What Do Individual Development Accounts Do? Evidence from a Controlled Experiment

Mills, Gregory; Gale, William G.; Patterson, Rhiannon; Apostolov, Emil

doi:10.2139/ssrn.915381

Download This Paper

Open PDF in Browser

Add Paper to My Library

What Do Individual Development Accounts Do? Evidence from a Controlled Experiment

41 Pages Posted: 16 Jul 2006

See all articles by Gregory Mills

Rhiannon Patterson

U.S. Government Accountability Office (GAO)

Emil Apostolov

Brookings Institution

Date Written: June 21, 2006

Abstract

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

Mills, Gregory and Gale, William G. and Patterson, Rhiannon and Apostolov, Emil, What Do Individual Development Accounts Do? Evidence from a Controlled Experiment (June 21, 2006). Available at SSRN: https://ssrn.com/abstract=915381 or http://dx.doi.org/10.2139/ssrn.915381