Unemployment, Financial Hardship, and Savings in Individual Development Accounts

Abstract

Using longitudinal data collected at the Tulsa Individual Development Accounts (IDAs) program, this study aims to examine to what degree unemployment and accompanying financial hardship are associated with savings in Individual Development Accounts. Of 328 participants in the IDA program, 89 (27%) participants experienced unemployment during the 4-year demonstration period.Participants who experienced unemployment during the demonstration period were more likely to perceive financial hardship. Furthermore, unemployed participants with financial hardship were found to save less, as measured by average monthly net deposit (AMND), than participants who were employed throughout the demonstration. Policy and practice implications are discussed.

Contribution of Financial Sector Development in Reducing Unemployment in Pakistan

“…However, over the short-run association was insignificant. Likewise results were observed by Han (2009) in USA. According to him financial sector turmoil caused unemployment which negatively affected the financial affordability for basic needs such as a home, food, clothes, and medical care.…”

Exploring the Relationship Between Assets and Family Stress Among Low‐Income Families

“…The total liability variable was transformed with log base 10. These covariates have been frequently used in previous studies testing asset effects (Dew, 2007;Han, 2009;Han et al, 2009). Because African American IDA participants have different saving outcomes compared with other ethnicity groups (Han; Han et al), we divided the participants into two groups, African Americans and others (included Whites, Asian Americans, and Hispanics).…”

Savings and family functioning since the 2008 recession: An exploratory study in Singapore

“…Low-income households are likely to have fewer possessions and savings, and thus are more vulnerable than middle- and upper-income households to the financial hardships of unemployment (Han, 2009). Furthermore, low-income families compared to middle- and upper-income households have less access to financial and other banking services that protect and grow wealth (Barr and Blank, 2009).…”

“…When low-income households experience an economic recession they are likely to encounter financial strain (Han, 2009). In this situation, low-income households are likely to struggle to make ends meet and pay for basic needs including food, medical care, and housing.…”