, but Subgroup analysis reveals differential response to the program Split entering 9 th grade sample into 2 subgroups according to performance on 8 th -grade standardized test (before starting Family Rewards): Proficient subgroup (more prepared for HS) Not proficient subgroup (less prepared for HS) 26

27 Percent Education effects for 9 th grade subgroups Subgroup: PROFICIENT on 8 th grade tests % increase pct. pts.*** % attendance (Y2) 66% decrease -5.8 pct. pts.*** Repeated 9th grade (Y2) 13% increase 8% increase +8.1 pct. pts.** +5.9 pct. pts.* Earned 22 credits (Y1 & Y2) Passed 2 regents (Y1 & Y2) Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. Program Control 27

28 Percent Education effects for 9 th grade subgroups Subgroup: NOT PROFICIENT on 8 th grade tests % Attendance (Y2) 21.8 Repeated 9th Grade (Y2) -2.0 pct. pts pct. pts pct. pts pct. pts Earned 22 Credits (Y1 & Y2) Passed 2 Regents (Y1 & Y2) Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 28

29 Percent Effects on Health Coverage (Parents) (18-month follow-up) % increase +1.9 pct. pts.** Had any insurance in prior month 17% decrease -3.3 pct. pts.** Had a period of no insurance since RA Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 29

30 Percent Effects on PARENTS use of Health Services (18-month follow-up) 4% increase +3.5 pct. pts.*** +1.5 pct. pts. 16% increase +9.5 pct. pts.*** 38% decrease -2.0 pct. pts.*** Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 30

31 Percent Effects on HS STUDENTS use of Health Services (18-month follow-up) -1.8 pct. pts pct. pts. 23% increase pct. pts.*** 38% decrease -6.1 pct. pts.*** in past year Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 31

32 Effects on Health Outcomes (18-month follow-up) Parents High school students 6% increase 2.8 pct. pts.* 17% increase pct. pts.* 18% decrease -5.1 pct. pts.* pct. pts. Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 32

33 Percent Effects on employment and earnings Employment rates UI Earnings % decrease -2.3 pct pts** Ever worked during year 1 (UI records) 13% increase +5.6 pct pts*** Working at survey interview (18 months) $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 -$286 $12,377 $12,091 Earnings during year 1 records) (UI Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 33

34 Percent Effects on training completion (18-month follow-up) Parent has certificate/degree 6% increase +3.0 pct pts** % increase 2.5 pct pts** Has trade license/certificate Has Associate's degree Program Control Statistical significance levels: *** = 1 percent; ** = 5 percent; * = 10 percent. 34

35 Summary Success in achieving short-term goal: reducing current poverty and hardship (with little reduction in work effort) Improvement in asset-building and banking behaviors Early positive effects on a wide range of human capital outcomes, suggesting a broad response to incentives First international evidence of CCT effects on school achievement Longer-term results will show whether these effects grow enough to be cost-effective Some incentives did not work; don t replicate in current form Too soon to draw final conclusion Evaluation will continue through

36 The Next Generation: CCT Model to be Tested as Part of Social Innovation Fund (SIF) New York City Memphis 36

37 Key Features Target groups: TANF and SNAP (food stamps) Families with 9 th and 10 th graders Siblings in grades 8, 11, and 12 also eligible for education incentives Incentives: Same 3 domains (education, health, workforce), but shorter, simpler set; available for 3 years High attendance; grades; standardized tests Preventive health care and preventive dental care (all members) Sustained employment Parents passing GED test) 37

38 Key Features (con t) More family guidance Family Action Plans Periodic progress reviews Strategic outreach to families not progressing Social network support Resource fund To help families afford extra services for reaching goals 38

39 For more information about MDRC 39