First‐Year Impacts on Savings and Economic Well‐Being from the Assets for Independence Program Randomized Evaluation

Gregory Mills, Signe‐Mary McKernan, Caroline Ratcliffe, Sara Edelstein, Michael Pergamit and Breno Braga

Journal of Consumer Affairs, 2019, vol. 53, issue 3, 848-868

Abstract: Individual development accounts (IDAs) help low‐income families save by providing a savings account and a potential match toward personal savings for specific investments, such as a first home, business capitalization, or postsecondary education and training. The Assets for Independence (AFI) program uses AFI IDAs—commonly coupled with financial education—with the goal of helping low‐income households achieve greater self‐sufficiency. Using a randomized controlled trial, we evaluate the impact of AFI after one year and find that the median level of liquid assets was $657 higher for the treatment group than the control group (before matching funds). We also find that the treatment (vs control) group experienced less material hardship (by 34%) and was less likely to use nonbank check‐cashing services (by 39%).

Date: 2019
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