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NYC Pulls the Plug on Cash-for-Good-Behavior Program

New York City officials have decided not to make permanent a bold experiment in which poor families were paid for doing things like taking their children to the dentist, sending them to school regularly, and holding a full-time job. High school students could also earn cash for taking state Regents exams.

According to the New York Times, the city's decision came after a study showed that the program, in its first 12 to 24 months, had yielded only "modest" effects on families' well-being. It increased the likelihood, for example, that families would visit the dentist and have bank accounts and health insurance, but it did not improve school-related outcomes overall for students in elementary or middle school.

That's according to early findings released yesterday by MDRC, a New York-based research group. As part of the evaluation, MDRC randomly assigned 4,800 families, with 11,000 children, to take part in either the "conditional cash transfer" program or a control group.

While the researchers did not find any dramatic academic gains for younger students, they did find some positive outcomes for a subgroup of high school students—those who were scoring at basic levels and above on state exams at the start of the experiment. Among this better-performing group, which accounted for about a third of the high schoolers in the study, there was: a 6 percent reduction in the percentage of students who repeated the 9th grade, a 15 percentage-point increase in the likelihood of having a 95 percent attendance rate, an 8 percentage-point increase in the likelihood of earning at least 22 credits, and a 6 percentage-point increase in the likelihood of passing at least two Regents' exams. Given that much of the first few months of the program were spent ironing out kinks, that's not so bad, according to MDRC.

Did NYC pull the plug too soon on its plans for expanding the privately funded program? We may yet find out. Experiments with conditional cash transfer programs have proven to be very successful in Mexico and other less-prosperous countries, but this experiment was the first of its kind in the U.S. And researchers will continue to monitor it for three more years.

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