Assets for Independence Program Experiment


From 1998 until 2017, ACF operated the Assets for Independence (AFI) program, a demonstration program that supported an assets-based approach for increasing the economic self-sufficiency of individuals and families with low-incomes through Individual Development Accounts (IDAs). In 2011, ACF launched a random assignment evaluation of the impact of participation in the AFI Program on savings, savings patterns, and asset purchase by low-income individuals and families at selected AFI grantee sites. The AFI Experiment builds on the previous quasi-experimental evaluation of the AFI program, as well as various studies of other non-AFI funded Individual Development Account projects. Although the AFI program concluded in 2017, the evaluation will further understanding of the AFI program by addressing unanswered questions regarding the program's overall impact on early participant outcomes, as well as the impact of AFI program design features on short- and intermediate-term outcomes.

The study, led by the Urban Institute and its partners MEF Associates and RTI International, randomly assigned participants to a treatment or control group in two AFI grantee sites — RISE Financial Pathways in Los Angeles, CA and Prosperity Works in Albuquerque, New Mexico. In addition to the impact analysis, the evaluation also features an implementation study in each site. Enrollment began in early 2013 and concluded in summer 2014. A report summarizing early impact and implementation findings was released in late 2016.

The early impact report finds two beneficial primary effects of AFI program participation:

  • A 7 percentage point (9 percent) increase in the share of participants with liquid assets.
  • A $657 median increase and $799 mean increase in liquid assets. Because the study looks at all liquid assets—including savings, checking, money market, and retirement accounts plus stocks and bonds—results indicate that participants are not simply shifting savings from one type of account into their IDA, but instead are creating new savings.

In addition, early findings provide evidence that AFI affects several important secondary outcomes, such as:

  • A 34 percent reduction in the number of hardships related to utilities, housing, or health (equivalent to a decrease of one hardship).
  • A 7 percentage point (10 percent) increase in the share of participants who received at least one form of public benefits, such as cash, nutrition, housing, or energy assistance, child care subsidies, or Medicaid. These benefits may help AFI participants avoid material hardship as they work to save for their long-term investment.
  • A 4 percentage point (39 percent) decline in the use of alternative (nonbank) check cashing services, suggesting that AFI participation helps people enter the financial mainstream.
  • A 10 percent increase in participants’ confidence in their ability to meet normal monthly living expenses.

In 2015, ACF provided support to the Urban Institute and its partners to conduct intermediate follow-up data collection on participants in the initial study. This follow-on effort surveyed participants at 36 months after random assignment in order to provide important information on the intermediate impacts of AFI participation. The 36-month follow-up survey was completed in fall 2017 and a final report summarizing impact findings 9 was released in April 2020. The findings are as follows:

  • In the short term, AFI increased participants’ savings.
  • In the short and medium terms, AFI participants had fewer hardships (e.g., the number of times they could not pay for housing, utilities, or needed medical care) and used alternative (nonbank) check-cashing services less. Participants also experienced improved financial well-being.
  • In the medium-term, AFI increased the future-orientation of participants’ time preferences.
  • In the medium-term, AFI did not increase homeownership, business ownership, or postsecondary education or training among the full sample of study participants, yet participation did increase homeownership among renters and increased business ownership among nonbusiness owners.

Point(s) of contact: Hilary Bruck.

Related Resources

Savings and assets play an important role in economic stability and upward mobility for families with low incomes. To help households with low incomes build assets, the federal government launched the Assets for Independence (AFI) program, authorized by Congress in 1998. This program funded individual development accounts (IDAs) that matched personal savings for assets such as a first home, capital to start a business, or higher education and training...

Assets such as a home or business can provide families with economic stability and a foundation for long-term upward mobility. To help households with low incomes build assets, the federal government launched the Assets for Independence (AFI) program, authorized by Congress in 1998. The Urban Institute evaluated the AFI program at two sites using a randomized controlled trial, the gold standard for measuring program effectiveness. This is the final report of our three-year evaluation. 

Community colleges can offer aspiring students vital job skills and open doors to further postsecondary education, but paying for classes alongside living and other expenses can be challenging for students with limited means. Individual development account (IDA) programs assist low-income current and prospective students by matching their savings toward higher education expenses and by providing financial education on how to save and plan for those expenses.

This report presents first-year findings from an evaluation of the Assets for Independence (AFI) program at two sites — Central New Mexico Community College in Albuquerque, NM and RISE Financial Pathways in Los Angeles, CA.

Findings show that the AFI program increased low-income participants’ savings after one year. There is also evidence of a range of several beneficial secondary impacts, including reductions in material hardship and improvements in perceived financial well-being...