Can people break out of poverty by changing bad habits?
New York City Mayor Michael Bloomberg is experimenting with a program to defeat poverty by rewarding good behavior.
Opportunity NYC is a privately-funded plan that will hand out cash to low income people for responsible conduct like doing well on school tests ($300), holding a job ($150) or visiting the doctor ($200). Proponents believe many people languish in poverty because of destructive lifestyle choices that they can change and that the key is motivating them to take on better habits.
Studies show that conditional cash transfer programs (CCTs) similar to Opportunity NYC have achieved stunning results in
While the AP refers to the Latin American programs briefly, it doesn't explain how well they have worked: “The rewards have been used in other countries, including
In contrast, AP devotes nearly 18 percent of the words in its news story to “critics” who believe behavioral change is not the way to address poverty: “But some critics have raised questions about cash reward programs, saying they promote the misguided idea that poor people could be successful if they just made better choices.”
AP cites the co-founder of Inclusion, a Washingon, D.C.-based research and policy organization: “'It just reinforces the impression that if everybody would just work hard enough and change their personal behavior we could solve poverty in this country, and that's not reflected in the facts,' said Margy Waller…Waller, who served as a domestic policy adviser in the Clinton administration, said it would be more effective to focus on labor issues, such as making sure wage laws are enforced and improving benefits for working people.”
But evidence from south of the border proves that changing behavior really does work to reduce poverty and boost personal health and education.
CCT also improves poor children's health and education.
“In contrast to many development programs, the recent expansion of conditional cash transfer programs throughout the Latin America and
Rawlings and Rubio argue CCT programs are not only more effective than regular welfare programs, they are also more cost effective: “In Mexico, the evaluation revealed that CCT investments are delivered in a cost-effective manner…the administrative costs of delivering cash to poor households appear to be small relative to the costs of previous Mexican programs…”
Rewarding the poor for good behavior really gets results.