Saving in ADD: Measures from MIS IDA

Can the poor save? Data collected with the Management Information System for Individual Development Accounts (MIS IDA) in the American Dream Demonstration (ADD) show that they can. About half of participants had net IDA savings of more than $100, and monthly savings averaged $16.60. While participant characteristics were linked with IDA savings, no single characteristic (such as receipt of welfare or very low income) precluded saving. More relevant for policy is that several aspects of IDA design—including the match rate, match cap, time limits, use of automatic transfer, financial education, and restrictions on unmatched withdrawals—were strongly linked with saving. Overall, it seems that institutions for saving, when offered to the poor, work much like they do for the non-poor.