...Bolsa Familia was introduced by President Luiz Inácio Lula da Silva in 2003. The program pays families a monthly stipend of $12 for each child that attends school. Participants also receive rewards for ensuring their children receive all their vaccinations by age 5....

...But Bolsa Familia doesn’t just reduce short term financial hardship. By tying benefits to school attendance, the monthly stipends also function as an investment in low-income children’s future. “Parents know that sending their kids to school is better in the long run,” said James Riccio, who works for MDRC, an organization that evaluates programs designed to reduce poverty....

...To test the possibility of a program like Bosla Familia working in the United States, New York City Mayor Michael Bloomberg, along with the Center for Economic Opportunity, launched an experimental program called Family Rewards. The first phase of the program started in 2007 and ran until 2010.

Researchers responsible for the creating the Family Rewards project decided to give families many ways to earn benefits because they were not sure what incentives would resonate with American families. The program offered rewards ranging from $20 to $600 for things ranging from perfect school attendance and maintaining health insurance coverage to receiving preventative medical and dental care, and sustaining full-time work.

The average participating family earned an annual $3,000 payment per year from Family Rewards, according to James Riccio who participated in the evaluation of the program. His analysis reveals mixed results. While it reduced immediate material hardship for all participants, its impact on human capital development was unclear. The program only had a measurable impact on high school students who met the minimum academic standards coming into grade nine. Among these, student attendance improved, and they were more likely to pass their state achievement exams and graduate on time.

Riccio also said the participants of the program had increased the rates of health insurance coverage and reduced reliance on emergency rooms for routine care. Participants in Family Rewards were also significantly more likely to receive preventative dental care. Still, “two years is too short a time to see any real health outcomes,” said Riccio.

Some observers called the Family Rewards experiment a failure, but according to Riccio the jury is still out. “In the first generation of the pilot we noticed some promising things and some things that aren’t working,” he said, “Now that we have a bit of information to work from we can revise incentives. Poverty in America and Latin America are different.” What works there might not resonate here — the only way to figure it out is to test and test and test, he said.

Currently, Riccio is evaluating a second generation Family Rewards program that is being administered in Memphis and the Bronx. For this phase they pared down the benefits offered and changed the benefit structure. Instead of an annual lump sum, families receive their benefits once a month. “We think people will be more likely to participate in the program if payments are made every month, reinforcing the positive things they are doing,” he said. They are also experimenting with paying kids for grades — $30 for an A, $20 for a B, $10 for a C — for each subject on every report card....

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