Educational status and savings performance in individual development accounts

Min Zhan, Michal Grinstein-Weiss

Research output: Contribution to journalArticle

Abstract

This study examines the relationship between education and savings performance in Individual Development Accounts (IDAs), a matched savings program for the poor. Based on economic and institutional theories of savings, we further investigate whether the relationship between education and savings is mediated by income, intended uses of IDAs, or program factors. The data of this study are from the American Dream Demonstration (N = 2,150), the first national demonstration of IDAs. The results indicate that education was positively related to savings after controlling for program factors and other individual characteristics. Household income and two program factors, monthly savings target and financial education, partially mediated the relationship between education and savings outcomes. These results provide some support for both economic and institutional theories of savings among low-income people. The findings also may help design and implement more effective savings programs for the low-income population and its varying segments.

Original languageEnglish (US)
Pages (from-to)27-46
Number of pages20
JournalJournal of Policy Practice
Volume6
Issue number1
DOIs
StatePublished - Feb 1 2007

Keywords

  • Educational status
  • IDAs
  • Savings
  • Welfare reform

ASJC Scopus subject areas

  • Sociology and Political Science
  • Public Administration

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