Effects of Individual Development Accounts on Asset Purchases and Saving Behavior: Evidence from a Controlled Experiment

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

doi:10.2139/ssrn.2460870

Cited by 29 publications

(49 citation statements)

References 29 publications

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“…To avoid potential problems from differential attrition, we limit our analysis to the 437 renters who were in nonsubsidized housing at baseline (where ''subsidized" is defined as residing in a public housing project or Section 8 housing) and appear in the Wave 3 survey. Mills et al (2008) also show that, among this group, 4 years after randomization, treatment group households had a 7-11% point higher homeownership rate than control group households. There were no economically or statistically significant treatment effects for the purchase of other qualified assets.…”

Section: Data and Descriptive Statisticsmentioning

confidence: 68%

“…Note: Statistical significance is indicated as follows: *** p < 0.01; ** p < 0.05; and * p < 0.10. 15 Mills et al (2008) provide an extensive discussion of participation, summarized briefly here. Participation rates were quite high across all of the economic and demographic groups and relatively insensitive to typical determinants of saving behavior, such as age, income, or net worth, consistent with results in other IDA projects (Schreiner and Sherraden, 2006 only, and thus exhibits the behavior that would be observed in nonexperimental survey data.…”

Section: Resultsmentioning

confidence: 99%

“…As documented in Mills et al (2008), there were significant differthe participant's request) into a Roth IRA with a 1:1 match. Participants who contributed more than $750 in 1 year could carry forward the difference as a matchable contribution for the following year.…”

Section: Data and Descriptive Statisticsmentioning

confidence: 89%

“…The primary advantage of this instrument is that it is exogenous via random assignment. 6 In a companion paper (Mills et al, 2008), we show that, 4 years after randomization, treatment group renter households had a 7-11% point higher homeownership rate than control group renter households. This represented a 25-30% increase in homeownership, which is sizable relative to baseline.…”

Section: Introductionmentioning

confidence: 88%

“…13 The households in Tulsa IDA sample are not a representative sample of lowincome households. In particular, Tables A1 and A2 in the appendix to Mills et al (2008) compare the combined IDA sample (treatments and controls) to households who matched the IDA eligibility requirements -i.e., they were employed and had income below 150% of the poverty level -taken from the 1998 Survey of Consumer Finances and from a Tulsa-area sub-sample of the 2000 Census Public-Use Microdata Sample. The three samples show roughly similar average age, but differ markedly in other respects.…”

Section: Data and Descriptive Statisticsmentioning

confidence: 99%

See 4 more Smart Citations

What are the social benefits of homeownership? Experimental evidence for low-income households

Engelhardt

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Gale

et al. 2010

Journal of Urban Economics

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Section: Data and Descriptive Statisticsmentioning

confidence: 68%

Section: Resultsmentioning

confidence: 99%

Section: Data and Descriptive Statisticsmentioning

confidence: 89%

Section: Introductionmentioning

confidence: 88%

Section: Data and Descriptive Statisticsmentioning

confidence: 99%

See 3 more Smart Citations

What are the social benefits of homeownership? Experimental evidence for low-income households

Engelhardt

Eriksen

Gale

et al. 2010

Journal of Urban Economics

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Do Child Development Accounts Promote Account Holding, Saving, and Asset Accumulation for Children's Future? Evidence from a Statewide Randomized Experiment

Nam¹,

Kim²,

Clancy³

et al. 2012

J Policy Anal Manage

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This study examines the impacts of Child Development Accounts (CDAs) on account holding, saving, and asset accumulation for children, using data from the SEED for Oklahoma Kids experiment (SEED OK). SEED OK, a policy test of universal and progressive CDAs, provides a 529 college savings plan account to every infant in the treatment group with automatic account opening and an initial deposit. SEED OK also encourages treatment participants to open their own 529 accounts with an account opening incentive and a savings match. Using a sample of infants randomly selected from birth records (N = 2,670) and randomly assigned to treatment and control groups, this study runs probit and ordinary least squares (OLS) regressions. Analyses show significant differences between treatment and control groups in all outcome measures in the targeted accounts. Nearly 100 percent of the treatment group accepted the automatically opened state‐owned account. Compared to 1 percent of the control group, 16 percent of the treatment group hold a participant‐owned account. On average, the treatment group has saved significantly larger amounts in participant‐owned accounts, although a difference in savings amount is modest between the two groups ($47 vs. $13). A difference in total 529 assets of $1,040 is estimated between the treatment and control groups. These early findings from SEED OK suggest that CDAs have positive effects on savings and asset accumulation for children's future development. Further research is required to test long‐term cost effectiveness of CDAs.

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Effects of Monitoring on Mortgage Delinquency: Evidence From a Randomized Field Study

Moulton¹,

Collins²,

Loibl³

et al. 2014

J. Pol. Anal. Manage.

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In the wake of the housing crisis in 2008, U.S. policymakers have developed a range of policy proposals to address the risk of mortgage borrowers going into payment default. Some of these proposed regulations would effectively eliminate certain loans with riskier borrower characteristics from the market. Such prescriptive approaches fail to recognize alternatives that permit riskier loans to be made, but require postorigination practices designed to offset elevated default risk by improving the capability of individual borrowers to make timely payments. This study provides evidence of one such approach. Through a randomized field experiment, we test the impact of goal setting and external monitoring on mortgage delinquency. First-time homebuyers who completed a financial planning module and received quarterly contact from a financial coach are less likely to become delinquent or default on their mortgages. These results suggest that relatively low cost procedures embedded into loan servicing may increase adherence to timely repayments, thereby reducing the probability of delinquency while still permitting riskier borrowers to participate in credit markets. C 2014 by the Association for Public Policy Analysis and Management.

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Effects of Individual Development Accounts on Asset Purchases and Saving Behavior: Evidence from a Controlled Experiment

Cited by 29 publications

References 29 publications

What are the social benefits of homeownership? Experimental evidence for low-income households

What are the social benefits of homeownership? Experimental evidence for low-income households

Do Child Development Accounts Promote Account Holding, Saving, and Asset Accumulation for Children's Future? Evidence from a Statewide Randomized Experiment

Effects of Monitoring on Mortgage Delinquency: Evidence From a Randomized Field Study

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