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Project Description

Using micro level data from the Panel Study of Income Dynamics, this study examines the impact of new savings incentives that were implemented as part of the overhaul of US policy during the mid-1990s on the savings of households at risk of entering welfare. The TANF program devolved responsibility of program rules to the states, and many states have responded by relaxing liquid asset and vehicle limits that determine program eligibility, by introducing targeted Individual Development Accounts whose contributions do not count against program eligibility, and by introducing time limits on benefit receipt.

Specifically, researchers will address the following questions:
1. Has saving increased among those low-income households who reside in states that have increased the liquid-asset and vehicle equity limits for program eligibility?
2. Has saving increased among those low-income households who reside in states that have introduced Individual Development Accounts?
3. What is the impact of time-limited benefits on household savings?
4. Are there differences by race, marital status, and poverty status to the new saving incentives?

Project duration: - Jul 2001

Sites studied include Nationwide

Sample Characteristics and Sites Studied

n= 4802 individuals from the 1988-1999 PSID ( n= 2,930 of the Survey Research Center's random sample of the US general population; n=1872 from the Survey of Economic Opportunity's sample of low income populations )

Recent Findings in Brief

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