Saving Patterns and Probability of Success in Individual ...

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Saving Patterns and Probability of … 6 estimation are also discussed in that section. Final comments and conclusion are discussed in section 5. 2. An Overview of UWGLA’s IDA Program Since 2001, UWGLA has received three five-year Assets for Independence (AFIA) grant awards. The UWGLA IDA network is composed of 24 IDA program partners throughout Los Angeles County that are charged with enrolling and case managing accounts. Table 1 shows the main features of the UWGLA’s IDA program. Maximum time limit of savings is 24 months. 4 With average monthly deposits of $42 to $83, participants are expected to complete their $1000 savings within 12-18 months in the microenterprise program. Similarly, in the homeownership program, with average monthly deposits of $75 to $100, participants can complete their $1800 minimum savings limit within 18-24 months. Match rate is the same (2:1) across all program areas. 5 Table 2 provides information on the overall performance of the UWGLA’s IDA program in terms of enrollments and asset purchases. By 06/30/2005, program partners had helped 833 participants open their IDA accounts, of which 66% were females. 6,7 Almost 69% of all accounts were in the homeownership program. 8 While the first ever IDA deposit by a program participant was made in February of 2002, a cursory review of the numbers in Table 2 reveals that the bulk of enrollments took place in 2004 with 391 new accounts opened in that year alone. In other words, 46% of all accounts were opened in 2004. For this reason, even after 4 years since the start of the program, by 06/30/2005, the cutoff date of our sample, a typical IDA client had only spent an average of 14 months in the program. 6
Saving Patterns and Probability of … 7 3. Saving Patterns Table 3 summarizes the savings characteristics of UWGLA’s IDA participants as of 06/30/2005. Starting from the leftmost column, the table lists partner agencies (identified by numbers only) with the homeownership partners on the top rows, followed by a “Total HO” row that reports the total number of homeownership accounts in column two and average values in the rest of the columns for this group of partners. The microenterprise IDA partners are listed on the bottom of the table followed by their total/average row, dubbed Total ME. The second column on the left shows the number of accounts ever opened- including the ones that have already been closed due to termination or asset purchase. For each agency, the number in column three lists per-person average savings based on account activity through 06/30/2005. This column only includes matched portion of participants’ deposits. In other words, for individuals who have saved beyond their required matched savings limit, only the matched portion has been included to show a better picture of average savings compared to the matched limit. An average of total months spent by participants in each program is shown in column four. This number is different than the average number of months participants needed to complete their savings. That information is shown in column 5. The numbers in columns four and five will be the same for participants who are still saving. For participants who have completed their savings but have not yet acquired assets and so are still in the program, the number in column four will be greater than the number in column five. For example if John Smith opened his IDA account in July of 2004 and completed his savings in May of 2005, by 06/30/05 he had spent 12 months in the program (column 4), while his effective months of saving were only 11 months (column 5). Column 6 shows the average number of times participants made deposits while in the program. 7
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