First‐Year Impacts on Savings and Economic Well‐Being from the Assets for Independence Program Randomized Evaluation

Abstract

Individual development accounts (IDAs) help low‐income families save by providing a savings account and a potential match toward personal savings for specific investments, such as a first home, business capitalization, or postsecondary education and training. The Assets for Independence (AFI) program uses AFI IDAs—commonly coupled with financial education—with the goal of helping low‐income households achieve greater self‐sufficiency. Using a randomized controlled trial, we evaluate the impact of AFI after one year and find that the median level of liquid assets was $657 higher for the treatment group than the control group (before matching funds). We also find that the treatment (vs control) group experienced less material hardship (by 34%) and was less likely to use nonbank check‐cashing services (by 39%).

Using the Family Self‐Sufficiency Program to Help Families with Housing Assistance Improve Earnings, Credit Score, and Debt Levels: A Quasi‐Experimental Analysis

“…But it does have some parallels to FSS in the sense of providing a deferred benefit, rather than an immediate cash benefit. Notwithstanding the deferred benefits, evidence suggests that IDAs can be effective in encouraging savings while the program is in operation (Mills et al ; 2008). Effects on secondary impacts like homeownership, however, appear to diminish or disappear over the long‐term (Grinstein‐Weiss et al ).…”

Variance Estimation in Evaluations With No-Shows: A Comparison of Methods

“…Alternative computations in the literature make additional assumptions and adjustments for these issues (e.g., Heckman, Hohmann, & Smith [with Khoo, M.], 2000]). However, because of its frequency of use in the recent literature (e.g., Bagby et al, 2016; Dynarski et al, 2017; Johnson et al, 2016; Mills et al, 2016; Theodos et al, 2016), we examine the one-sided no-show adjustment and leave issues related to control group crossovers to future work.…”

“…This technique has particular popularity in large-scale randomized evaluations funded by government agencies and foundations (Bloom, Orr, Cave, Bell, & Doolittle, 1993; Love et al, 2005; Sanbonmatsu et al, 2011; Trenholm et al, 2007). Furthermore, the technique remains popular—an Internet search identified at least five major reports funded by the U.S. Department of Education, the Corporation for National and Community Service, the U.S. Department of Health and Human Services’ Administration for Children and Families, the Millennium Challenge Corporation, and the Ewing Marion Kauffman Foundation published between 2016 and 2017 that used the Bloom adjustment to report TOT impacts and their associated statistical significance (Bagby, Dumitrescu, Orfield, & Sloan, 2016; Dynarski, Rui, Webber, & Gutmann, 2017; Johnson, Demers, Johnson, & Gentile, 2016; Mills et al, 2016; Theodos, Pergamit, Derian, Edelstein, & Stolte, 2016). We postulate that this method remains popular because the approach is straightforward, easily executed, and similarly easily explained to a wide audience.…”

Increasing College Going by Incentivizing Savings: Evidence from a Randomized Controlled Trial in Italy

“…This might increase the likelihood of the family experiencing financial distress or material hardship, which can also have long‐term consequences on children. To avoid this, matched savings programs often allow unmatched savings withdrawals to allow families to face emergency expenses (Mills et al., 2019). A further potential criticism concerns the fact that the savings accumulated in the account may count as financial assets when eligibility for other public social benefits is determined, and this may discourage families’ participation or prevent them from accessing important social support (Ratcliffe, et al., 2016).…”