Income distribution effects of the Nurse Family Partnership

Chapter 8 of Investing in Kids also estimates the effects on different groups of “full-scale” implementation of the Nurse Family Partnership program. The NFP provides nurse home visitation services to first time mothers, from disadvantaged families, during the pre-natal period until age 2.

NFP has been studied by several random assignment experiments, so we have rigorous evidence on its effects on the participant mothers and children. These experiments establish that the program is much more effective for disadvantaged families. The experiments also establish that the program works better if the services are delivered by nurses rather than delivered by staff with lower professional credentials (and lower pay).

I studied the income distribution effects of a “full-scale” NFP. Full-scale means that the program can serve all first-time disadvantaged mothers. This includes roughly 9% of all children.

A full-scale NFP has economic development benefits for state economies that significantly exceed costs. The ratio of state economic development benefits to costs is about two.

However, the net earnings benefits for the lowest income quintile are modest. Earnings for the lowest income quintile would increase by less than 3% of income. This is less than one-half of the earnings benefits for the lowest income quintile from universal preschool, and less than one-tenth of the earnings benefits for the lowest income quintile from the Abecedarian program.

The NFP’s benefits are limited in part because, by design, it only serves a particular segment of the low income population. In addition, the hours of service per participant household are more limited than for preschool or full-time child care.

On the other hand, the NFP’s costs are more modest.  Even at full-scale, the program’s annual costs are less than $4 billion for the entire U.S.  The program has costs for the upper 80% of the income distribution, but these costs are modest. The average cost of the taxes to pay for the program amount to one-20th of 1% of income, or one part in 2000 of income.

Therefore, even though the NFP program is highly redistributional, with its earnings benefits focused on low income households, it is perhaps politically feasible due to its modest costs. But its modest costs may also limit the size of NFP’s benefits.

Of course, it should be noted that the NFP is not really intended to have large “macro” effects on the income distribution by itself. NFP just provides one kind of valuable service for a segment of the low income population. It is unreasonable to expect it to have large income distributional effects.  NFP when combined  with many other effective anti-poverty programs might have large effects on the income distribution.

About timbartik

Tim Bartik is a senior economist at the Upjohn Institute for Employment Research, a non-profit and non-partisan research organization in Kalamazoo, Michigan. His research specializes in state and local economic development policies and local labor markets.
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