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

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

doi:10.1016/j.jpubeco.2007.09.014

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

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

Research output: Contribution to journal › Article › peer-review

56 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 language	English (US)
Pages (from-to)	1509-1530
Number of pages	22
Journal	Journal of Public Economics
Volume	92
Issue number	5-6
DOIs	https://doi.org/10.1016/j.jpubeco.2007.09.014
State	Published - Jun 2008

Keywords

Asset building
Low-income households
Matching contibutions
Saving
Wealth accumulation

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.jpubeco.2007.09.014

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

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.",

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AU - Patterson, Rhiannon

AU - Engelhardt, Gary V.

AU - Eriksen, Michael D.

AU - Apostolov, Emil

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KW - Low-income households

KW - Matching contibutions

KW - Saving

KW - Wealth accumulation

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

Abstract

Keywords

ASJC Scopus subject areas

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