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Learning from Individual Development Accounts

Learning from Individual Development Accounts

(p.280) Chapter Ten Learning from Individual Development Accounts
Overcoming the Saving Slump
Michael Sherraden, Ray Boshara
University of Chicago Press

This chapter argues that financial education proves to be effective when several hours and sessions of financial education are offered. One to ten hours of education is positively linked with average monthly net deposits, but there is no discernable relationship after ten hours. Thus, the payoff in financial education may be only in the first ten hours. Incentives in an economic sense may not be the most important factor in increasing saving. Saving outcomes result from the interaction of individual and institutional characteristics. Research on individual development accounts had impacts on policy development. Positive effects of financial education may plateau at some point, while other factors may continue to be influential. Regarding practical application, financial education should not be a stand-alone, but should be embedded in other systems and financial services that can improve successful delivery, especially to those who may need it most.

Keywords:   financial education, monthly net deposits, saving, incentives, individual development accounts, policy development, financial services

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