Brief Do Welfare and IDA Program Policies Affect Asset Holdings?
Signe-Mary McKernan, Caroline Ratcliffe, Yunju Nam
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This brief presents an empirical analysis of how asset tests affect families asset holdings. The findings suggest that more lenient asset tests and more generous IDA program rules can lead families to increase their asset holdings. Relaxed vehicle asset limits, for example, are associated with increased vehicle ownership. Since people often need a reliable car to get to work, this finding suggests that exempting at least one vehicle in all states may increase employment and job stability among low-income families. The findings also suggest that restrictions on withdrawals and incentives built into restricted asset accounts and IDA programs may provide families with motivation to build assets.
Research Areas Economic mobility and inequality Wealth and financial well-being Families Social safety net
Tags Low-Income Home Energy Assistance Program (LIHEAP) Asset and debts Temporary Assistance for Needy Families (TANF) Economic well-being Hunger and food assistance Income and wealth distribution Opportunity and ownership Financial stability