Financial outcomes of interventions designed to improve financial capability through individual development accounts: A systematic review.

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Abstract

Purpose: Driven by a desire to improve the financial well-being of lower-income households, financial capability interventions are gaining attention in practice and public policy. IDAs are a financial capability intervention designed to build family assets through incentivized savings. Method: This systematic review focuses on financial capability interventions that provide Individual Development Accounts (IDAs), a restricted-used savings account paired with financial education. Eligible studies included financial education and a matched saving account to be used for a financial asset purchase. Results: Three large research projects with multiple studies and one additional unique study published through May 2020 were eligible for study inclusion. Results suggest that, thus far, there is mixed evidence on IDAs effects on financial behaviors or financial outcomes. Conclusion: Our review suggests the need for additional studies that use rigorous research designs that investigate the IDAs effects on financial behaviors and outcomes.

Citation

Relevant Evidence Summaries

The evidence was reviewed and included in the following summaries: 

What works to improve people’s financial capability?

Limited but strong evidence supports financial capability interventions. Studies with low-income populations find that financial capability interventions lead to numerous positive outcomes such as increased income and savings, better job placement and retention, higher credit scores, and progress toward financial self-sufficiency.   Certain characteristics of financial capability interventions can enhance their effectiveness. Bundled or integrated…

About this study

AGE: Adults

DIRECTION OF EVIDENCE: Inconclusive or mixed impact

FULL TEXT AVAILABILITY: Paid

HOST COUNTRY: United States

HOST COUNTRY INCOME: High

INTERVENTION DURATION: Various

INTERVENTION: Individual development accounts (IDA)

OUTCOME AREA: Economic Empowerment

OUTCOME AREA: Financial Capabilities

REGION OF ORIGIN OF PARTICIPANT(S): North America

STRENGTH OF EVIDENCE: Strong

TYPE OF STUDY: Systematic review

YEAR PUBLISHED: 2022

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