The Ten-Year Impacts of Individual Development Accounts on Homeownership: Evidence from a Randomized Experiment

55 Pages Posted: 10 Mar 2011

See all articles by Michal Grinstein-Weiss

Michal Grinstein-Weiss

University of North Carolina (UNC) at Chapel Hill; Washington University in St. Louis

Michael W. Sherraden

Washington University in St. Louis - George Warren Brown School of Social Work

William G. Gale

Brookings Institution

William Rohe

University of North Carolina (UNC) at Chapel Hill

Mark Schreiner

Washington University in St. Louis - Center for Social Development

Clinton Key

University of North Carolina (UNC) at Chapel Hill

Date Written: March 9, 2011

Abstract

This paper presents evidence from a randomized field experiment to evaluate the longterm impact of an incentive for household saving. We examine the effect on homeownership of an Individual Development Account (IDA) program which ran from 1998 to 2003 in Tulsa, Oklahoma. The IDA program provided low-income households with financial education and matching funds for qualified savings withdrawals, including a 2:1 match for housing down payments. About 90 percent of treatment group members opened IDA accounts, and contributions averaged about $1,800. Homeownership rates for both treatment and control groups increased substantially throughout the experiment. Prior work shows that from 1998 to 2003, homeownership rates increased more for treatment group members than for controls. We show in this paper, however, that control group members caught up rapidly with the treatment group after the experiment ended, so that the IDA program had no significant effect on homeownership rates among the full sample in 2009 and had no effect on the duration of homeownership during the study period. The program had a positive impact on homeownership rates among those with above-sample median income ($15,840) at the time they entered the program, but not on other subgroups that we tested.

Keywords: Housing, Real Estate, Homeownership, IDA, Economic Growth, US, Economy

Suggested Citation

Grinstein-Weiss, Michal and Sherraden, Michael W. and Gale, William G. and Rohe, William and Schreiner, Mark Joseph and Key, Clinton, The Ten-Year Impacts of Individual Development Accounts on Homeownership: Evidence from a Randomized Experiment (March 9, 2011). Available at SSRN: https://ssrn.com/abstract=1782018 or http://dx.doi.org/10.2139/ssrn.1782018

Michal Grinstein-Weiss

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Michael W. Sherraden

Washington University in St. Louis - George Warren Brown School of Social Work ( email )

St. Louis, MO 63130
United States
+1 314 935-6691 (Phone)
+1 314 935-8511 (Fax)

William G. Gale (Contact Author)

Brookings Institution ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
United States
202-797-6148 (Phone)
202-797-6181 (Fax)

William Rohe

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Mark Joseph Schreiner

Washington University in St. Louis - Center for Social Development ( email )

St. Louis, MO 63130
United States
314-935-9778 (Phone)
314-935-8661 (Fax)

Clinton Key

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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