Key Takeaways
- The results of the Padua study show the program significantly improved labor market outcomes. Specifically, those assigned to the treatment group experienced a 25% increase in full-time employment as compared to those assigned to the control group, and this effect continued two years after their enrollment.
- Padua was particularly effective for those who were not employed at enrollment. For this group, the intervention led to a 67% increase in the probability of working full-time and a 46% increase in monthly earnings.
- Those who lacked stable housing before enrolling saw a 64% increase in housing stability over the control group.
- Padua also increased the likelihood of reported improvements in personal health by 53%.
- There is little evidence that Padua increased savings.
Mechanics
The Padua program, designed by Catholic Charities Fort Worth, aims to move clients permanently out of poverty by providing them with intensive, wrap-around case management services.
To evaluate the impact of Padua on labor market and other outcomes, LEO researchers designed a randomized controlled trial. Eligible clients were enrolled into the program over a two-year period, from 2015-2016. The study includes 427 participants, 193 of which were randomly assigned to the treatment group and offered the Padua program. The remaining 234 individuals were assigned to the control group and offered the usual services provided by Catholic Charities Fort Worth. Only 40% of the study’s participants were employed upon their enrollment into the study, and their family income placed them at about two-thirds of the federal poverty line.
All 427 participants completed an extensive baseline survey after enrolling into the study. Additional in-person surveys were administered at 12 months and again at 24 months following clients’ initial enrollment. Using a small monetary incentive, the surveyors were able to obtain an 82% response rate for the 12-month follow-up survey and an 81% response rate for the 24-month follow-up survey. By comparing outcomes for the treatment and control group in the 12- and 24-month follow-up surveys, researchers gained important insights into the impact of the Padua program on moving participants out of poverty.
What We Learned
The results of the Padua study suggest the program improved labor market outcomes for those in the treatment group as evidenced by a greater likelihood of employment and increased hours for those working. Specifically, the intervention led to a 25% increase in full-time employment, an effect that continued even two years after enrollment. The treatment group also showed some health gain—they were 53% more likely to report improved health two years after enrollment. They were also 14% more likely to use a budget to aid their financial planning. However, there was little evidence that the intervention led to increased savings.
The study also revealed important differences in program impacts for certain subgroups. For example, the program’s impact on labor market outcomes was the greatest for individuals who were not employed at the start of the study. For this group, the intervention led to a 67% increase in the probability of working full-time and a 46% increase in their monthly earnings. In other words, Padua appears to be more effective at improving labor market outcomes for those who are initially out of work than for those who are initially working but in need of more hours or greater pay.
Padua also appears to be particularly effective for those who had stable housing (i.e. renters and homeowners) at the start of the study. For this subgroup, the intervention led to a 34% increase in earnings, a 37% increase in the likelihood of working full-time, and a 19% decrease in the use of government benefits. For those who lacked stable housing (i.e. people experiencing homelessness or living with family or friends) at the start of the study, in contrast, the intervention did little to improve labor market outcomes. It did, however, lead to a 64% increase in stable housing. This finding is consistent with the idea that the services Padua provided, and therefore the outcomes it affected, depended on one's presenting needs. If clients were in need of stable housing, case managers worked to address that issue before working on ways to improve labor market outcomes.
Because of the intensity of its services, the Padua program is relatively expensive to operate—one case costs roughly $11,000 to manage each year. Still, a cost-benefit analysis suggests that participants’ earnings gains cover the cost of the program in just eight years. For participants who were unemployed when they first enrolled, it takes only 4.5 years for their earnings to surpass the cost of the program.
Where We’re Going
A number of important research questions emerge from the study’s results. For example, the researchers plan to continue to track outcomes for these study participants to better understand the long-run impacts of this intervention, such as whether the employment and earnings gains are sustained over many years and whether we eventually see less use of government programs as a result of the intervention.
To further explore the impact of Padua, LEO researchers are partnering with Catholic Charities Fort Worth to launch an expansion of the study. The expansion will include 700 participants, enrolled between 2018 and 2021. Researchers are specifically interested in connecting participants’ data with credit records and public benefits data to gain a clearer picture of the effect of the intervention on debt and reliance on government assistance. With more research, we’ll be one step closer to understanding what works to move people out of poverty for good.
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