Individual Development Accounts (IDAs) are a new policy instrument designed to help the poor save and accumulate assets. IDAs provide matches for savings used for home purchase, post-secondary education, or microenterprise. IDAs cannot help participants, however, if they drop out. What determines drop-out, and what can be done to help participants to stay in? Three findings emerge from an analysis of IDAs in the American Dream Demonstration. First, drop-out depends more on transaction costs and previous debt than on income. Second, program design --and match rates in particular--affect drop-out risk. Third, drop-out can be predicted with some accuracy, so IDA programs could use statistical targeting to identify candidates for special preventive attention before they drop out.
Schreiner, M., & Sherraden, M. (2002). Drop-out from Individual Development Accounts: Prediction and prevention (CSD Working Paper No. 02-2). St. Louis, MO: Washington University, Center for Social Development.
American Dream Policy Demonstration (ADD)
ADD, American Dream Demonstration, IDA, drop-out, individual development account
Schreiner, Mark, "Drop-Out From Individual Development Accounts: Prediction and Prevention" (2002). Center for Social Development Research. 186.