NCPA - National Center for Policy Analysis

The Case for Conditional Cash Transfers

June 19, 2015

Programs in several countries providing conditional cash transfers to low-income individuals and families are focused on improving the education and general well-being of children. The conditions parents must meet range from general health check-ups to school attendance and performance requirements. Though cash transfer programs are popular and successful internationally, particularly in developing countries, Americans have paid very little attention to their potential benefits.

Two notable Conditional Cash Transfers programs have run in the United States: Opportunity NYC and Memphis, Tennessee's "Family Rewards 2.0." While the Memphis program is still too new to fully evaluate, students who participated in Opportunity NYC saw significant educational gains.

Compared to students who were not proficient on their eighth grade English Language Arts exams, Opportunity NYC students were:

  • Eight percent more likely to graduate within four years;
  • Over 9 percent more likely to pass at least five of New York's State Regent Exams; and,
  • Nearly 10 percent more likely to earn the credits needed to graduate high school.

Education comes with its own rewards, but for many students in low-income areas that simply is not enough. Providing incentives to stay ― and succeed ― in school through the use of conditional cash transfer programs would bring free-market principles into the education sector in a new way. Combining CCTs with Education Savings Accounts could be the key to ensuring the benefits outlast the programs themselves.

Source: Megan Simons, "The Case for Conditional Cash Transfers in the United States," National Center for Policy Analysis, June 18, 2015. 

 

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