After a two-year study, Steinhardt professors and their colleagues from Manpower Demonstration Research Corporation found that monetary incentives changed how low-income teenagers in New York City spent their time.
In 2007, New York City’s Center for Economic Opportunity and the Mayor’s Office designed a conditional cash transfer program called the Opportunity New York City Family Rewards in an effort to reduce poverty among low-income families. Conditional cash transfer programs provided low-income families with monetary incentives and encouraged them to invest in their health, education and economic potential. The pilot program lasted from 2007 to 2010.
The MDRC found that the Family Rewards program changed how teenagers spent their time, reduced teenagers’ problem behaviors, increased parents’ spending on school-related and leisure expenses and increased the number of parents who saved for the children’s future education. For the subgroup of academically proficient teenagers, it increased the number of those who engaged primarily in academic activities and reduced the number that mostly engaged in social activities.
“The Mayors Office and the City of New York wanted to see if this could be an innovative approach to reducing poverty in New York City,” said Pamela Morris, Steinhardt professor of Applied Psychology.
Morris, who was also a lead investigator in the study and senior fellow at the MDRC, co-authored the report on the findings with two graduate students and J. Lawrence Aber, a distinguished professor of Applied Psychology and Public Policy.
This program was implemented in six of New York City’s most impoverished communities and targeted fourth, seventh and ninth graders. Monetary incentives ranged from $25 to $600.
The MDRC also conducted a core evaluation to investigate the Family Rewards Program’s effect on the participating family’s economic well-being, family health care, children’s education and parent’s employment.
Morris said even though there are other incentives that can be used, monetary incentives were more effective.
“The way that I see it is that low-income families face a lot of constraints on participating in things that are easy for me to participate in,” Morris said. “For example, if I want to bring my child to the doctor, I am salaried. I won’t lose my paycheck for the day.”
“For low-income families doing the exact same thing, they may lose a day of pay or they may risk their position at their work,” she added. “I think what we are trying to do with these rewards is level the playing field a little.”
Steinhardt sophomore Shelby Bambino said she found the report to be interesting
and surprising.
“I think that it’s extremely interesting that they are doing that,” Bambino said. “By simply giving a monetary reward that it not only affects them, but it is also affecting the way that the parents react to it.”
CAS sophomore Rocil Cuevas disagreed.
“I think it’s a good thought because it does help families in need, but I think it gives kids the wrong values, that you should only do what you don’t want to do for money,” Cuevas said. “They should do their homework because it will benefit them in the future.”
Morris said she hopes this temporary program has enlightened these families about what their future could hold.
“The idea being that if you can encourage parents to invest in kids’ human capital, you hopefully can help to resolve some of the challenges with the long-term intergenerational consequences of poverty,” Morris said.
A version of this article appeared in the Tuesday, Nov. 13 print edition. Tanay Hudson is a contributing writer. Email her at [email protected].
