Incentivizing People Out of Poverty

"Incentive-based programs have sprung up in recent years in large part because they are more politically palatable than traditional welfare benefits, and because advocates say such programs offer a better chance of changing some of the behaviors tied up with poverty. But incentives aren't safety nets. And even if they work for specific tasks, it's not clear whether they are enough to prompt meaningful long-term changes in those most firmly entrenched in poverty."

One example, a year and a half old Chicago program called "Pathways to Rewards" has already awarded nearly $19,000 in prizes to about 130 people. "At one rewards banquet, more than 150 people gathered in a church basement to celebrate and cash in points for prizes. Devant-e and Ireyonna Brown, 10 and 7 years old, rode off on new bicycles with points earned for school attendance and volunteer work. Their mother, Marilyn, walked away with a DVD player, thanks to points earned mostly for attending PTA meetings. Others received certificates good for food, clothing and school supplies."

[Editor's note: Although this article is only available to WSJ subscribers, it is available to Planetizen readers for free through the link below for a period of seven days.]