Anti-poverty successes are celebrated nationally, but how quickly we forget the failures. Does anybody remember the New York City conditional cash transfer program for poor families, Opportunity NYC? The program, which supporters hoped would help to change the behaviors of poor families and curb the transmission of poverty from parents to children, was quietly shelved last year after some disappointing results from an evaluation.
The lessons of Opportunity NYC are worth remembering in the current context. Mayor Michael Bloomberg is making a splashy announcement today on a $130 million new initiative to support employment, education, and reduce incarceration among 350,000 black and Hispanic men living in the city. Even in relatively prosperous times, low-income, minority men experience high rates of disconnection and marginalization, but the problems are more acute during an economic slump. Some of the problems targeted by the initiative, such as a lack of ID cards that prevent disconnected men from getting jobs, have relatively easy quick fixes, but others such as the stigma against hiring ex-offenders and perpetually low levels of literacy are much harder to solve.
The new initiative for young men and Opportunity NYC are substantively different in their approach and targets, but they are consistent with a broader approach to tackling chronic social problems in New York City: identify a prominent issue, heavily leverage funds from private stakeholders (including the Mayor’s own pockets), cobble together the best research available, develop a complex multi-prong initiative, and see what works.
How was Opportunity NYC supposed to work and why did it fall short? Interested researchers can check out the MDRC impact evaluation here.
In 2007, the city randomly selected 2,400 households with children to participate in the program out of more than 4,800 households that applied following an aggressive public marketing campaign (non-selected eligible households were the control group).
The program offered a set of 22 different incentives during its first two years, ranging in value from $20 to $600. For example, a middle school student scoring at proficiency level could earn families an average of $350 per subject test, parents were paid $25 for showing up at parent-teacher conferences, taking a child to an annual medical check-up earned families $200, and parents were paid $150 per month in which they had full-time employment.
Given the complex structure of the incentives, one concern is that families may not have adequately understood how to earn the money. Drawing on qualitative evidence, the impact report concludes: “Parents understood the program’s general offer and purposes but many were initially confused about some of the details, requiring the providers to make ongoing efforts to educate families about the specific rewards and how to claim them.”
Despite some confusion, families in the program were quite successful at earning many of the program rewards, taking in an average of $3,000 per year. Almost half of the earnings came from meeting the education conditions (44 percent), followed by health-related conditions (38 percent), and 18 percent of the income came from work-related conditions. Families many used this money to pay for expenses, but also reported some increased leisure activities and allowance for children.
Not surprisingly since the treatment involved cash transfers, the program had a significant impact on the percentage of families below the poverty line (16 percent lower than treatment group) and also on material deprivation (33 percent less likely to report problems with food security), improved financial security and bank assets. The program also had a significant effect on some preventative health services utilization encouraging greater use of a regular source of care, lower use of the emergency room, and greater frequency of dental visits. For parental employment, there were some modest significant effects on current employment, but the treatment group actually worked less and earned slightly less than the control group.
These gains, although somewhat encouraging of more positive behaviors, did not translate into any gains in educational results for the children in the study. Attendance did not improve in any group of children except for 9th graders – where it remained abysmally low. Similarly, proficiency levels in basic literacy and numeracy did not improve at any grade level.
In addition to the less than stellar educational impacts, the Opportunity NYC program was probably undone by the excessive cost and the political headache that it created for the Mayor’s office. None of this is to say that the program could not have succeeded, given more time and ability to refine the implementation, but in the current economic and political climate the prospect of a large city shelling out money to poor families to get them to change their behavior seemed like high-cost bribery to some critics. Whatever modest successes the new program for low-income men produces, expect some of the same criticisms that the government is spending too much money to try and change the behavior of the poor. Considering that New York City is one of the wealthiest and most progressive cities in the United States, it seems unlikely that these types of initiatives will catch on in other states and cities. I expect that some of the buried failures won’t be excavated for a long time.