Which program is not a cash transfer program

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Since the Indian Ocean Tsunami, the humanitarian sector at large has gone through a progressive shift from distributing goods and in-kind assistance to increasingly using cash transfers as programming modality in times of emergencies and for recovery, in both conflict and disaster contexts In the right context — when local markets are functioning and able to meet demand — cash transfers can serve as an appropriate and powerful alternative to direct distributions of food and non-food items also known as in-kind assistance.

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Effects for children are shown in Table As the table indicates, however, a much lower percent makes the recommended two visits. The importance of oral health has been well-documented, in addition to disparities by income level in access to oral health services Fisher-Owens et al.

Poor oral health can affect children in the short run but can also lead to a number of more serious medical conditions as they age. Footnote 14 14 Medicaid covers a portion of dental visit costs, but many dentists do not accept patients covered by public insurance. Although there are a number of clinics in New York City offering free or reduced-cost dental care, getting preventive dental care nonetheless requires that low-income families search out these clinics and pay sometimes a small cost for this care.

Offering incentives for work and training is not a new idea, and there is evidence from earlier programs that these incentives can increase work and, in some cases, training Hendra et al. What is new, however, is that these incentives are part of a larger package of rewards.

First, the large menu of options might encourage individuals to focus on some, easier to achieve, activities to the exclusion of other, more challenging activities. Second, the additional money families earn from the other rewards may reduce work effort through income effects.

Table 13 presents effects on employment and earnings, using data from the surveys and UI records. Data on the job held at the month point show that the program also increased full-time employment by 5. This effect is expected, given that the work rewards were only earned if parents worked 30 or more hours per week. The bottom panel of the table, showing UI data, tells a different story. The program appears to have reduced employment in the first year, with no effects thereafter.

Family Rewards offered incentives for all types of full-time employment, so it is not clear why it would only increase employment in jobs not reported to the UI system, particularly since individuals had to present adequate documentation in order to earn rewards.

In addition, smaller employers and employers with high turnover, who tend to employ relatively high numbers of less-skilled workers, tend to underreport earnings to the UI system more than other types of employers Burgess et al. To look more at the different effects given by the two data sources, we examined effects on several job characteristics, as reported on the surveys. As shown in the top panel of the table, the program increased the rate of self-employment by 2.

We also looked in more detail at the types of jobs respondents held at the month point by whether their employment status matched on both data sources. The data reveal that more than a third of the jobs that are reported on the survey but not on UI records are in child care, which may be more likely to be paid in cash or not reported by employers.

In contrast, for respondents for whom both sources indicate employment, only 2. The inconsistency between the two sources remains puzzling, although some of it can be explained by self-employment and perhaps employment in the types of jobs that are more likely to be underreported to the UI system.

To examine heterogeneity in effects, we estimated effects for parents defined by their education level and employment status at study entry. The results are shown in Table For parents with higher education levels or more work experience, the employment effects were more positive than for their more disadvantaged counterparts, although the differences in impacts across the groups are not statistically significant.

For those with less education and experience, the program led to small increases in survey-reported employment and reductions in UI-reported work. The reduction in earnings for the less educated subgroup is concerning. It is not surprising, however, that those individuals least connected to the labor force may be most likely to reduce their work effort in response to income earned from the education and health rewards.

Finally, the program did lead to a small increase in the receipt of certificates and associates degrees Table The program also led to behavioral responses across the three domains, the key to long-term poverty reduction, although these effects were either small or limited to subgroups. For example, the program increased grade progression and graduation rates for proficient 9th graders, but had no effects for their less proficient peers or on younger students.

The findings for education are consistent with a growing literature documenting that incentives can increase student effort. Footnote 16 16 However, as noted earlier, it is not always clear that this increased effort while the incentives were offered translates into higher achievement in the long-run. One reason for the lack of effects may be that the incentives were not as salient to the younger students in Family Rewards.

In other programs, the incentives were paid more frequently and were given directly to the students. In contrast, Family Rewards, like most other CCTs, gave rewards to the parents and relied on them to communicate the incentives to their children.

Footnote 17 17 Interviews with participants indicated that parents varied widely in terms of how much they told their younger children about the program.

The lack of effects for younger children is also a bit surprising, given the substantial reductions in poverty that these families experienced for at least the 3 years of the program. Effects for more academically prepared 9th graders are consistent with other research that finds that effects of incentives are concentrated largely on students on the margin of higher performance and, in particular, on those who were reading and language proficient.

In some ways, it is to be expected that the effects of incentives would be concentrated on those students at the margins, since in the absence of services students were left to their own devices to earn the rewards.

In a similar vein, Fryer suggests that a more effective strategy might be to reward inputs to school progress rather than outputs, since many of the students and parents may not know how to improve their school performance in order to earn the incentives. An alternative, or complement to this strategy, might be to offer more guidance to families about how to help their children perform better in school.

In the health domain, there is little evidence on the effect of incentives to maintain health insurance, and recent research shows that having health insurance does increase the use of preventive care Finkelstein et al.

Family Rewards led to a small increase in rates of health coverage but did not increase preventive doctor visits. Rates of coverage and care were already quite high for families in the control group, which raises the question of whether the program might have had larger effects in an area with lower coverage.

In the work domain, the findings show modest positive effects, albeit only for work reported on the surveys. They also illustrate the potential for income effects that dampen work effort. Although reductions in work effort seemed to occur largely for groups less connected to the labor force, it is also possible that the rewards earned by individuals in the other two domains dampened the effectiveness of the work rewards more broadly.

The answer may not be to eliminate the work incentives altogether, since the reductions in work may have been bigger in their absence. Similarly and in response, the American Recovery and Reinvestment Act was passed in early The Act included direct spending measures, among other policies, but it also expanded food stamp benefits for low-income families and the Earned Income Tax Credit for larger families. It is not immediately clear how the onset of the recession and the subsequent Recovery Act should affect program impacts.

Although the results presented here suggest that this version of a CCT is unlikely to lead to long-term reductions in poverty for most families, the findings have fed into the next iteration of the model. A modified version of Family Rewards is being replicated and tested in two cities in the U. For example, the new program targets families with children who were set to enter 9th or 10th grade in the upcoming school year.

It is much simpler than the original program, offering only eight incentives instead of 22, across the three domains. The new program also includes a more active advisement role for the staff, in which they develop an initial plan with every family and aim to meet with them twice per year to discuss their progress toward earning the rewards.

Finally, the new program attempts to make the rewards more timely and thus more salient by disbursing payments monthly, rather than every 2 months. Rewarding grades, in addition to test scores, also provides a more immediate incentive for school performance.

The findings from the evaluation of Family Rewards add to a growing body of evidence on why families may not follow through on certain behaviors and which of these behaviors can be changed by incentives.

More broadly, the Great Recession highlighted the need for a safety net in the U. Politically, this program may be more popular and sustainable if it came with these types of strings attached. This system, the EITC in particular, worked well when jobs were plentiful but has proven inadequate in a bad labor market Berlin Conditioning benefit receipt on a range of productive activities work, schooling and health may be a way to expand benefits to those in need.

Finally, if the CCT idea were to play a larger role in U. While a full analysis of costs is beyond the scope of this paper, there is no doubt that the costs are large and that they likely outweigh the benefits, given the modest effects the program had in each of the domains.

In addition, an important component of the cost is maintaining the payment system and monitoring and compliance for each of the reward conditions. While it is unlikely that an unconditional cash transfer to families would have led to similar effects in each of the domains, the lower cost would be one advantage of providing transfers with no strings attached.

Political support for an unconditional cash transfer of this size, however, may be limited. This paper is based on results presented in Riccio et al.

For example, see Schultz ; Behrman et al. Bettinger finds some evidence of reduced effort in a program that rewarded students for achievement on one reading and math test per year. Among students in the program group who had already earned the maximum incentive from the first test, the effect of the program was to reduce their performance on the second test.

The results were very similar when impacts were estimated using models that did not include these additional controls. In practice, families received the rewards in a somewhat lumpy fashion, since several of the largest rewards were paid out for periodic items such as test scores and Regents exams.

For example, about half of all families received more than 45 percent of their total payments for the year in just one pay period. The difference may be due to non-linearities in the relationship between income and these material well-being measures, or to the fact that the program also increased savings and the number of families with bank accounts, which can also affect perceptions of well-being and food security.

We calculated attendance rates for all students, including those students who were no longer enrolled in NYC public schools, in order to preserve the experimental comparison. However, test scores and proficiency rates were only calculated for students who took the tests. See Medina Effects were then estimated separately for the bottom third, the middle third, and the top third schools. Separate models, interacting pass rates with treatment status, showed similar results.

Similarly, data for from the U. Census Bureau indicate that the percentage of low-income children without insurance was lower in New York than the U. An interesting, yet more speculative, finding is that the program seems to have improved self-rated health status and reduced the reported incidence of asthma among parents who had the poorest health at study entry. This finding should be interpreted with some caution, however, given that the analysis by health status was not pre-specified.

In addition, the effects on asthma are not easily explained by other effects such as a reduction in smoking, or an increase in the rate of preventive doctor visits. A recent study also documents effects of poor oral health on labor market outcomes Glied and Neidell To earn a reward for full-time work, participants were required to submit along with the mail-in coupon either a pay stub indicating weekly hours worked during the given activity period or, if weekly hours are not indicated on pay stubs, a letter on official letterhead from their employer providing this information.

Rewards were not paid directly to younger students for practical reasons and because many parents would not have wanted their children to be given the sometimes large sums of money provided through the program. See, for example, Dahl and Lochner ; Duncan et al. Establishment Measures of Employment. Impact Evaluation Series No Book Google Scholar. Am Econ Rev 99 — Angrist J, Lang D, Oreopoulos P Incentives and services for college achievement: evidence from a randomized trial. Am Econ J Appl Econ 1 1 — Article Google Scholar.

Policy Research Working Paper No. Evidence from a randomized cash transfer program. Q J Econ 4 — Baird S, Ferreira F, Ozler B, Woolcock M Conditional, unconditional and everything in between: a systematic review of the effects of cash transfer programs on schooling outcomes.

J Dev Effect 6 1 :1— Google Scholar. Benabou R, Tirole J Intrinsic and extrinsic motivation. Rev Econ Stud Am Econ J Econ Policy. Department of Health and Human Services. New York. Am Econ Rev 5 — Deci EL, Koestner R, Ryan R A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychol Bull — Soc Indic Res 1 — In: Poterba, James M.

The Quarterly Journal of Economics 3 — Health Aff 27 2 — The World Bank, Washington D. Fryer R Financial incentives and student achievement: evidence from randomized trials. Glied S, Neidell M The economic value of teeth. J Hum Resour 45 2 — Brookings Institution, Washington DC. Jackson CK A little now for a lot later: a look at a Texas advanced placement incentive program.

J Hum Resour 45 3 — Agency for Health Research and Quality, U. Lagarde M, Haines A, Palmer N Conditional cash transfers for improving uptake of health interventions in low- and middle-income Countries. A systematic review. J Am Med Assoc 16 — J Eur Econ Assoc 8 6 — Those efforts at social assistance have fended off the worst short-term impacts of poverty for tens of millions of households.

They also have boosted long-term capacity by requiring parents to enroll their children in school and seek critical health services. But, as they succeed, skeptics argue that they run the risk of creating a culture of reliance, of idleness and chronic unemployment. My research shows those fears may be misplaced: CCT programs may actually increase participation in the labor force.

On the contrary, they created opportunities for mothers of recipient children to start their own businesses, enter the labor market, and begin to move towards independence. In economists from Harvard and MIT analyzed data from randomized controlled trials on seven cash transfer programs in developing countries, including Honduras, Mexico and Nicaragua. They found no evidence that the programs discouraged work. My study suggests that the authors may actually have understated the ability of such programs to actively encourage employment.

Their investigation focused on programs that targeted poorer beneficiaries. The Bolivian CCT, by contrast, is not means-tested. It is given to the very poor who need the extra cash to cover basic households expenses. But it is also awarded to those who are slightly better off, would have sent their children to school even in the absence of the program, and could use the money to find a way into the labor force.

It helped them to overcome cash limitations to employment. How exactly did that occur? And that extra cash made a difference. The CCT, I found, increased the probability of female households working by four percentage points, mostly through self-employment, and their time working each week by 2.

This is in line with various findings from other parts of the world that providing cash transfers to the poor can in fact promote work. A review by World Bank economists shows that giving cash grants to poor entrepreneurs allows to them to expand their businesses and thus increase their work hours. As in my study, those effects may have had to do with the nature of the beneficiaries. That is because the recipients, though poor, were better off than the general population and needed extra cash to either start or scale-up businesses.

The Bolivian study has an additional implication. Access to credit in these largely rural areas was limited, or if provided by informal lenders, prohibitively expensive. While the results from my study highlight the effectiveness of CCT programs at helping women without access to credit, they also highlight a far from ideal picture when it comes to financial development.