In 2007, New York City’s Center for Economic Opportunity launched Opportunity NYC–Work Rewards to test three ways of increasing employment and earnings for families who receive rental assistance under the federal Housing Choice Vouchers Program. Two of the interventions include the Family Self-Sufficiency (FSS) program, the main federal effort for increasing employment and earnings and reducing reliance on government subsidies. FSS, which is administered by local public housing authorities, offers participants case management to connect them to employment and social services, as well as a vehicle for building their assets through an escrow savings account. As a family’s income increases, so does its share of the rent. Families in FSS pay that increased rent to the landlord, and the housing authority credits the family’s escrow account based on the increases in earned income during the term of the FSS contract. Escrow accruals are paid to participants when they complete the program, which could take up to five years.

The Work Rewards demonstration is evaluating the effectiveness of the FSS program alone (“FSS-only”) as well as an enhanced version of the program that offered all the components of FSS plus special cash work incentives (“FSS+incentives”) conditioned on reaching specific education- and employment-related benchmarks. Work Rewards also tests an offer of those same incentives alone, without FSS, to determine whether this administratively simpler and potentially less costly approach could be effective. The demonstration used an experimental design, with program and control groups for the different studies. This report presents results over four years.

Key Findings

• FSS-only and FSS+incentives increased enrollment in educational courses, but this did not lead to an increase in degree or certificate receipt. Both FSS programs also increased the number of participants connected to mainstream banking, reduced the use of check cashers, and increased the number of people reporting any savings — all measures of financial management.

• FSS+incentives had a small impact on employment when averaged over the four-year study period. However, that impact appears to have been driven by large and statistically significant increases in employment and earnings (a gain of 47 percent over the control group) for participants who were not working at study enrollment.

• Neither FSS program reduced poverty or the incidence of material hardship, even for the subgroup of FSS+incentives participants with large gains in employment and earnings.

• FSS+incentives produced some late-occurring reductions in the receipt of Temporary Assistance for Needy Families and food stamp benefits.

• The incentives alone produced no consistent overall effects.

• None of the models so far has shown effects on those who were employed at enrollment.

The final report will include an analysis of FSS graduation rates and a benefit-cost analysis. A national evaluation of the FSS program that was commissioned by the Department of Housing and Urban Development, which MDRC is leading, will provide insight into which program experiences and impacts are generalizable to the national program and which may be specific to Work Rewards.