Pay-As-You-Go Youth Work

San Francisco—On the last day of a month-long summer program in life skills, 14-year-old Shedrick Milton left the cozy office of the San Francisco Independent Living Skills Program with a couple of gift cards, some cookbooks and what amounts to money in the bank.

Shedrick, who is in foster care, can take more skill-building classes during his leisure hours throughout the school year, earning more gift cards and credits toward a stipend that could reach $2,500 by the time he graduates from the program in four years.

He is among thousands of youth around the country who receive financial or material rewards for taking part in youth development activities. Agencies use such incentives to motivate youth to avoid pregnancy, do their homework, stay in school, master life skills, train for jobs, save money, and serve on boards and advisory councils.

Until last year, a retired Nashville couple was paying $10 to every child who memorized the Ten Commandments. Twenty thousand children claimed the reward before the money ran out.

While the concept seems to be gaining popularity, only a handful of incentive-using youth programs have been evaluated. And because researchers have rarely separated the impact of the incentives from other program components, both proponents and opponents of the practice can cite findings to support their views.

In a paper that was widely distributed last year, respected researchers Robert J. Ivry and Fred Doolittle of MDRC, a nonprofit social research organization, argued that three decades of research prove that financial incentives solve the biggest problem most youth programs face – “namely, maintaining high levels of engagement, participation, and retention.”

Ivry and Doolittle urged youth-serving agencies to make greater use of “participation bargains” that reward at-risk youth for acquiring specific competencies or achieving self-improvement benchmarks, such as abstaining from alcohol or drugs, earning academic credentials or completing training.

But some studies of specific programs suggest proceeding with caution. A study of a Canadian job training program for school dropouts found that incentives drew many youth who just wanted the money. A study of a short-lived pregnancy prevention program in Denver called Dollar-a-Day, based at a hospital, found that incentives got girls to show up, but did not reduce repeat pregnancies. And one evaluation of Quantum Opportunities Program (QOP) for youth at risk of dropping out of school found that incentives lost their effectiveness over the long term.

While cash incentives are commonplace at independent living programs for foster youth, some program administrators think the practice has gone too far and have switched to providing goods, such as movie passes or household items. (See story, page 30.)

Researchers at the Harvard Family Research Project recently reviewed studies on incentives in youth programs and concluded that they “deserve greater attention as a strategy for improving youth’s out-of-school-time program participation.” The researchers stopped short of endorsing incentives.

“It does appear that it may make a difference in getting teens to participate in programs if you offer them incentives, but there is no research evidence to support this – only common sense,” says Priscilla Little, the Harvard project’s associate director.

Before integrating incentives into their programs, youth-serving agencies might want to consider the following questions:

Do incentives get youth to come? Arlene Hylton sees incentives working every day in the independent living program she runs for youth in San Francisco’s foster care system. Incentives attract youth who would otherwise be reluctant to spend their leisure time in activities that adults think are good for them. “And once we get them here, they’re hooked,” she says.

The research validates Hylton’s observations. The most recent evaluation of QOP – by Mathematica Policy Research – concluded that the hourly stipends “induced newly enrolled youth to attend program activities.”

Incentives were also found to lure participants to Integrated Training Centres for Youth, a Canadian job-training program, as well as to the hospital-based pregnancy prevention program, Dollar-a-Day.

Do incentives keep youth coming?

Whether youth keep coming for the incentives or because they’ve gotten hooked is hard to determine.

For 10 years, Planned Parenthood of the Rocky Mountains has been attracting girls to its pregnancy prevention program in Denver with a $1-a-day payment for avoiding pregnancy. (This is different from the Dollar-a-Day effort that was run by a hospital.) After a dozen or so sessions, “The kids seem to forget about the money,” observes Krista Anderson, the agency’s vice president of education and training. “Sometimes they even leave without asking for it. What becomes the primary focus is really the knowledge and skills and the relationships they’re getting from the program.”

Two studies of QOP sites provide somewhat contradictory answers to the question of whether incentives keep youth coming. A study of the QOP pilot project, by researchers at Brandeis University, concluded that “financial incentives can be effective in maintaining student interest in and attendance at program events.”

But a later study of the QOP demonstration project, by Mathematica, concluded that the incentives became less of a lure over time. Responding to that finding, plus observations from staff and participants, the Eisenhower Foundation last year increased the incentives to $1.25 or $1.40 an hour (from $1) at the six sites where it is replicating QOP. The foundation expects the higher payment to make the program more attractive to older youth, those whom the Mathematica researchers found most likely to stop participating.

Incentives were found by researchers to be important to maintaining participation in the Canadian job-training program, Integrated Training Centres. At one site, 37 percent of participants told evaluators they would have quit without the incentives.

Even with the incentives, however, the drop-out rate was high – between 22 percent and 37 percent, depending on the site. The evaluators attributed that primarily to an inadequate screening program. They concluded that attracting youth who are “there ‘just for the money …’ is to some extent unavoidable, but it further demonstrates the difficulty the agencies face in having incentives work in the way they were intended.”

At the San Francisco Independent Living Skills Program, Hylton changed her incentives several years ago, partly to keep youth coming back. The program used to pay youth $50 quarterly to attend life skills classes. Now, it combines immediate rewards, such as gift cards to stores like Old Navy, Target and T.J. Maxx, with the prospect of a longer-term payoff: the graduation stipend, which rises with the amount of effort a youth puts into preparing for independence from foster care.

“We keep telling them, ‘the more you participate, the bigger your check will be,’” Hylton says.

One of Hylton’s students, Cassandra Mitchell, 18, admits that it was the promise of a reward at the end that got her to keep coming to financial literacy workshops last summer, even though she didn’t always find them interesting.

When she completed the six classes, she received a check for $100, plus an Individual Development Account that will match her savings for education or housing by a ratio of 3 to 1. Mitchell promptly deposited $500 from her summer earnings. When she saves $500 more, she’ll be able to withdraw $3,000 to pay for her education or housing expenses at the University of the Pacific, where she is a freshman.

Do they help change youth behavior?

Sometimes yes, sometimes no. Usually, it’s hard to tell. The key to behavior change seems to be the soundness of the program.

The Carrera Adolescent Pregnancy Prevention Program, operated by the Children’s Aid Society of New York, reports a host of statistically significant positive outcomes among its participants, including lower pregnancy and birth rates. The program includes stipends for employment-preparation activities.

Dr. Michael A. Carrera, the program’s director, believes that it’s the overall quality of the program that’s important, not the incentives. He prefers to think of the stipends as compensation for “substantive participation,” rather than as incentives.

“The ‘incentive’ word is tied in my mind to someone saying, ‘If you take the SAT tutoring, I’ll buy you that pair of shoes you want,’ “ he says. “What I want to tie it to is something that is active and substantial and starts to teach them the equation that we’ve all learned, which is that when you get something done, you meet a deadline, you honor your obligations, you get your compensation.”

Planned Parenthood claims positive behavior results from its Dollar-a-Day Program, which serves mostly Latina girls between 14 and 18. In each of the past 12 years, fewer than 10 percent of participants have gotten pregnant, Anderson says. (In comparison, the Alan Guttmacher Institute reports that about 15 percent of 15- to 19- year-old Hispanic girls in Colorado became pregnant in 2000.)

Finally, both QOP evaluations demonstrated that participation in the incentive-using program increased the likelihood of graduating from high school and enrolling in post-secondary school or training. Was it because of the incentives or the programming? The evaluators concluded that incentives “do not appear to operate effectively in the absence of a strong program featuring much personal contact with staff.”

For whom do incentives work best?

Ivry and Doolittle of the MRDC suggest that incentives may be most effective with youth who do not care about conventional rewards. “Young people who are outside the mainstream may not be motivated solely by pragmatic goals like attaining an education credential, learning new skills related to employment, or even getting a job,” their report notes.

Especially for older youth, they argue, offering financial incentives for participation in self-betterment activities is important because of competition from other pursuits. “Given the economic realities faced by at-risk youth, it is difficult for human capital development programs to compete with the secondary labor market and the underground economy,” they say.

Larkin Street Youth Services works with the youth Ivry and Doolittle are talking about: homeless kids and runaways in San Francisco. “These are the hardest-to-serve young people, those who have been through multiple programs,” says Sam Cobbs, director of program services. “They’re sleeping on the street and wondering where their next meal is coming from.”
Incentives are crucial for getting these youth “to do what they need to to get off the street,” Cobbs says.

While younger youth respond well to incentives like blank CDs, phone cards or clothing vouchers, older youth and young adults prefer cash, Cobbs says. “Providing cash incentives is our attempt to set up our own economic system in-house, versus them going out on the streets and doing things to get money some other way,” Cobbs says. “They’re willing to sit in on a focus group or take a survey for $20 to put in their pocket.”

The Eisenhower Foundation also regards incentives as an important part of the success of the QOP model, which targets highly disadvantaged youth. “It would surprise you to see how those kids treat those stipend checks,” says Johnnie Gage, the foundation’s chief operating officer. “It’s huge to them. They know what they had to do to earn it, and the check demonstrates to them the connection between effort and reward. Most of the world is like that. And for the first time, they get it.”

Incentives have also been shown to be effective with another historically hard-to-motivate group: the pregnant and parenting welfare-dependent teenagers targeted by Ohio’s Learning, Earning and Parenting (LEAP) program. An evaluation found that participation in LEAP increased school completion by almost 20 percent and employment by 40 percent for teens who enrolled while still in school. At the suggestion of the MDRC evaluators, the state increased the incentives, adding a grade completion bonus of $62 and a graduation bonus of $200.

Where’s the money?

Probably the greatest barrier to increasing the use of incentives is finding the money. Except for independent living programs, which are financed largely with highly flexible federal funds, many youth-serving programs are hampered by restrictions on spending.

“Some of our programs aren’t in the position to give out as much,” Gage says of the Eisenhower Foundation’s QOP sites. “They’ve had to develop community resources to be able to give out bonuses. “

Ivry and Doolittle of MRDC argue that the public is likely to support incentives in youth programs as long as it believes it’s getting something in return. As the nation’s experience with welfare reform has shown, they argue, “The public generally approves of helping low-income people who are working hard to improve their lives. The public is therefore likely to respond favorably to policies that help young people who help themselves and who avoid risk-taking behaviors.”

But the Harvard researchers caution that, given the cost, “it may be worthwhile to evaluate this strategy as an enhancement to an existing program prior to implementing it on a larger scale.”

In addition to finding more money, providing such incentives also requires overcoming the skepticism of critics. “Incentives are likely to be not just ineffective but positively counterproductive in youth development programs, just as they’ve been shown to be in schools, families and work places,” says motivational expert Alfie Kohn, author of Punished by Rewards.

“The trouble is that there are actually two very different forms of motivation: intrinsic, which means doing something for its own sake, and extrinsic, which means doing something to get a reward,” Kohn argues. “As extrinsic motivation goes up, intrinsic motivation – the kind we care about – tends to go down. This is one of the most frequently replicated findings in all of social psychology: The more you reward people for doing something, the more they tend to lose interest in whatever they had to do to get the reward.”

Maybe so, maybe not. After all, many people are intrinsically and extrinsically motivated at the same time.

Besides, some program directors say they use incentives not just because they work, but because it’s the right thing to do. Hylton views incentives primarily as a way of “honoring participation.”

Cobbs, of Larkin Street, seconds that notion. “In our everyday lives, we have incentives,” he notes. “Why shouldn’t these young people, at least until they get to the point where there are natural incentives?”

Anderson, of Planned Parenthood, says the real value of paying girls a dollar a day not to get pregnant may be in its symbolism. “A lot of these kids are not your star athletes or your star students,” she says. “They really don’t get a lot of positive rewards for positive behavior.

“The weekly stipend says to them, ‘Here’s $7 because you’re doing a really great job to improve yourself. Each day you’re working really hard to do the right things [you] need to do to remain healthy.’ “

Even if youth do participate in a program for extrinsic reasons, as Kohn suggests happens with incentives, they do get exposed to information that can aid their development.

Consider Cassandra Mitchell, the San Francisco girl who put her summer earnings into an Individual development Account. Mitchell says she probably would have saved her earnings even without the 3-to-1 match that she got through the IDA. “Since I grew up in a homeless family, it’s important to me to have money,” she says. “I’m always saving for a rainy day.”

But to get the promised match, she had to sit through hours of financial literacy training. Ultimately, that’s likely to help her manage her finances better.

Shedrick Milton is also both extrinsically and intrinsically motivated. “The gifts are good,” Shedrick says of the rewards he got for taking life skills classes. “I’d be lying if I didn’t say so. But they’re not why I come. I come because I know I’m going to be on my own when I turn 18, and these are things I need to know.”

The Research Says …

Only a handful of incentive-using youth programs have been evaluated. Here are summaries of the main studies:

Children’s Aid Society Carrera Adolescent Pregnancy Prevention Program: For a random assignment research study published in 2001, Philiber Research Associates followed 300 teens from the program, plus another 300 in a control group. It found a host of statistically significant positive outcomes among Carrera participants, including lower pregnancy and birth rates.

The Carrera program is a seven-pronged youth development approach to pregnancy prevention that has been replicated at more than 20 sites around the country. Younger teens receive $3 per hour and older teens get the minimum wage for participating in employment, career awareness and savings activities. Participants receive other services – including educational assessments, tutoring, homework help, PSAT and SAT preparation, assistance with college applications, sex and family life education, and instruction in arts and athletics – for which no stipends are paid.

The researchers attributed the program’s success to its comprehensive nature, rather than a single component. A summary of the research is available at

Quantum Opportunities Program (QOP): Brandeis University researchers conducted a random assignment study of 200 youth in four cities where the Ford Foundation funded a pilot program from 1996 to 2000. QOP provided case management, mentoring, supplemental after-school education, developmental activities, community service, supportive services and financial incentives over four years to youth at risk of dropping out of school. Participants received an hourly stipend for program activities, plus a $100 bonus after 100 hours and an end-of-program bonus that matched their earnings from the incentives.

The study found that participation in QOP had positive effects on school completion, college enrollment and pregnancy prevention. But the researchers concluded that financial incentives “were not the decisive factor in QOP participation.”

“When they are part of a comprehensive, well-developed program, financial incentives can be effective in maintaining student interest in and attendance at program events,” the researchers concluded. “However, they do not appear to operate effectively in the absence of a strong program featuring much personal contact with staff.”

A second study of QOP, led by Mathematica Policy Research, looked at a demonstration project involving 550 youth in seven cities from 1995 through 2001, and an equal number assigned to a statistically equivalent control group.

Researchers found that participation in QOP increased the likelihood of completing high school and enrolling in post-secondary education or training, but had no effect on academic performance or risky behaviors. They concluded that the hourly stipends “induced newly enrolled youth to attend program activities,” but lost their effectiveness over time.

The research is available at and at

Learning, Earning and Parenting Program (LEAP): This is a statewide program in Ohio that combines financial incentives and penalties with case management and support services to induce pregnant and parenting teens on welfare to remain in school. A teen receives a welfare bonus of $62 for school enrollment and $62 a month for regular school attendance. A teen who fails to attend school loses $62 from her monthly grant.

A random assignment study by MDRC, published in 1997, found that LEAP significantly increased school enrollment and attendance for both in-school teens and dropouts, and improved school progress (completion of 9th, 10th and 11th grades), though not graduation rates.

A report on the research is available at

Integrated Training Centres for Youth: This was a pilot project operated in Canada in the mid-1990s by Human Resources Development Canada, which provided financial incentives to encourage 16- to 20-year-old school dropouts to attend job training programs. Each participant received a daily “training allowance” of $5 to $33 (Canadian), or a maximum of $4,500 over eight months.

A 1997 evaluation by the Alberta Management Group concluded that most clients gained useful work experience, occupational skills, and job-finding and life skills, but that the program was not as successful in imparting academic skills and a career plan. The financial incentives were considered to be “instrumental in attracting many clients to the training,” though the researchers reported that “some youth attended ‘just for the money’ and were never strongly committed to employment.”

The research is available at

Dollar-a-Day Program: This program, run out of a hospital in Denver for two years in the early 1990s, sought to determine whether paying new teen mothers $1 a day kept them from getting pregnant again.

In a randomized control trial, researchers at the University of Colorado Health Sciences Center divided 286 teen mothers into four intervention groups: those who received only a monetary incentive; those who participated only in a peer-support group; those who both received the monetary incentive and participated in a peer-support group; and a control group.

The study found that monetary incentives increased peer-support group participation, but did not reduce repeat pregnancies. Twenty-nine months after entering the program, 39 percent of the participants had become pregnant again, regardless of which group they were in.

The program was different in content and goal from the program of the same name operated by Planned Parenthood of the Rocky Mountains, which uses financial incentives and claims success in preventing first pregnancies.

A summary of the research is available at

Improving the Economic and Life Outcomes of At-Risk Youth: This MDRC paper that urges youth-serving agencies to make greater use of “participation bargains” that reward at-risk youths for acquiring specific competencies or for achieving self-improvement benchmarks. The report is available at

Cash or Alarm Clocks ?

Nowhere is the use of incentives more entrenched than in programs that serve older youth in foster care. But some program administrators think paying cash is the wrong thing to do, and have switched to using goods or some form of purchasing credits.

“I’ve been in the IL [independent living] field for 15 years, and incentives have always been part of it,” says Chris Steele, who until August was independent living program manager for the California Community College Foundation.

“Youth this age think they know everything, and they don’t do anything they don’t want to do. We use incentives to capture their attention and get them there. Usually, once they come, they’re sold on the class,” Steele says.

Robin Nixon, director of the National Foster Care Coalition, believes that providing incentives in IL programs is rooted in a desire to “give kids a protected opportunity to learn to manage money themselves.”

“Many kids in foster care don’t have the opportunity to go out and get a job,” she notes. “Paying them to attend an IL class is a way of putting money in their pockets, but tying it to an activity, so they feel as though they’re earning it. And hopefully the messages they’re getting in the class sink in.”

Whether they do or not is an open question. The U.S. General Accounting Office reported in 1999 that nearly half the states provided financial incentives to youth to participate in life skills training, but that little was known about what strategies improved a youth’s likelihood for success.

People in the field say financial and material incentives have become even more widely used since the enactment in 1999 of the Foster Care Independence Act, which provides states with flexible funds to prepare youth in foster care for independence.

Money vs. Movie Passes

In California, home to almost one-quarter of all the foster children in the United States, each county designs its own IL program.

When Judy Osterhage took over the independent living program in Santa Barbara County seven years ago, she says, “They were giving the kids money for just about everything. If they filled out paperwork for school, they got money. If they memorized their Social Security number, they got money. There was a list of probably 20 things that they got cash rewards for.”

“To me that was ridiculous. These were things that you were supposed to do as part of growing up.”

Now the agency uses its $6,000 for incentives each year to give youths items such as gift cards, phone cards, movie passes or gift certificates to fast food outlets, Osterhage says.

During an annual program called Job City USA, the rewards are tied to the mastery of particular skills. “When they learn how to iron a shirt, they get an iron,” she said. “When they finish sewing on a button, they get a sewing kit. And when they master how to set an alarm clock, I give them one. We do this at the end of the year, as they’re about to leave care, so they have all types of things to start a household with.”

Kathy Lovelace, who runs the independent living program for Butte County, also disapproves of cash incentives. “I was a foster parent myself for 23 years, back when the county was giving them money, and it always disturbed me, because it just disappeared,” she says. With an annual budget of $20,000 for incentives, she has devised a system that rewards youth with credits that they can use to purchase material goods.

“My kids can earn up to $15 a week for participating in a two-hour IL class, if they meet the expectations of the class, including behavior,” she says. “They have to deposit their ‘paycheck’ in their account and keep track of how much they’re saving, just like they would with real money.”

Youth can use the credits to buy sheets, blankets, towels or toasters from the agency’s “store.”
“I was told the kids wouldn’t like it, but I find that they do,” Lovelace says. “I’ve had kids over the years end up with full households of belongings.”

Krista Anderson, vice president of education and training
Planned Parenthood of the Rocky Mountains
Denver, Colo.
(303) 321-7526,

Dr. Michael A. Carrera, director
Carrera Adolescent Pregnancy Prevention Program
New York, N.Y.
(212) 949-4800,

Sam Cobbs, director of program services
Larkin Street Youth Services
San Francisco, Calif.
(415) 673-0911,

Arlene Hylton, program coordinator
San Francisco Independent Living Skills Program
San Francisco, Calif.
(415) 934-4200

New York, N.Y.
(212) 532-3200,  


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