What Do Individual Development Accounts Do? Evidence from a Controlled Experiment
41 Pages Posted: 16 Jul 2006
Date Written: June 21, 2006
This paper evaluates the first controlled field experiment on Individual Development Accounts (IDAs). Including their own contributions and matching funds, treatment group members could accumulate up to $6,750 for home purchase or $4,500 for other qualified uses. Almost all treatment group members opened accounts, but many withdrew the balances for unqualified purposes. For black renters at baseline, the IDA raised home ownership rates by almost 10 percentage points over 4 years, but reduced financial assets and business ownership. White renters experienced no home ownership effects, but business equity rose. Home owners used the IDA in different ways than renters.
Keywords: Individual, development, accounts, IDAs
JEL Classification: H31
Suggested Citation: Suggested Citation