Both theoretical frameworks and empirical evidence show that asset-based, means-tested welfare programs have negative effects on savings behaviors of welfare recipients. In this study, we examine how welfare recipiency is associated with savings outcomes in Individual Development Accounts. The results suggest that when other factors are controlled, receipt of welfare either before or at enrollment of IDAs is not correlated with savings outcomes. Policy implications under current welfare reform are discussed.
Project: American Dream Policy Demonstration (ADD)
Zhan, M., Sherraden, M., & Schreiner, M. (2002). Welfare recipiency and savings outcomes in Individual Development Accounts (CSD Working Paper No. 02-8). St. Louis, MO: Washington University, Center for Social Development.