Work

Educational Status and Savings Performance in Individual Development Accounts

Year: 2007

Type: article

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.

Source: Journal of Policy Practice

DOI: 10.1300/j508v06n01_03

Authors: Min Zhan, Michal Grinstein-Weiss

Institutions: University of Illinois Urbana-Champaign, University of North Carolina at Chapel Hill

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: No poverty, Quality education, Reduced inequalities

Open Access status: green

OpenAlex ID: W2007198370

FWCI: 5.772

Cites: 26

Cited by: 17

Related to: 10