Exploring Saving Performance in an IDA Program: Findings for People with Disabilities

Abstract

Asset development policies have been promoted as a means to create a more inclusive ownership society. During the past few years, asset-building scholarship has begun to focus specifically on marginalized groups, including people with disabilities. Using a sample of individual development account (IDA) program participants (N = 376), the authors examine effects of disability status on IDA saving performance. They also assess variations in saving performance by individual and programmatic characteristics. Results suggest that disability status, in addition to a number of individual and program characteristics, is associated with saving performance in an IDA program. Implications for practice and scholarship are presented. KEY WORDS: asset building; disability; IDAs; institutional characteristics; savings ********** The steady increase in levels of marginalization and unequal distribution of wealth in the United States over the past three decades has prompted interest in antipoverty policy that expands the wealth of individuals currently in poverty through asset-building strategies such as individual development accounts (IDAs) (GrinsteinWeiss, Wagner, & Edwards, 2005; Sherraden, 1991). IDAs are among asset accumulation programs that are increasingly being presented as a primary vehicle through which individuals and households with limited economic resources and opportunities can gain a foothold on the American economic ladder (Boyle & Boguslaw, 2007; Sherraden, 2001). (IDAs are a special savings accounts targeted at the working poor population [mainly those with incomes below 200% of the federal poverty guideline]. In these programs, poor people are encouraged to save. The deposits in IDAs are matched [the match rate ranges from 1:1 to 6:1].The matched savings can be used for investing in any of the following assets: microenterprise, homeownership, postsecondary education, or retirement [see, Schreiner et al., 2001, for a detailed description of each of these programs]). Unlike other asset-building programs, IDAs are unique in that specific savings goals--such a downpayment on a home, small business capitalization, advanced education, or retirement--are identified by program participants. Since the mid-1990s, a number of policies promoting IDAs for asset building among low-income individuals and households have been put in place. An example of these is the 1996 Welfare Reform Act, which included IDAs as a state option, allowing states to use funds from block grants for matched savings accounts for low-income individuals and households without counting the savings toward prevailing asset limits in means-tested programs (Edwards & Rist, 2001). Another example is the 1998 Assets for Independence Act, authorizing $125 million to be used in account matching and limited administrative funds for an IDA demonstration over a five-year period (Kameri, 2000). Current estimates are that over 500 IDA programs have been developed in the United States since 1991 (Edwards & Rist, 2001; Schreiner et al., 2001), with upwards of 50,000 IDA accounts in operation (Corporation for Enterprise Development, 2007). Previous research within the context of the American Dream Demonstration (ADD), the first national policy IDA demonstration project, has begun to demonstrate that poor people can save, albeit in small amounts, and accumulate assets (Schreiner & Sherraden, 2006). Although IDA program participants in ADD included a significant number of people with disabilities, disability itself has not yet been examined as a factor that potentially may influence saving outcomes. To our knowledge, there is no existing empirical evidence from research on IDA participants that has examined outcomes for people with disabilities. The lack of specific research on disability status and IDA performance makes it difficult to ascertain whether the outcomes of IDA participation are any different for people with disabilities or if the effects of institutional and individual characteristics on saving performance vary by disability status. …