Family Rewards was an innovative approach to poverty reduction in the United States that was modeled on the conditional cash transfer (CCT) programs common in lower- and middle-income countries. The program offered cash assistance to poor families, contingent on their meeting certain criteria related to family health care, children’s education, and parents’ work, in the hope of reducing long-term poverty. The first version of Family Rewards was evaluated in New York City starting in 2007 and had positive effects on some outcomes. The lessons learned from that study led to the next iteration and test of the model (“Family Rewards 2.0”), the subject of this report.

Family Rewards 2.0 was launched in July 2011 in the Bronx, New York, and Memphis, Tennessee. While still offering rewards in the areas of children’s education, family health, and parents’ work, Family Rewards 2.0 offered fewer rewards in each domain, offered the education rewards only to high school students, made the rewards more timely by paying them each month, and included personalized family guidance. The addition of guidance from staff members, who actively helped families develop strategies to earn rewards, represented the biggest change to the original model.

MDRC evaluated the program through a randomized controlled trial involving about 1,200 families in each city, half of whom could participate in the program and half of whom could not. This report presents findings on the program’s effects through four years.

Key Findings

Family Rewards transferred over $6,200, on average, to each participating family during the period in which it operated, or just over $2,000 per program year. Through Year 4, it had produced some positive effects on some outcomes, but left many other outcomes unchanged.

• After some start-up challenges, the program was generally implemented well in both cities by Year 2. The guidance component became more intensive over time, although the amount of interaction between staff and participants was still less than envisioned, especially in Memphis.
• Family Rewards 2.0 increased income and reduced poverty during the program period, and led to improvements in parents’ reports of life satisfaction and happiness.
• The program’s primary effect in the health care area was an increase in preventive dental visits, although there is some evidence that it also improved adults’ self-reported health status, particularly for those in poorer health at study entry.
• The program led to a reduction in employment covered by the unemployment insurance system, driven largely by reductions in work in Memphis.
• The program did not affect students’ school progress through Year 4, either for the full sample of students or for the subgroup of academically proficient students.

The findings show that Family Rewards 2.0, while replicating many of the results from the first model, did not prove to be more effective. Together, however, both studies provide important lessons about the operation and effects of a comprehensive CCT strategy in the United States.