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Income, Institutions, And Saving Performance In Individual Development Accounts, Michael Sherraden, Mark Schreiner, Sondra Beverly

Center for Social Development Research

This paper examines the relationship between income and saving performance in Individual Development Accounts (IDAs). We first discuss theories of saving. Next, for IDA participants in the American Dream Demonstration, we look at income sources and distribution, followed by tabulations of income and savings outcomes. Following this, we discuss results from regression analyses on savings outcomes. We find that savings amount did not increase with income and that the savings rate decreased with income. Although the data do not reveal exactly what caused this, we believe that institutional factors in IDA programs played an important role.