Effects of individual development accounts on asset purchases and saving behavior: Evidence from a controlled experiment

Gregory Mills, William G. Gale, Rhiannon Patterson, Gary Engelhardt, Michael D. Eriksen, Emil Apostolov

Research output: Contribution to journalArticle

51 Scopus citations

Abstract

We evaluate the first controlled field experiment on Individual Development Accounts (IDAs). Including their own contributions and matching funds, treatment group members in the Tulsa, Oklahoma program could accumulate $6750 for home purchase or $4500 for other qualified uses. Almost all treatment group members opened accounts, but many withdrew all funds for unqualified purposes. Among renters at the beginning of the experiment, the IDA increased homeownership rates after 4 years by 7-11 percentage points and reduced non-retirement financial assets by $700-$1000. The IDA had almost no other discernable effect on other subsidized assets, overall wealth, or poverty rates.

Original languageEnglish (US)
Pages (from-to)1509-1530
Number of pages22
JournalJournal of Public Economics
Volume92
Issue number5-6
DOIs
StatePublished - Jun 2008

    Fingerprint

Keywords

  • Asset building
  • Low-income households
  • Matching contibutions
  • Saving
  • Wealth accumulation

ASJC Scopus subject areas

  • Economics and Econometrics
  • Finance

Cite this