Saving Patterns and Probability of Success in Individual ...

Saving Patterns and Probability of … 4
Studying the behavior of post-secondary IDA savers, Zhan and Schreiner (2005) concluded that
married "education savers" saved much less than other married participants. They also
demonstrated that single men saved more than both single women, and married men. Married
women saved the least among the four groups. According to the authors, it follows therefore that
women, especially married women, face more barriers to pursue postsecondary education.
Finally, when looking at all three areas of the IDA program, Grinstein-Weiss, et. al. (2006)
found evidence in support of generally higher savings levels among married vs. unmarried IDA
participants. Perhaps this somewhat contradictory finding suggests that married participants are
committed more to investing in business and homeownership than education. Other studies have
also demonstrated positive outcomes resulting from institutional factors such as the use of direct
deposit facility and provision of financial literacy training (see for example Schreiner, [2001],
and Zhan and Schreiner [2005]).
An ample body of literature has formed around analyzing the demographic attributes of savers
and their impact on savings outcomes in IDA programs. However, more research is needed to
assess the impact of other structural factors on IDA savings outcomes such as conditions set
forth in a typical IDA savings plan agreement, including the required frequency of deposits,
length of the saving period, existence or lack thereof a minimum required deposit, and maximum
lifetime matched savings limits. From a program design perspective, these can be important in
shaping participants’ behavior in an IDA program. If a program stipulates a minimum lifetime
savings limit, then reaching that limit becomes an important milestone in assessing success.
Clearly, a combination of all of the above determines, at least in part, the percentage of
successful participants who complete their savings in an IDA program. However, it is often
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