Download this Paper Open PDF in Browser

Testing Strategies to Increase Saving and Retention in Individual Development Account Programs

64 Pages Posted: 22 Feb 2016  

Cäzilia Loibl

The Ohio State University - Department of Human Sciences

Lauren Eden Jones

The Ohio State University

Emily Haisley

Independent

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Date Written: February 20, 2016

Abstract

In a series of field experiments we test whether saving and retention rates in a federally funded, matched savings program for low-income families – the Individual Development Account (IDA) program – can be improved through the introduction of program features inspired by behavioral economics. We partnered with eight IDA programs across the U.S. who agreed to randomly assign participants to different experimental conditions. We test the impact of four revenue-neutral changes in key program features: a) holding savers accountable for making savings deposits through phone calls before and after the deposit deadline, b) an increase in the frequency with which deposits are made from monthly to bi-weekly, c) the introduction of a lottery-based incentive structure, whereby match rates are determined in part by a lottery at the time of each deposit, and d) an increase in the savings match from $2 for every $1 saved to $4 for every $1 saved when half of the savings goal was reached. None of our four interventions had the desired effect of increasing savings. To explain the null findings, we speculate that liquidity constraints, rather than cognitive biases, were the primary impediment to saving.

Suggested Citation

Loibl, Cäzilia and Jones, Lauren Eden and Haisley, Emily and Loewenstein, George, Testing Strategies to Increase Saving and Retention in Individual Development Account Programs (February 20, 2016). Available at SSRN: https://ssrn.com/abstract=2735625 or http://dx.doi.org/10.2139/ssrn.2735625

Cäzilia Loibl (Contact Author)

The Ohio State University - Department of Human Sciences ( email )

1787 Neil Avenue
265K Campbell Hall
Columbus, OH 43210
United States
614-292-4226 (Phone)

Lauren Eden Jones

The Ohio State University ( email )

1787 Neil Avenue
Columbus, OH 43210
United States

Emily Haisley

Independent ( email )

No Address Available

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

Paper statistics

Downloads
286
Rank
88,320
Abstract Views
1,062