During my five years doing social work in Seattle, I frequently discussed with co-workers in the social-service field how best to alleviate poverty and help our clients become productive members of society. In my experience, the ratio of “successes” to “failures” was deeply discouraging.
The mountain of challenges so many faced was staggering. Addiction, mental illness, and illiteracy were commonplace, but on top of that were the more seemingly common-sense skills of dressing properly for an interview, showing up to work on time, and peacefully resolving conflicts with those in positions of authority that were sorely lacking. So much of what had been instilled in my social-work colleagues and in me in our mostly middle-class homes was alien to many of our clients.
This lack of basic life skills, combined with the aforementioned negative forces, overwhelmed whatever ability our clients might otherwise have had to act in their own self-interest. The goal of housing, employment, and stability- the responsibilities of a mundane life- were simply too much. For many, homelessness, unemployment, and incarceration were simply normal.
Looking back on those idealistic days when I ran a program to help ex-offenders reintegrate into society, I can’t help but wonder whether we should have been trying other methods to motivate the many individuals who wanted to turn their lives around.
Several recent studies shed some light on how financial incentives can, and sometimes cannot, bring about what most citizens would consider “responsible” behavior. In particular, Brazil and Mexico have had enormous success in raising living standards through these conditional cash transfer programs. Brazil’s initiative, Bolsa Familia, serves approximately one-quarter of all Brazilians, or 50 million people, providing low-income families a monthly stipend of about $13 for each child 15 or younger who is attending school, up to three children. Additional payments are available to families for each child age 16 or 17 who stays in school. Families in extreme poverty receive a basic benefit of about $40. The program has helped reduce poverty from 22 percent of the population in 2003 to 7 percent in 2009.
Mexico’s program, Oportunidades, serves 5.8 million families or about 30 percent of the population. A family in the program with two children in school that meets all its responsibilities can receive about $123 monthly in grants. The program has helped reduce malnutrition, illnesses, and child labor while increasing school enrollment.
Meanwhile, in New York City, Mayor Michael Bloomberg recently announced that a program using private funds to provide cash incentives for certain actions of parents and students was winding down. The program offered cash payments to parents for activities like attending parent-teacher conferences, going to the dentist, and visiting physicians’ offices instead of emergency rooms. Students received payments for passing state assessment exams, graduating from school, and attending at least 95 percent of scheduled school days. Although the program resulted in few gains in student performance or attendance, it did increase the establishment of bank accounts over check-cashing businesses and reduced reliance on emergency rooms. According to many researchers, it is too early to tell how effective the program was.
Critics of these conditional cash transfer programs argue that they erode intrinsic motivation and essentially serve to bribe people into good behavior. This is a fair criticism, but in a time of rising poverty, a national incarceration rate so high that it swallows up funding for education, and discouraging test scores from American students, isn’t it time to consider some new approaches to solving social problems?
