This report provides the first national estimates of the effects of individual development accounts (IDAs) on participants in the largest federally funded IDA program: the Assets for Independence (AFI) Program. IDAs are personal savings accounts targeted to low-income persons that encourage participants to save for specific types of assets by providing matching funds when the accountholder makes withdrawals for an allowable asset purchase.
The rationale for IDAs lies in the proposition that income transfers have eased the hardship of the poor but have been less effective in enabling low-income families to become economically self-sufficient. An alternative view that emerged in the early 1990s was that to promote economic advancement and self-sufficiency—as well as to encourage socially positive behaviors—policies should focus on asset accumulation, in combination with income support.
The AFI Act calls for an evaluation of AFI projects to be carried out by an independent research organization under contract to HHS. The evaluation is to analyze the effects of incentives and services on participant savings; the extent to which participant savings vary by demographic characteristics; the economic, civic, psychological and social effects of savings; the effects of project participation on savings rates, homeownership, postsecondary educational attainment, and self-employment; the potential financial returns from IDAs to the Federal government and other public and private sector investors over a 5-year and 10-year period of time; and the lessons learned from the demonstration project and whether an IDA program should become permanent. The Act specifies further that the evaluation is to utilize a control group to compare AFI project participants with nonparticipants, and to utilize both quantitative and qualitative data. A final evaluation is to be completed within one year following the conclusion of all AFI projects funded under the Act.
The full report can be found here: /programs/ocs/afi/AFI_Final_Impact_Report.pdf (PDF)