Individual development accounts (IDAs) have been adopted in communities across the country as a way of helping lower-income individuals accrue financial assets. These programs match the savings of program participants if they invest them in the purchase of a home, the creation or expansion of a business, or additional education. Beyond the financial benefits of holding assets, scholars have argued that they should also result in psychological benefits such as enhanced future orientations and decreased depression. This study tests this argument with data from a randomized controlled experiment involving 1,103 applicants to an IDA program. The findings show that assignment to the IDA program was not associated with either future orientation or depression 10 years later. The value of assets held at that time, however, was found to be negatively associated with depression. In addition, self-reported financial stress was found to be negatively associated with future orientation and positively associated with depression.

We provide new large-scale experimental evidence on policies that aim to boost household saving out of income tax refunds. Households that filed income tax returns with an online tax preparer and chose to receive their refund electronically were randomized into eight treatment groups, which received different combinations of motivational saving prompts and suggested shares of the refund to save25% and 75%and a control group, which received neither. In treatment conditions where they were presented, motivational prompts focused on various savings goals: general, retirement, or emergency. Analysis reveals that higher suggested that allocations generated increased allocations of the refund to savings but that prompts for different reasons to save did not. These interventions, which draw on lessons from behavioral economics, represent potentially low-cost, scalable tools for policy makers interested in helping low- and moderate-income households build savings.

Objective: A lack of emergency savings renders low-income households vulnerable to material hardships resulting from unexpected expenses or loss of income. Having emergency savings helps these households respond to unexpected events, maintain consumption, and avoid high-cost credit products. Because many low-income households receive sizable federal tax refunds, tax time is an opportunity for these households to allocate a portion of refunds to savings. We hypothesized that low-income tax filers who deposit at least part of their tax refunds into a savings account will experience less material and health care hardship compared to non-depositors. Method: Using data from a household financial survey of a large-scale tax-time savings initiative, we examined the effects of saving tax refunds on material and health care hardship outcomes 6 months after filing taxes among a sample of low-income filers (n = 7,537). We used propensity score analysis to adjust for self-selection bias. Results: Six months after filing taxes, depositors have statistically significant better outcomes than non-depositors for five of six hardship outcomes. Also, Black filers have statistically significant worse outcomes than White filers for half of hardship indicators. Conclusions: Findings affirm the importance of saving refunds at tax time as a way to lower the likelihood of experiencing various hardships. Findings concerning race suggest that Black households face greater hardship risks than White households, reflecting broader patterns of social inequality.

The owned home is central to both the American Dream and the financial lives of U.S. households. This article explores the typical financial trajectories of homeowners during the Great Recession, assessing the viability of positioning home equity at the core of a household's balance sheet. Using the 2007–2009 reinterview panel of the Survey of Consumer Finances, we describe the diverse balance sheets of groups of homeowning households. While some homeowners lost equity and wealth in the Great Recession, we find that an owned home introduced severe risk of loss, but homeowners were less likely than renters to lose very large proportions of their wealth. The experience of homeowners' balance sheets during the downturn was diverse, and the typical experiences of different groups are compared and contrasted.

The Refund to Savings (R2S) initiative aims to help low- and moderateincome (LMI) households build short-term contingency savings by providing motivation and opportunity to save their tax refunds, the largest single sum many households receive all year. Other research on tax-time interventions has yielded promising findings (Key et al. 2012; Tufano 2010; Beverly, Tescher, and Romich 2004), but R2S expands the potential of such interventions by using a scalable delivery system (online tax-preparation software) and incorporating motivational mechanisms grounded in behavioral economics theory. The delivery of the intervention is seamlessly integrated within an existing infrastructure, ensures high fidelity between the intervention’s design and its implementation, and minimizes the cost of the intervention. The intervention mechanisms are designed to help tax filers overcome psychological and behavioral barriers that limit the accumulation of savings.

We examine the 10-year follow-up effects on retirement saving of an individual development account (IDA) program using data from a randomized experiment that ran from 1998 to 2003 in Tulsa, Oklahoma. The IDA program included financial education, encouragement to save, and matching funds for several qualified uses of the saving, including contributions to retirement accounts. The results indicate that as of 2009, 6 years after the program ended, the IDA program had no impact on the propensity to hold a retirement account, the account balance, or the sufficiency of retirement balances to meet retirement expenses.

This article explores savings outcomes for participants in the $aveNYC tax‐time matched savings program compared with a group of New York City tax filers who were not offered the program. $aveNYC was administered at Volunteer Income Tax Assistance sites during the 2008–2010 tax seasons. The program offered taxpayers the opportunity to open a savings account with their tax refund and receive a 50% match on their initial deposit. The study's primary outcome is savings held by respondents 6–11 months after receipt of matching funds. We compare participants in the 2009 program cohort to a comparison group on the following outcomes: level of savings, having nonzero savings, and having enough savings to cover one or two months of expenses at current consumption levels. We find significant differences on savings levels, the presence of any savings, and the likelihood of having savings to meet one month's expenses.

This research examined the relationship between homeownership and the likelihood of marriage or divorce. Drawing on exchange theory and an economic understanding of marriage, the authors hypothesized that single homeowners are less likely to marry than single renters, whereas married homeowners are less likely to divorce than married renters. These hypotheses were tested using longitudinal data collected from a group of lower income homeowners and a comparison group of renters. Propensity score models were used to account for selection bias. Results indicate that single homeowners are, in fact, less likely to marry than their renting counterparts, whereas married homeowners are less likely to divorce than married renters. These findings suggest that assets, such as a home, can play a significant role in the likelihood of both marriage and divorce.

The recession of 2007–2009, the so-called Great Recession, brought human and economic suffering to millions of American households. In a few short years, perilous housing markets and anemic labor markets washed away decades of accumulated wealth. Households of all types experienced significant losses in assets between 2007 and 2009. Because the assets on a household's balance sheet are the sum of their economic past and the foundation upon which they build their future, the state of household balance sheets during and after the Great Recession is an important concern.KeywordsBalance SheetGreat RecessionTypical HouseholdLiquid AssetAsset HoldingThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

In the land of the blind, the one‐eyed man may be king. But positions of power may produce their own forms of blindness. This paper reviews multiple theoretical approaches to the concept of powerblindness and categorizes these literatures into five forms through which powerblindness operates: powerblind identity (failure to notice that one belongs to a privileged group), powerblind egalitarianism (belief that all groups are equal in power), powerblind hierarchy (emphasis on one's own subordinate position), powerblind exception (the claim that one is less privileged than others in one's group), and powerblind justification (belief that present‐day hierarchy is merited or inevitable). The paper identifies studies offering evidence for each, drawing on social‐psychological experiments, survey data, and qualitative research, suggesting that power and knowledge do not necessarily go hand in hand – some forms of knowledge about the social order may be more visible to people with less power than to people with more.

This paper presents evidence from a randomized field experiment testing the impact of a 3-year matched savings program on educational outcomes 10 years later. We examine the effect of an Individual Development Account (IDA) program on educational enrollment, degree completion, and increased education level. The IDA program, which ran from 1998 to 2003 in Tulsa, Oklahoma, provided low-income households with financial education and matching funds for qualified savings withdrawals, including a 1:1 match for educational uses. We find a significant impact on education enrollment and positive, but non-significant impacts on degree completion and increase in level of education. We also examine the interaction between gender and treatment assignment and find that the IDA had a strong positive effect on increased educational attainment for males, but not for females.

This paper presents evidence from a randomized field experiment testing the impact of a 3-year matched savings program on educational outcomes 10 years after the start of the experiment. We examine the effect of an Individual Development Account (IDA) program on (1) educational enrollment, (2) degree completion, and (3) increased education level. The IDA program, which ran from 1998 to 2003 in Tulsa, Oklahoma, provided low-income households with financial education and matching funds for qualified savings withdrawals, including a 1:1 match for educational uses. We find a significant impact on education enrollment and positive (but nonsignificant) impacts on degree completion and increase in level of education. We also examine the interaction between gender and treatment assignment, finding that the IDA had a strong positive effect on increased educational attainment for men but not for women. (C) 2013 Elsevier Ltd. All rights reserved.

Using data from a set of low- and moderate-income homeowners who received prime mortgages through the Community Advantage Program panel and a matched set of renters, we assess the effect of sustained homeownership on net worth and components of net worth. In this article, our aim is to test the claim that, all else being equal, investing in and maintaining ownership of a home yield higher short-term increases in net worth and other measures of economic well-being than do renting and choosing other forms of investment and consumption. We attempt to isolate the effect of homeownership from the factors that cause both homeownership and increases in wealth using three matching approaches that address sample selection and endogeneity in the data. After balancing renters and owners on observed characteristics and adjusting for influential outlying cases, we find that low- and moderate-income homeowners experience greater short-run increases in net worth, assets, and nonhousing net worth than renters do. These findings are particularly interesting because the period of study coincides with the housing crisis, periods of shrinking home values, and declining equity in the housing market as a whole.

We examine the long-term effects of a 1998-2003 randomized experiment in Tulsa, Oklahoma with Individual Development Accounts that offered low-income households 2:1 matching funds for housing down payments. Prior work shows that, among households who rented in 1998, homeownership rates increased more through 2003 in the treatment group than for controls. We show that control group renters caught up rapidly with the treatment group after the experiment ended. As of 2009, the program had an economically small and statistically insignificant effect on homeownership rates, the number of years respondents owned homes, home equity, and foreclosure activity among baseline renters. (JEL D14, H75, R21, R31)

Paper presents results of an evaluation of a tax-time savings program. $aveNYC offers incentivized savings accounts to taxpayers filing their taxes at Volunteer Income Tax Assistance (VITA) sites in New York City. Participants who direct-deposited at least $200 of their refund into the account and maintained the balance for a year received 50 cents per dollar saved. A comparison group was drawn from NYC VITA sites where the program was not offered. Propensity score weighting was used to balance the two groups. Study participants (N = 353) were surveyed via telephone halfway through the program, and again 8 months after the program ended. 70 percent of $aveNYC participants surveyed received the match. The majority of those who received the match continued to save some portion of the money. At the second survey, there was no significant difference between groups in savings amount: this finding may be due to measurement limitations. $aveNYC participants were less likely than comparison group members to have skipped paying bills or taken out a loan during the study period, and were more likely to have withdrawn money from savings. Findings suggest that tax-time savings programs can result in sustained emergency savings and prevent reliance on borrowing and unpaid bills. (C) 2013 Elsevier Inc. All rights reserved.

Using data on low-to-moderate-income households in the US Community Advantage Program survey, this paper examines homeownership, neighbourhood characteristics and the interaction between the two on the positive behaviour of children from low- and moderate-income households. To control for potential selection bias and endogeneity problems, propensity score weighting and hierarchical regression are employed to tease apart the effects of homeownership, neighbourhood characteristics and their interaction on child positive behaviour. No effect is found of homeownership or neighbourhood characteristics on children's positive behaviour when the interaction between the two is not included in the model. However, homeownership was found to have a stronger positive effect on children's positive behaviour as neighbourhood population density increases and, at approximately 4000 persons per square mile (approximate population density of San Diego, CA), homeownership has a significant positive effect on children's overall scores on the positive behaviour scale.

This report presents findings from the fourth wave of the American Dream Demonstration (ADD) experimental study of Individual Development Accounts (IDAs). The ADD was a set of 14 privately funded local IDA programs initiated in the late 1990s. It was the first large-scale test of IDAs in the United States and used a variety of research methods in order to learn about IDAs. One of these programs, in Tulsa, Oklahoma, was implemented as a random assignment experiment. This report is based on a 10-year follow study of impacts at the Tulsa site.

Financial literacy and financial education play a central role in asset accumulation, shaping individuals' attitudes, behaviors, and decisions in ways that, ultimately, affect their financial and social well-being. The acquisition of financial skills begins with parental teaching and role modeling, which provides children with their first exposure to concepts of saving and money management. Because such parental instruction is crucial to children's later financial outcomes, children whose parents lack basic financial literacy may be further disadvantaged by the absence of financial instruction at home. This study uses a sample of low- and moderate-income homeowners to test the hypothesis that parental teaching of money management influences children's asset-building outcomes in adulthood. The empirical analysis examines the likelihood of delinquency and default among low- and moderate-income homeowners with mortgages purchased through the Community Advantage Program. The results are consistent with a long-term impact of parental teaching on children's later asset outcomes: greater parental teaching is found to be associated with reduced loan delinquency and foreclosure. Implications for intervention programs to close the financial literacy gap are discussed.

This paper presents evidence from a randomized field experiment to evaluate the longterm impact of an incentive for household saving. We examine the effect on homeownership of an Individual Development Account (IDA) program which ran from 1998 to 2003 in Tulsa, Oklahoma. The IDA program provided low-income households with financial education and matching funds for qualified savings withdrawals, including a 2:1 match for housing down payments. About 90 percent of treatment group members opened IDA accounts, and contributions averaged about $1,800. Homeownership rates for both treatment and control groups increased substantially throughout the experiment. Prior work shows that from 1998 to 2003, homeownership rates increased more for treatment group members than for controls. We show in this paper, however, that control group members caught up rapidly with the treatment group after the experiment ended, so that the IDA program had no significant effect on homeownership rates among the full sample in 2009 and had no effect on the duration of homeownership during the study period. The program had a positive impact on homeownership rates among those with above-sample median income ($15,840) at the time they entered the program, but not on other subgroups that we tested.