SOCIETY

WE PAY CASH FOR GOOD BEHAVIOUR

New programs pay people to lose weight, wed, take their kid to the doctor. Do they work?

DAFNA IZENBERG December 17 2007
SOCIETY

WE PAY CASH FOR GOOD BEHAVIOUR

New programs pay people to lose weight, wed, take their kid to the doctor. Do they work?

DAFNA IZENBERG December 17 2007

WE PAY CASH FOR GOOD BEHAVIOUR

SOCIETY

New programs pay people to lose weight, wed, take their kid to the doctor. Do they work?

DAFNA IZENBERG

Aniedrea and James Alsobrooks were married on Feb. 23, 2007 in Arlington, Va. It was a spur-of-the-moment affair—well, kind of. They’d been together on and off for 11 years, cancelled a wedding a year and a half earlier, and reconciled only recently. When James suggested getting married on the anniversary of the day they first met, Aniedrea blew him off. “I was thinking he was joking,” she recalls with a laugh. But that morning, he woke her up along with 15year-old Tyjuane (Aneidrea’s son from a previous relationship) and 10-year-old Semaj, and carted the whole family off to a justice of the peace. Seven months later, Aniedrea is enjoying married life. “Our communication is a lot better now,” she says.

So is their bank account. In the fall of2006, the Alsobrooks started attending a marriage course that one of Aniedrea’s hair salon clients had told her about. Together with several other African-American couples, they talked about everything from money management to “hot monogamy,” and learned some useful techniques for resolving conflict. There they also found out about a new program for low-income Washington couples, in which the government would match every dollar they saved with three more, up to a maximum

of US$12,000. The conditions: they had to put away at least $50 a month and take eight hours of financial counselling, and could only use the money to buy a home, start a business, or enroll in an educational program. The clincher was, in order to collect the matched savings, they had to be married. James and Aniedrea opened a “marriage development account” in December, just a few months before their wedding day.

It may seem a peculiar variation on the dowry, or just a plain and simple bribe. In fact, it’s a “conditional cash transfer,” a program that ties benefits to specific behaviours; in other words, a rewards system. For the past decade, Latin American governments have been experimenting with CCTs as a way to promote education and nutrition among the poor, and NGOs have adapted them in countries like Afghanistan, where the World Food Programme sends cans of cooking oil home with girls whose families allow them to go to school. There are even programs aimed at professionals—in Kenya, monetary prizes have been offered to teachers in grade schools whose students performed well.

But lately, more and more CCTs have been cropping up in Western countries. Last summer, an Italian mayor promised $75 to townspeople who lose three kilograms, and another $150 if they keep the weight off after five months. In September, the U.K. government announced that, beginning in 2009, all preg-

nant women, regardless of income, will be given $250 if they refrain from smoking and drinking and agree to receive professional advice on nutrition. And since 2001, the Canadian federal government has been testing a program called learn$save, similar to the one in Washington, that matches money saved by low-income earners provided they only use the funds for education, training or a small business start-up.

But nowhere is the CCT model being embraced with more gusto than in New York City. Mayor Mike Bloomberg is currently in the midst of rolling out Opportunity NYC, a three-pronged plan with a family-focused component that pays low-income parents for things like attending parent-teacher conferences and maintaining health insurance. There are also several rewards for children’s achievements in school, some of which will be delivered directly to children. Bloomberg has even mused about giving kids cellphones with free minutes in exchage for good marks. “For all of us, the stress of our daily lives can

BLOOMBERG HAS TALKED OF GIVING CELLPHONES TO KIDS IN EXCHANGE FOR GOOD GRADES

cause us to make decisions that aren’t always in our best interests,” he said last June, when the incentive schedule was released. “Living in poverty makes it even more difficult.” Rewarding good behaviour is best known as a parenting strategy for managing tricky times—problems with toilet training, sibling rivalry, kids refusing to sleep at night. It isn’t much of a leap, then, when critics argue that incentive programs like Bloomberg’s patronize, even infantilize, the disadvantaged. That’s a point naysayers of nearly every political stripe agree on. Nicole Gelinas, writing for New York’s conservative CityJournal, describes Bloomberg’s initiative as “insulting to a breathtaking degree” in its assumption that poor people don’t already, for example, have

library cards (for which there is a $50 incentive). “Paying people not to do something bad is simply terrible government policy,” she argues. “Where does it stop? Will we start paying young men between the ages of 15 and 32 not to carry illegal guns?”

Meanwhile, Margy Waller, from the leftleaning think tank Inclusion in Washington, says presenting Opportunity NYC as a possible solution to poverty reinforces a public belief that people are poor because they’ve made poor choices. Speaking more.broadly, Atlantic Monthly blogger Megan McArdle, a self-described “leftish libertarian,” says defining “good behaviour” is no business of any government. Poor people, like all people, she writes, should be free to make mistakes. “If they want to eat cornmeal mush for a month while watching cable television, let ’em.”

Incentive programs were originally developed largely as a foil to what many consider the ultimate infantilizer: welfare. In the late ’80s, policy-makers woke up to the real-

ity that social assistance, as delivered in North America, was addictive, offering a better standard of living than many low-wage jobs. “There was a real sense that we had thought about welfare incorrectly,” says Gordon Berlin, president ofMDRC, the New York-based social policy research organization that is evaluating Bloomberg’s initiative. “That it had mostly been about supporting people when they didn’t work, and maybe it should be about supporting them when they did.” So in the early ’90s, both Canada and the U.S. started testing wage-supplement programs, nudging people off welfare and into low-paying jobs by topping up their income. Canada’s Self-Sufficiency Project is widely considered the most dramatic of these experiments. Piloted

‘WHERE DOES IT STOP? WILL WE START PAYING YOUNG MEN TO STOP CARRYING ILLEGAL GUNS?’

in southern New Brunswick and B.C.’s Lower Mainland from 1992 to 1999, SSP doubled the earnings of single parents who stopped collecting welfare to take full-time, minimumwage jobs. Families received the supplement for three years; they were tracked for another three years. “The thing that SSP did very well was to solve a paradox,” says Jean-Pierre Voyer, executive director of the Social Research and Demonstration Corporation, which evaluated the program. That was the paradox of how to give poor people money while also encouraging them to work.

Around that time, Mexico began experimenting with a different sort of incentivebased program, whose goals included making babies bigger. Due to poor prenatal nutrition, infants in the country’s rural reaches are often born stunted; many are never vaccinated or seen for routine checkups. So the government introduced Progresa (now called Oportunidades), a system that tied rewards not to employment but to what might be called good parenting. It gave mothers money for bringing newborns to the doctor and feeding them fortified supplements. It gave families “scholarship” money if they sent their kids to school instead of to work in the fields. And it built in a requirement for ongoing, rigorous evaluation. Ten years later, it reports higher school enrolment and bigger—or longer, by about 1.5 cm—babies.

Now, the U.S. is turning south for lessons in poverty alleviation. Bloomberg visited Mexico City last spring, announcing the New York program would be modelled on (not to mention named for) Oportunidades—with some critical differences. The US$53 million funding Bloomberg’s program is all private money, prompting obvious questions about sustainability. Opportunity NYC’s goals are somewhat more vague than Mexico’s, with a free-floating target of poverty, and incentives that aim to boost education, health and

workforce participation. Bloomberg is calling the program “self-serving,” meaning it helps rich folks too. “If anybody thinks that poverty doesn’t affect them, they are making a very bad mistake,” he said when he first announced the program last March. “This is something everybody’s in together.”

Incentive programs do seem to breed the least likely unions. The Washington marriage initiative, for example, was the brainchild of Republican Sam Brownback, whom Rolling Stone has called “God’s senator.” With high-profile positions against abortion and gay marriage, Brownback appears the natural foe of someone like Eleanor Holmes-Norton, the Democrat congresswoman for Washington. “He’s as conservative as I am liberal,” she agrees. And yet, when he approached her to support his proposal for marriage development accounts, HolmesNorton says she wasn’t “at all” reluctant. A strong advocate for black men and boys, Holmes-Norton is particularly alarmed by a current statistic that 70 per cent of black children in the U.S. are born to never-married mothers. Like Brownback, she wants kids to grow up with two parents, and while she doesn’t believe incentives “make” people marry, she suggests they can make the prospect of committing to family life somewhat less financially daunting for people who are on the fence, by helping them buy homes, for example.

Berlin similarly thinks Bloomberg’s plan is less about trying to get people to behave well than it is about clearing the way for them to do things they already want to do. For instance, the program pays $200 per family member for annual medical checkups, and $100 each for doctor-recommended followup visits. This would go a long way, says Berlin, to offset money lost by people whose jobs don’t pay for sick time or medical appointments. “The important thing is to step back from ideological debates,” says Berlin. “The mayor’s saying, ‘let’s see whether it works.’ ”

On this count, predictions are mixed. Economist Gary Burtless of the Brookings Institution thinks that such incentives can only really interrupt generational poverty in situations of extreme deprivation. In the U.S., he says, “children are already guaranteed, if their parents have any gumption at all, minimal levels of nutrition, access to the health care system, and an education system, which, while it may not be great, is certainly far better than what is available in rural Mexico.” He isn’t buying the argument that parents miss doctor’s appointments or meetings at kids’ schools because they don’t want to lose a day’s pay; many of them aren’t working. “They don’t see what the benefit is, or they just have something they would rather be doing,” he says. He’s not convinced a $30 reward will change that, though it might if the money came fast enough. “We’ve run some experiments,” says SRDC’s Voyer, “and found there are many people who value $ 100 now more than $1,000 in one week.”

But Waller says even if it does work, Bloom-

berg’s program ultimately does more harm than good. For starters, she thinks the mayor’s missing the bigger picture. “One in three jobs in this country pays low wages and provides no benefits,” she says. “That would seem like the more important problem to address.” And a possible solution to this problem—legislation allowing all workers, including con-

CRITICS ARGUE IT’S INFANTILIZING. POOR PEOPLE, LIKE ALL PEOPLE, ARE FREE TO MAKE MISTAKES.

tracted employees, to have paid time off—is thwarted by endorsing the idea that poverty could be solved if poor people behaved better. “Voters and taxpayers are reluctant to ask the government to get involved,” she argues, ‘if they believe people would be just fine if they would only change some particular behaviour, or would have made a better choice some time in the past.”

By early this month, the family-focused component of Opportunity NYC was nearly full, with 4,500 out of 5,000 participants registered (half of whom are in a control group that gets no aid). Each family received $50 to open a fee-free bank account; their first “good behaviour payments” are being deposited this month. After that, the payments will come every two months. In the course of one year, families in the study group could theoretically net as much as $5,000 (if they meet all requirements)—nothing to sneeze at. At program orientations, says Berlin, there is a cautious sense of optimism. “They know they have a lot to do,” he says. “They think they’re doing these things now, but they’re not sure.”

In Washington, after almost two years, five couples have closed their marriage development accounts and purchased their own homes. Another 43 are still saving. Only two are engaged, the rest already married— Aniedrea and James among them. The program didn’t play a part in their decision to wed, says Aniedrea, but it has made a difference in their marriage, and vice versa.

Before, says Aniedrea, “We would be on different agendas. I’d be saving for one thing, he would be saving for another. Or not saving at all.” And while the Alsobrooks’ marital status doesn’t stand out among the program’s participants, it certainly does in their neighbourhood. “My kids’ friends have actually come over and said things like, ‘your parents live together?’ ” recounts Aniedrea. “ ‘Married?’ Oh man, they act like it’s a big thing. The kids like it.” M