Presented at “Taking the Measure of ADD”.pdf

Saving in ADD: Measures from MIS IDA Mark Schreiner and Michael Sherraden November 26, 2005 Presented at “Taking the Measure of ADD” April 20, 2005, Radisson Hotel, Saint Louis Center for Social Development George Warren Brown School of Social Work Washington University in Saint Louis Campus Box 1196, One Brookings Drive Saint Louis, MO 63130-4899 Telephone: (314) 935-9778 /csd/ Abstract Can the poor save? Data collected with the Management Information System for Individual Development Accounts (MIS IDA) in the American Dream Demonstration (ADD) show that they can. About half of participants had net IDA savings of more than $100, and monthly savings averaged $16.60. While participant characteristics were linked with IDA savings, no single characteristic (such as receipt of welfare or very low income) precluded saving. More relevant for policy is that several aspects of IDA design—including the match rate, match cap, time limits, use of automatic transfer, financial education, and restrictions on unmatched withdrawals—were strongly linked with saving. Overall, it seems that institutions for saving, when offered to the poor, work much like they do for the non-poor. Acknowledgments Parts of this paper draw on Schreiner and Sherraden (2005a). Saving in ADD: Measures from MIS IDA 1.Saving by the poor in ADD Can the poor save? Data from the American Dream Demonstration (ADD) of Individual Development Accounts (IDAs) provides a unique window on this question. Developed by the Center for Social Development to facilitate administration and research, the Management Information System for IDAs (MIS IDA) tracked monthly cash flows through IDA