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A Conditional Cash Transfer program called "Opportunity NYC" is mentioned in this article. Given what I read in the article, I expected the amount of money in q

by jf 9y ago

A Conditional Cash Transfer program called "Opportunity NYC" is mentioned in this article. Given what I read in the article, I expected the amount of money in question to be on the order of hundreds or thousands a month, but according to Wikipedia, the only gave parents "$40 to $100 a month" The cash payments go to the family, almost always the mother or other female head of the household. Parents can receive from $40 to $100 a month if they keep up with responsibilities such as taking their children to the doctor or keeping them in school. https://en.wikipedia.org/wiki/Opportunity_NYC https://en.wikipedia.org/wiki/Opportunity_NYC

wutbrodo 9y ago
Opportunity NYC was the previous program. The current one is called Family Rewards 2.0 > On average, the program cost $13,459 per family, 48 percent of which was paid directly to families as cash rewards. This was over a three year period, which means that each family received 13459*.48/3 = $2150, or about $180/mo. So they provided between 2-5x as much money. I share your confusion though, as this is still categorically a lot smaller than I would've expected. I guess it's less of a UBI type program and focuses more on cash rewards for good health and educational outcomes. For a low income family, $2k/yr is non-trivial.
- charlesdm 9y ago
  > 48 percent of which was paid directly to families as cash rewards. So where did the other 52% go to? Working costs of the program?
  - setgree 9y ago
    compliance and monitoring, most likely. The cash was conditioned on various attendance metrics, and the data collection process with such things is never as smooth as you'd like (I did a stint at a non-profit that ran experiments like this on behalf of economists).
    - r00fus 9y ago
      I wonder if it'd be more successful if that overhead were dropped to say 10-20% (via automation and simplification of qualifications)
      - wutbrodo 9y ago
        Why would it? The study said that they found no significant effect, not that the return was poor relative to costs. It's possible that shifting the saved administrative costs into more aid would appreciably change the outcome, but it seems more likely that it's a structural problem with the program: ie, that CCTs are optimizing the wrong input.
      - setgree 9y ago
        Regarding whether the effect would have been larger if the subjects got more cash -- in the original Progresa study, the ` size of the cash transfer is large, corresponding to about a 25 percent average increase in income of households living in extreme poverty' [0] (p.4). (Though in dollar amounts, if they are using the 'extreme poverty' metric of $1.25/day/person, we're talking about a lot less money in absolute terms). So there's something to this. But this is hard to square away with this newest study's findings of modest adverse impacts on labor participation rates. This, combined with null health effects, suggests that the CCTs are performing an income substitution effect, and that what people are doing with their newfound free-time is probably leisure rather than other forms of 'work' (i.e. exercising, cooking healthier meals, etc.) that policymakers might wish the subjects undertake. [0] https://www.povertyactionlab.org/sites/default/files/publications/449%20Progresa%20Health%20Gertler%202001.pdf https://www.povertyactionlab.org/sites/default/files/publica...
  - boomboomsubban 9y ago
    They also offered things to help people earn more rewards. The brief linked mentions short term tutoring, uniforms for your job, and transportation to interviews. Still seems like a lot of overhead though.
- brudgers 9y ago
  $2k a year without strings attached is non-trivial. Tying the money to activities that may come with direct or indirect costs may make earning the money non-rational. At the granularity of paychecks, it's less than $45 a week. That's about four hours overtime at minimum wage. Or four hours of part time work at $11/hour. The value proposition of extra work is pretty straight forward. There's no bureaucratic process that might deny payment. There's no dependency on a health care provider or school filling out the paperwork correctly in a timely manner and correctly where "correctly" means to the satisfaction of bureaucratic process structured to say "no."
  - wutbrodo 9y ago
    > $2k a year without strings attached is non-trivial. Tying the money to activities that may come with direct or indirect costs may make earning the money non-rational. At the granularity of paychecks, it's less than $45 a week. That's about four hours overtime at minimum wage. Or four hours of part time work at $11/hour. Sure, but we're talking about things that most people would agree is good anyway: kids doing well in school, being healthy, etc. The goal of the CCTs isn't to make people want to do things that they vehemently disagree with: it's to shift the incentive boundary so that they're on the right side of it for things they would like to do anyway.
  - evolve2k 9y ago
    I'm really surprised now that consideration of the 'quantum of funds' was not mentioned at all in the report, even as a footnote. On face value, I would argue that $45/week extra although appreciated is not significant. As a thought experiment it's in the scale of, 1hr week spend more time help kids with homework, 1hr spend additional time job searching, 1hr deal with program administrative/reporting requirements. If a family say rewards themselves with a night out once a week for a dinner or movies etc, these funds are quickly gone. I think the scale here implies an incentive based around addressing a lack of will e.g. "Well if they just had a little more encouragement they'd spend more time helping their kids with education and seeking employment and good health". At this scale it does not address what I'll call 'incentive based on providing significant additional means for positive risk taking behaviour and structural optimization'. I define structural behavior as when a family makes significant changes to their own setup towards have an effect; like moving closer to the school, hiring a tutor, pursuing course further studies part time (2-3 days a week). Although the research process seems robust I agree the low quantum of funds discounts the greater significance of the findings. TLDR; Summary of findings: 'When we gave poor familes enough weekly funds to go out for dinner once a week alongside a bunch of criteria to seek improvement in their life, it made little difference'
aantix 9y ago
I found that striking too. In this program they were provided "$13,459 per family, 48 percent of which was paid directly to families as cash rewards". While I'm sure it was nice to receive a _little_ extra money, that certainly isn't going to be life changing. It's more of a tease than anything.
- setgree 9y ago
  Going with the previous calculation of $180/month ($2160/year), that's about a 9% annual increase for a family of 4 at the poverty line (I'm seeing stats of ~24/year). One of the main ways in which redistribution programs are justified is by pointing out that a marginal dollar goes further for a poor person than a rich one. So I would hardly call this a "little" money, relative to baseline. Having said that, one of the key advantages of unconditional cash transfers is that with much lower compliance/monitoring costs, a much higher percentage of all funds can go directly to the poor. GiveDirectly provides an 'imperfect estimate' of 81%, for the record https://www.givewell.org/charities/give-directly#CashRatios https://www.givewell.org/charities/give-directly#CashRatios
  - kevmo 9y ago
    $2k/year isn't going to change anyone's life in America very much. 9% of a tiny amount is also a tiny amount.
    - toasterlovin 9y ago
      You can accomplish a lot with $166/month: - Mostly cover the cost of operating a car - Feed 2+ people (white rice is $34/month for 2400 calories/day; chicken is $60/month, whole milk is $80/month; mix and match to taste) While $2k/year isn't a whole lot of money, it's marginal. If you're living at the edge of what you can afford, even a 9% bump can put you in a much more comfortable place.
DanBC 9y ago
It's not much money. But for poor people $100 a month is the difference between eating or not eating some days, or having the heating on or going cold, or buying some books for the kids to read at home, or paying the bills on time vs paying them late. Also, about books: I don't know if there's something like this in the US, but it seems like a good idea: https://literacytrust.org.uk/support-us/help-child-fall-love-reading-valentines-day/ https://literacytrust.org.uk/support-us/help-child-fall-love...
- djsumdog 9y ago
  I mean..even then..not really. That's still not a lot of money at all. I grew up with people who live mouth to paycheck. A meaningful amount, like $400~$500 a month could make a much more considerable impact. $100/month means "Maybe we can take the kids to a movie one a month or have a nice dinner to help distract ourselves." $500/month could mean, "We can get all those extra school supplies or put our kids in extra school programs." Seeing if people would make those decisions would be an equally important study. These current programs see more designed to encourage people to use free programs with a small monitary incentive. I probably says more about those programs than the impact of the money itself.
  - Mindless2112 9y ago
    An expectation of "we'll use the money for important things after we treat ourselves" is exactly why people oppose these kind of programs. You can't just hand-wave that away.
    - iovrthoughtthis 9y ago
      It depends on your ability to conceive of a future without the suffering you're attempting to escape. If the money is not significant enough to meaningfully impact that assessment then a short term distraction is a rational way to spend the money. It's analogous but no the same as the prisoners dilemma with a known number of games.
jmull 9y ago
I think this is OK. As a test. A larger amount makes more sense in terms of being surer to have an impact. But it would make a widespread program based on those amounts so expensive that there’s probably no point in answering the question. Suppose it was found that giving poor families $20K annually did make a substantial difference? It probably wouldn’t matter because a large scale program based on that amount would probably never get funded. Here, the question is if we give poor families a small (but not insignificant) amount of cash could that make a diffeeence? I guess the idea is that it might provide just enough to enable at least some of them to do something they would really like to do anyway but can’t quite manage. Unfortunately, at least according to this, the answer is no. Perhaps we can think of it as a promising idea that didn’t pan out? IDK, it sure would be nice if we could find a relatively cheap and straightforward solution to wide-spread poverty and inequality. Not exactly surprising that we haven’t, but it still seems worth continuing to try.
- pavel_lishin 9y ago
  If we're never going to fund an amount that would make a difference, why bother doing small scale tests?
  - jmull 9y ago
    What I mean is, without doing these kinds of tests we don’t know what level will actually make a difference.

by jf 9y ago

wutbrodo 9y ago

Opportunity NYC was the previous program. The current one is called Family Rewards 2.0 > On average, the program cost $13,459 per family, 48 percent of which was paid directly to families as cash rewards. This was over a three year period, which means that each family received 13459*.48/3 = $2150, or about $180/mo. So they provided between 2-5x as much money. I share your confusion though, as this is still categorically a lot smaller than I would've expected. I guess it's less of a UBI type program and focuses more on cash rewards for good health and educational outcomes. For a low income family, $2k/yr is non-trivial.

charlesdm 9y ago
> 48 percent of which was paid directly to families as cash rewards. So where did the other 52% go to? Working costs of the program?
- setgree 9y ago
  compliance and monitoring, most likely. The cash was conditioned on various attendance metrics, and the data collection process with such things is never as smooth as you'd like (I did a stint at a non-profit that ran experiments like this on behalf of economists).
  - r00fus 9y ago
    I wonder if it'd be more successful if that overhead were dropped to say 10-20% (via automation and simplification of qualifications)
    - wutbrodo 9y ago
      Why would it? The study said that they found no significant effect, not that the return was poor relative to costs. It's possible that shifting the saved administrative costs into more aid would appreciably change the outcome, but it seems more likely that it's a structural problem with the program: ie, that CCTs are optimizing the wrong input.
    - setgree 9y ago
      Regarding whether the effect would have been larger if the subjects got more cash -- in the original Progresa study, the ` size of the cash transfer is large, corresponding to about a 25 percent average increase in income of households living in extreme poverty' [0] (p.4). (Though in dollar amounts, if they are using the 'extreme poverty' metric of $1.25/day/person, we're talking about a lot less money in absolute terms). So there's something to this. But this is hard to square away with this newest study's findings of modest adverse impacts on labor participation rates. This, combined with null health effects, suggests that the CCTs are performing an income substitution effect, and that what people are doing with their newfound free-time is probably leisure rather than other forms of 'work' (i.e. exercising, cooking healthier meals, etc.) that policymakers might wish the subjects undertake. [0] https://www.povertyactionlab.org/sites/default/files/publications/449%20Progresa%20Health%20Gertler%202001.pdf https://www.povertyactionlab.org/sites/default/files/publica...
- boomboomsubban 9y ago
  They also offered things to help people earn more rewards. The brief linked mentions short term tutoring, uniforms for your job, and transportation to interviews. Still seems like a lot of overhead though.
brudgers 9y ago
$2k a year without strings attached is non-trivial. Tying the money to activities that may come with direct or indirect costs may make earning the money non-rational. At the granularity of paychecks, it's less than $45 a week. That's about four hours overtime at minimum wage. Or four hours of part time work at $11/hour. The value proposition of extra work is pretty straight forward. There's no bureaucratic process that might deny payment. There's no dependency on a health care provider or school filling out the paperwork correctly in a timely manner and correctly where "correctly" means to the satisfaction of bureaucratic process structured to say "no."
- wutbrodo 9y ago
  > $2k a year without strings attached is non-trivial. Tying the money to activities that may come with direct or indirect costs may make earning the money non-rational. At the granularity of paychecks, it's less than $45 a week. That's about four hours overtime at minimum wage. Or four hours of part time work at $11/hour. Sure, but we're talking about things that most people would agree is good anyway: kids doing well in school, being healthy, etc. The goal of the CCTs isn't to make people want to do things that they vehemently disagree with: it's to shift the incentive boundary so that they're on the right side of it for things they would like to do anyway.
- evolve2k 9y ago
  I'm really surprised now that consideration of the 'quantum of funds' was not mentioned at all in the report, even as a footnote. On face value, I would argue that $45/week extra although appreciated is not significant. As a thought experiment it's in the scale of, 1hr week spend more time help kids with homework, 1hr spend additional time job searching, 1hr deal with program administrative/reporting requirements. If a family say rewards themselves with a night out once a week for a dinner or movies etc, these funds are quickly gone. I think the scale here implies an incentive based around addressing a lack of will e.g. "Well if they just had a little more encouragement they'd spend more time helping their kids with education and seeking employment and good health". At this scale it does not address what I'll call 'incentive based on providing significant additional means for positive risk taking behaviour and structural optimization'. I define structural behavior as when a family makes significant changes to their own setup towards have an effect; like moving closer to the school, hiring a tutor, pursuing course further studies part time (2-3 days a week). Although the research process seems robust I agree the low quantum of funds discounts the greater significance of the findings. TLDR; Summary of findings: 'When we gave poor familes enough weekly funds to go out for dinner once a week alongside a bunch of criteria to seek improvement in their life, it made little difference'

aantix 9y ago

I found that striking too. In this program they were provided "$13,459 per family, 48 percent of which was paid directly to families as cash rewards". While I'm sure it was nice to receive a _little_ extra money, that certainly isn't going to be life changing. It's more of a tease than anything.

setgree 9y ago
Going with the previous calculation of $180/month ($2160/year), that's about a 9% annual increase for a family of 4 at the poverty line (I'm seeing stats of ~24/year). One of the main ways in which redistribution programs are justified is by pointing out that a marginal dollar goes further for a poor person than a rich one. So I would hardly call this a "little" money, relative to baseline. Having said that, one of the key advantages of unconditional cash transfers is that with much lower compliance/monitoring costs, a much higher percentage of all funds can go directly to the poor. GiveDirectly provides an 'imperfect estimate' of 81%, for the record https://www.givewell.org/charities/give-directly#CashRatios https://www.givewell.org/charities/give-directly#CashRatios
- kevmo 9y ago
  $2k/year isn't going to change anyone's life in America very much. 9% of a tiny amount is also a tiny amount.
  - toasterlovin 9y ago
    You can accomplish a lot with $166/month: - Mostly cover the cost of operating a car - Feed 2+ people (white rice is $34/month for 2400 calories/day; chicken is $60/month, whole milk is $80/month; mix and match to taste) While $2k/year isn't a whole lot of money, it's marginal. If you're living at the edge of what you can afford, even a 9% bump can put you in a much more comfortable place.

DanBC 9y ago

It's not much money. But for poor people $100 a month is the difference between eating or not eating some days, or having the heating on or going cold, or buying some books for the kids to read at home, or paying the bills on time vs paying them late. Also, about books: I don't know if there's something like this in the US, but it seems like a good idea: https://literacytrust.org.uk/support-us/help-child-fall-love-reading-valentines-day/ https://literacytrust.org.uk/support-us/help-child-fall-love...

djsumdog 9y ago
I mean..even then..not really. That's still not a lot of money at all. I grew up with people who live mouth to paycheck. A meaningful amount, like $400~$500 a month could make a much more considerable impact. $100/month means "Maybe we can take the kids to a movie one a month or have a nice dinner to help distract ourselves." $500/month could mean, "We can get all those extra school supplies or put our kids in extra school programs." Seeing if people would make those decisions would be an equally important study. These current programs see more designed to encourage people to use free programs with a small monitary incentive. I probably says more about those programs than the impact of the money itself.
- Mindless2112 9y ago
  An expectation of "we'll use the money for important things after we treat ourselves" is exactly why people oppose these kind of programs. You can't just hand-wave that away.
  - iovrthoughtthis 9y ago
    It depends on your ability to conceive of a future without the suffering you're attempting to escape. If the money is not significant enough to meaningfully impact that assessment then a short term distraction is a rational way to spend the money. It's analogous but no the same as the prisoners dilemma with a known number of games.

jmull 9y ago

I think this is OK. As a test. A larger amount makes more sense in terms of being surer to have an impact. But it would make a widespread program based on those amounts so expensive that there’s probably no point in answering the question. Suppose it was found that giving poor families $20K annually did make a substantial difference? It probably wouldn’t matter because a large scale program based on that amount would probably never get funded. Here, the question is if we give poor families a small (but not insignificant) amount of cash could that make a diffeeence? I guess the idea is that it might provide just enough to enable at least some of them to do something they would really like to do anyway but can’t quite manage. Unfortunately, at least according to this, the answer is no. Perhaps we can think of it as a promising idea that didn’t pan out? IDK, it sure would be nice if we could find a relatively cheap and straightforward solution to wide-spread poverty and inequality. Not exactly surprising that we haven’t, but it still seems worth continuing to try.

pavel_lishin 9y ago
If we're never going to fund an amount that would make a difference, why bother doing small scale tests?
- jmull 9y ago
  What I mean is, without doing these kinds of tests we don’t know what level will actually make a difference.