UC Berkeley

Individual Development Accounts (IDAs) were instituted to provide low-income workers with similar institutional support for saving funds and acquiring assets as already exists for those with higher earnings (e.g. IRAs, 401(k)s, mortgage tax interest deductions). The federally-funded program was intended to usher in a new approach towards amelioration of poverty: one that transcends subsistence and fosters asset-building. This dissertation contributes to IDA research a comparative examination of immigrant and U.S. born participants in a San Francisco based IDA program. Immigrants have been part of the program from its inception, but this will be the first study that will explicitly consider this program's utility for this group. In doing so, it contributes to studies of immigrant integration programs.

In order to better understand the impact of IDAs regardless of nativity, the first article in this dissertation examines perceived changes in intensity of saving by participants who exited the program for whom a pre-IDA saving intensity could be determined (n=23). Unlike IDAs originally theorized, implemented IDAs are a time-limited program. The question of whether mere exposure to an institutional structure that facilitates saving (through matching, training, and rules encouraging deposits and discouraging withdrawals) is sufficient to create ongoing intensification of saving beyond program exit has not yet been studied. I find that exposure does intensify saving for many, but those who reported not saving before the program tended to revert to not saving after the program. This suggests that ongoing institutional structure could better promote saving.

The second article explores the question of how participants use the IDA program towards the asset goal of housing, particularly in a context of high housing prices (n=12). This study is the first to explore IDAs as part of a larger context of asset-building programs and personal strategies. I find that an additional benefit of IDAs is in the linking with other agents, e.g. through its mandate that participants finish HUD-certified training meant to diminish risk for those making their first time home purchase. IDA funding is insufficient to fund home purchase in any significant way. Funding from other down-payment assistance programs appears largely missing. Successful home buyers tended to make use of unusual opportunities to intensely save money towards their purchase.

The final chapter addresses differences between immigrant and U.S. born IDA participants. The final sample participating in this study (N=54) was evenly divided between the two groups. Immigrants were interviewed in Spanish, Cantonese, or English. Screening procedures and in-depth interviews were used to determine if nativity matters for likelihood of asset acquisition, changes in saving intensity, and perceptions of the program. No differences between the groups were found, with the exception of language barriers mentioned by immigrants.