Association for Public Policy Analysis & Management

To increase economic self-sufficiency and family stability, the United States and other countries have experimented with expanding asset-building policies and programs to low-income families. Much of this expansion has taken the form of matched savings accounts, which provide families with a financial incentive to save. Individual development accounts (IDAs), first proposed in 1991 (Sherraden 1991), led the way.  IDAs are savings accounts targeted at low-income households that match personal deposits when used for specific investments such as a home, small business, or one’s own education,. Since then, other matched savings programs have been developed and tested, including children’s savings accounts (CSAs) and financial matches at tax time (e.g., SaveUSA).

The Assets for Independence Program (AFI), authorized by the Assets for Independence Act (1998), is the largest source of funding for IDAs in the United States. Despite a relatively large literature on IDAs (see Harris et al. 2014; Zielewski et al. 2009), the effects of participating in AFI-funded IDAs have not been evaluated using a randomized control trial.   This report presents short-term findings (after approximately 12 months) from an experimental evaluation undertaken at AFI program sites in Albuquerque, New Mexico, and Los Angeles, California.

The purpose of this evaluation is to assess the impact of participation in AFI-funded IDA projects on the savings, asset purchases, and economic well-being of low-income individuals and families. The primary research question addressed is:

What is the short-term impact of AFI program participation on outcomes such as savings, asset purchases, and material hardship?

Findings from this evaluation and from a longer term evaluation, which will measure impacts at three and five years, will provide important contributions to the asset-building field.