Citation
Bos, J., Huston, A., Granger, R., Duncan, G., Brock, T., & McLoyd, V. (1999). New Hope for people with low incomes: Two-year results of a program to reduce poverty and reform welfare. New York: MDRC.
Highlights
- The study’s objective was to examine the impact of the New Hope program on employment, earnings, public benefits receipt, and educational attainment.
- The authors estimated the impact of the New Hope program by comparing average outcomes among a treatment group randomly selected to have access to the program with those of a randomly selected control group that did not have access to the program.
- The study found that receiving access to New Hope services increased average earnings in the first year of the program by $583 and the average likelihood of ever being employed in the first and second year of the program by 7.8 percentage points and 5.5 percentage points, respectively.
- The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the New Hope program, and not to other factors.
Intervention Examined
The New Hope Program
Features of the Intervention
The New Hope demonstration was designed to increase total income to the poverty threshold by providing monthly earnings supplements to participants who worked at least 30 hours per week. Participants also received low-cost health insurance (58 percent of participants) if their employers did not provide it. In addition, parents with children younger than 13 received child care subsidies. Participants who were unable to find full-time employment were placed in full- or part-time subsized community service jobs with local nonprofit organizations, with a requirement for consistent attendance and job performance. Each community service job lasted up to 6 months, and participants could hold community service jobs for up to 12 total months.
Features of the Study
The study was conducted in two low-income areas in Milwaukee, Wisconsin. Potential participants were recruited for an orientation session, during which they learned about the New Hope program and the random assignment study. They were randomly assigned after completing a questionnaire on their background characteristics. From August 1994 to December 1995, 1,362 New Hope applicants were randomly assigned to New Hope (678) or a control group (679). The authors estimated the impact of the New Hope program by comparing average outcomes among the treatment group to those among the control group.
Findings
- The study found that receiving access to New Hope services increased average earnings in the first year of the program by $583.
- The study also found that receiving access to New Hope services increased the average likelihood of ever being employed in the first and second year of the program by 7.8 percentage points and 5.5 percentage points, respectively.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the New Hope program, and not to other factors.