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Individual Development Accounts (IDAs)

Evidence Rating

Mixed Evidence

Health Factors

Decision Makers

Individual Development Accounts (IDAs) are subsidized asset accumulation programs for low and moderate income individuals and families. Participants deposit money into an IDA and savings are matched by program sponsors. To retain matching funds, withdrawals from the IDA must be used for qualified expenditures such as education, small business development, or home purchase. Programs are often sponsored by government agencies and run and funded through partnerships between financial institutions and nonprofit organizations that already provide services to potential participants. Programs often focus on families with young children, people with disabilities, domestic violence survivors, and Native American or refugee communities.

Expected Beneficial Outcomes (Rated)

  • Increased asset accumulation

Other Potential Beneficial Outcomes

  • Reduced foreclosure

  • Increased college enrollment

Evidence of Effectiveness

There is mixed evidence about the effects of Individual Development Accounts (IDAs) on asset development. IDAs appear to facilitate modest asset accumulation in the short-term among some low income households, especially those with particularly low wealth (Urban-Mills 2016, Huang 2010a, Richards 2011); however, overall, IDA participation does not appear to increase assets and savings over the long-term (, , ). In some cases, IDA participation may reduce the likelihood of foreclosure (Urban-Rademacher 2010) and increase post-secondary enrollment among those saving for higher education (). However, an assessment of participants in Tulsa, OK, suggests no effects, positive or negative, on mental health 10 years after initial participation (). Additional evidence is needed to confirm effects.

High intensity IDA programs may not be cost-effective means of encouraging saving; an evaluation of one of the American Dream Demonstration sites, a four-year, county-level IDA program in Tulsa, OK, estimates an average of $3 in program costs for every $1 saved by the 471 participants (WU CSD-Schreiner 2004).

Impact on Disparities

Likely to decrease disparities

Implementation Examples

The federal Assets for Independence program, authorized in 1998, has historically been the largest source of IDA funding in the US, supporting programs in 49 states and the District of Columbia through competitive grants (). However, funding has been suspended for fiscal year 2017 (US DHHS-AFI Resource Center).

As of 2014, 42 states have authorized IDA programs, either through legislation or administrative action (CFED 2014). Only 13 states and the District of Columbia have funded programs as of 2016 (Prosperity Now-State IDA).

Non-governmental organizations can support IDAs; for example, the Jim Casey Youth Opportunities Initiative’s Opportunity Passport IDA program provides funding for programs for youth transitioning out of foster care in many states (Urban-Edelstein 2014).

Implementation Resources

CBPP-McNichol 2004 - McNichol L, Springer J. State policies to assist working-poor families. Washington, DC: Center on Budget and Policy Priorities (CBPP); 2004.

US DHHS-AFI Resource Center - US Department of Health and Human Services (US DHHS), Administration for Children & Families (ACF). Assets for Independence (AFI) Resource Center.

Prosperity Now-IDA design - Prosperity Now. IDA program design.

Prosperity Now-IDA program map - Prosperity Now. Find an IDA program.

Citations - Evidence

* Journal subscription may be required for access.

Huang 2010a - Huang J. Effects of Individual Development Accounts (IDAs) on household wealth and saving taste. Research on Social Work Practice. 2010;20(6):582-90.

Urban-Rademacher 2010 - Rademacher I, Wiedrich K, Ratcliffe C, Gallagher M. Weathering the storm: Have IDAs helped low-income homebuyers avoid foreclosure? Washington, DC: Corporation for Enterprise Development (CFED), Urban Institute; 2010.

Grinstein-Weiss 2013* - Grinstein-Weiss M, Sherraden M, Gale WG, et al. Long-term effects of Individual Development Accounts on postsecondary education: Follow-up evidence from a randomized experiment. Economics of Education Review. 2013;33:58–68.

Richards 2011 - Richards KV, Thyer BA. Does Individual Development Account participation help the poor? A review. Research on Social Work Practice. 2011;21(3):348–62.

WU CSD-Schreiner 2004 - Schreiner M. Program costs for Individual Development Accounts: Final figures from CAPTC in Tulsa. Saint Louis: Center for Social Development, George Warren Brown School of Social Work, Washington University in St. Louis; 2004.

Shobe 2017* - Shobe MA, Christy K, Givens A, Murphy-Erby Y, Rand A. Savings program participation and outcomes for Hispanics. Journal of Ethnic & Cultural Diversity in Social Work. 2017;26(3):185-203.

Urban-Mills 2016 - Mills GB, McKernan SM, Ratcliffe C, et al. Building savings for success: Early impacts from the Assets for Independence program randomized evaluation. Washington, DC: The Urban Institute; 2016.

Grinstein-Weiss 2015a* - Grinstein-Weiss M, Sherraden M, Gale WG, et al. Effects of an individual development account program on retirement saving: Follow-up evidence from a randomized experiment. Journal of Gerontological Social Work. 2015;58(6):572-589.

Rohe 2017* - Rohe WM, Key C, Grinstein-Weiss M, Schreiner M, Sherraden M. The impacts of individual development accounts, assets, and debt on future orientation and psychological depression. Journal of Policy Practice. 2017;16(1):24-45.

Rothwell 2013* - Rothwell DW, Sultana N. Cash-flow and savings practices of low-income households: Evidence from a follow-up study of IDA participants. Journal of Social Service Research. 2013;39(2):281-292.

Citations - Implementation Examples

* Journal subscription may be required for access.

Urban-Edelstein 2014 - Edelstein S, Lowenstein C. Supporting youth transitioning out of foster care, issue brief 2: Financial literacy and asset building programs. Washington, DC: The Urban Institute; 2014.

CFED 2014 - Corporation for Enterprise Development (CFED). Resource guide: State IDA program support. 2014.

US DHHS-AFI Resource Center - US Department of Health and Human Services (US DHHS), Administration for Children & Families (ACF). Assets for Independence (AFI) Resource Center.

Prosperity Now-State IDA - Prosperity Now. Individual development accounts (IDA): What states can do.

Rohe 2017* - Rohe WM, Key C, Grinstein-Weiss M, Schreiner M, Sherraden M. The impacts of individual development accounts, assets, and debt on future orientation and psychological depression. Journal of Policy Practice. 2017;16(1):24-45.

Date Last Updated

Aug 23, 2017