SaveUSA Evaluation

Last registered on December 07, 2016
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Pre-Trial

Trial Information

General Information

Title
SaveUSA Evaluation
RCT ID
AEARCTR-0001762
Initial registration date
December 07, 2016

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
December 07, 2016, 1:55 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region

Primary Investigator

Name
Gayle Hamilton
Affiliation
MDRC
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Stephen Freedman
PI Affiliation
MDRC
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2011-01-01
End date
2015-12-31
Keywords
Finance & Microfinance
Additional Keywords
asset-building, savings, tax-time savings, low-income and middle-income savings incentives, financial security, financial inclusion
JEL code(s)
D14
Secondary IDs
Abstract
Many U.S. households do not have enough savings to help them manage temporary losses of income or increased expenditures from unexpected events. Particularly for low- and moderate-income families, increased savings might help them avoid resorting to high-cost (sometimes "payday") loans or failing to meet monthly rent bills and minimum credit card payments. To support the buildup of savings, some experts have proposed encouraging low- and moderate-income individuals to save part of their annual tax refunds, capitalizing on these large, one-time influxes of cash. Some past research suggests that this approach might be promising; other research indicates that many low- and moderate-income individuals need their refunds to pay bills or reduce debt.

The SaveUSA evaluation, a randomized controlled trial launched by MDRC in 2011 and concluded in 2015, contributes strong evidence relating to several aspects of this debate. SaveUSA is a voluntary tax-time savings program. Through a 50 percent matching incentive, SaveUSA aims to make the accumulation of emergency savings more attractive to low- to moderate-income families. When filing their taxes, these households are presented the opportunity to directly deposit some or all of their tax refunds into special savings accounts, set up by a bank or credit union, and pledge to save between $200 and $1,000 of their deposit for about a year. Money can be withdrawn from the accounts at any time and for any purpose, but only those who maintain their initially pledged savings amount throughout a full year receive a 50 percent match on that amount. Account holders, irrespective of match receipt, can deposit tax refund dollars in subsequent years and become eligible to receive additional savings matches on their new tax refund deposits.

MDRC studied SaveUSA's implementation in four cities -- New York City, Tulsa, Newark, and San Antonio, and its longer-term effects on savings and other financial outcomes in two cities, New York City and Tulsa. In these latter cities, tax filers interested in SaveUSA in 2011 were randomly selected either to a group whose members were offered the opportunity to open a special savings account (the "SaveUSA group") or to a group that could not do so (the "Regular Tax Filers" group). The analysis compared the savings and other financial behaviors of these two groups over time to estimate SaveUSA's effects. The findings thus suggest the effects that savings policies structured similarly to SaveUSA's might have.

SaveUSA's operation and evaluation were supported by the Social Innovation Fund (SIF), a program of the Corporation for National and Community Service (CNCS). This particular SIF project was led by the Mayor's Fund to Advance New York City and the New York City Center for Economic Opportunity (CEO) in collaboration with MDRC. CEO and the New York City Department of Consumer Affairs Office of Financial Empowerment led SaveUSA program operations, and MDRC conducted the program's evaluation.

Key Findings

-- SaveUSA was successfully implemented in all four cities participating in the evaluation. About two-thirds of the SaveUSA group received at least one savings match during the three program years. Across the whole SaveUSA group (including those who did and did not receive a match), total match dollars averaged $365 over the three program years.
-- As of the 42-month follow-up point, SaveUSA had increased the percentage of individuals with any nonretirement savings by almost 8 percentage points and had increased the average total amount of savings held by $522, or 30 percent, above the average for the group that did not have access to a SaveUSA account. These effects were present even after most of the SaveUSA group no longer had access to a 50 percent match on savings.
-- The program led to improvements in some measures of financial security, such as having more cash available to pay for normal household expenses or for emergency or unexpected expenses, that were directly related to (and reflected) the program's savings increases. SaveUSA had no positive or negative effects on general indicators of financial security, including debt, financial net worth, and incidence of financial hardship.
External Link(s)

Registration Citation

Citation
Freedman, Stephen and Gayle Hamilton. 2016. "SaveUSA Evaluation." AEA RCT Registry. December 07. https://doi.org/10.1257/rct.1762-1.0
Former Citation
Freedman, Stephen and Gayle Hamilton. 2016. "SaveUSA Evaluation." AEA RCT Registry. December 07. https://www.socialscienceregistry.org/trials/1762/history/12295
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
SaveUSA began in 2011. Deposits into SaveUSA accounts continued through the 2013 tax-preparation season and savings matches continued through early 2014. A cumulative total of 17 Volunteer Income Tax Assistance (VITA) sites offered SaveUSA across the four participating cities. To be eligible for SaveUSA, tax filers had to be at least 18 years old and meet certain income requirements ($50,000 or less for filers with dependents, and generally $25,000 or less for filers without dependents).

On their tax returns, SaveUSA participants instructed the Internal Revenue Service (IRS) or state taxing agency to deposit at least $200 from their tax refunds directly into the special savings accounts. Each participant also pledged to keep a certain amount of the initial deposit, from $200 to $1,000, in the account until the following February 1. A participant who fulfilled this pledge received a 50 percent match, up to $500, on the pledged savings amount.
Intervention Start Date
2011-01-01
Intervention End Date
2014-06-30

Primary Outcomes

Primary Outcomes (end points)
Short-term: Incidence of deposit of portions of tax refund into savings, amount of deposit of tax refund into savings, presence and amount of nonretirement savings.
Long-term: presence and amount of nonretirement savings, presence and amount of retirement savings, presence and amount of cash available to pay for emergency or unexpected expenses, presence and amount of debt, and incidence of financial hardship.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The program's impacts were measured in New York City and Tulsa (OK), where enrollees were randomly assigned to either the SaveUSA group (eligible to open a SaveUSA account) or the Regular Tax Filers group (not eligible to do so). The evaluation compared the savings and other financial behaviors of these two groups over a 42-month follow-up period to estimate SaveUSA's effects.

The Newark (NJ) and San Antonio (TX) locations did not participate in the randomized controlled trial; however, MDRC analyzed data from those cities along with data from the other two to evaluate the implementation of the program.

Five banks and one credit union voluntarily participated in SaveUSA and set up SaveUSA accounts. Staff members from these partnering financial institutions facilitated the on-site opening and continuing maintenance of the SaveUSA accounts, but the institutions were not required to determine savings match eligibility or match amounts. MDRC performed these functions, by analyzing periodic data files shared by the financial institutions with MDRC.

MDRC used the following data sources to evaluate the SaveUSA program:
-- Baseline surveys
-- 18-month and 42-month follow-up surveys
-- Tax return data
-- SaveUSA account activity and balance data from the participating financial institutions
-- Interviews with VITA staff members
-- Observations of program operations
Experimental Design Details
Randomization Method
MDRC computer program
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1,577 individuals for the impact analysis (randomized controlled design); about 2,500 individuals for the implementation analysis
Sample size: planned number of observations
1,577 individuals for the impact analysis
Sample size (or number of clusters) by treatment arms
783 individuals control, 794 individuals treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
MDRC Institutional Review Board
IRB Approval Date
2010-12-15
IRB Approval Number
Details not available
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
June 30, 2014, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
December 31, 2015, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
1,577 individuals
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
1,577 individuals
Final Sample Size (or Number of Clusters) by Treatment Arms
783 individuals control, 794 individuals treatment
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
SaveUSA, a voluntary program launched in 2011 in four cities (New York City, Tulsa, San Antonio, and Newark), encourages low- and moderate-income individuals to set aside money from their tax refund for savings. Tax filers at participating Volunteer Income Tax Assistance (VITA) sites can directly deposit all or a portion of their tax refund into a special savings account, set up by a bank or credit union, and pledge to save between $200 and $1,000 of their deposit for about a year. Money can be withdrawn from SaveUSA accounts at any time and for any purpose, but only those who maintain their initially pledged savings amount throughout a full year receive a 50 percent match on that amount. Account holders, irrespective of match receipt, can deposit tax refund dollars in subsequent years and become eligible to receive additional savings matches on their new tax refund deposits.

This report presents findings on SaveUSA’s implementation in all four cities and its early effects on savings and other financial outcomes in two cities: New York City and Tulsa. In these latter cities, a randomly selected half of the tax filers who were interested in SaveUSA in 2011 could open accounts (the “SaveUSA group”), but the other half could not (the control group). The report compares the savings and other financial behaviors of the two groups over time to estimate SaveUSA’s effects. The findings thus suggest the effects that savings policies structured similarly to SaveUSA might have.

SaveUSA’s operation and evaluation are funded through the federal Social Innovation Fund (SIF), a public/private partnership administered by the Corporation for National and Community Service. This particular SIF project is led by the Mayor’s Fund to Advance New York City and the NYC Center for Economic Opportunity (CEO) in collaboration with MDRC. Matching funds required by the SIF were provided by several foundations and organizations. CEO, with the New York City Department of Consumer Affairs Office of Financial Empowerment (OFE), which conceived and launched an early version of the model, leads SaveUSA operations; MDRC is conducting the program’s evaluation.

Key Findings

-- SaveUSA was implemented successfully in all four cities. During the first program year, individuals in the SaveUSA group directly deposited an average of $506 of their tax refunds into SaveUSA accounts.
-- About two-thirds of those in the SaveUSA group saved for about a year and received a first savings match, which averaged $291 among those who received it. About two-fifths of the SaveUSA group pledged to save part of their tax refund again in the program’s second year.
-- At the 18-month follow-up point, SaveUSA had increased the percentage of individuals with any short-term savings (by 7 percentage points) and increased the total amount of savings individuals held on average (by $512), compared with what they would have saved without the program. The program also had increased the proportion of those who expressed a continued commitment to save.
-- No effects were found on individuals’ amount of debt, material hardship, or other aspects of financial security over the 18-month follow-up period.
Citation
Azurdia, Gilda, Stephen Freedman, Gayle Hamilton, and Caroline Schultz. 2014. Encouraging Low- and Moderate-Income Tax Filers to Save: Implementation and Interim Impact Findings from the SaveUSA Evaluation. New York: MDRC.
URL
http://www.mdrc.org/publication/encouraging-low-and-moderate-income-tax-filers-save
Abstract
Launched in 2011, SaveUSA encourages low- and moderate-income individuals to set aside money from their tax refund for savings. Tax filers at participating Volunteer Income Tax Assistance (VITA) sites can directly deposit all or a portion of their tax refund into a special savings account, set up by a bank or credit union, and pledge to save between $200 and $1,000 of their deposit for about a year. Money can be withdrawn from the accounts at any time and for any purpose, but only those who maintain their initially pledged savings amount throughout a full year receive a 50 percent match on that amount. Account holders, irrespective of match receipt, can deposit tax refund dollars in subsequent years and become eligible to receive additional savings matches on their new tax refund deposits.

This report presents findings on SaveUSA's implementation in four cities--New York City, Tulsa, Newark, and San Antonio--and on its longer-term effects on savings and other financial outcomes in two cities, New York City and Tulsa. In these latter cities, tax filers interested in SaveUSA in 2011 were randomly selected either to a group whose members were offered the opportunity to open a special savings account (the "SaveUSA group") or to a group that could not do so (the "Regular Tax Filers" group). The report compares the savings and other financial behaviors of these two groups over time to estimate SaveUSA's effects. Its findings thus suggest the effects that savings policies structured similarly to SaveUSA's might have.

SaveUSA's operation and evaluation were supported by the Social Innovation Fund (SIF), a program of the Corporation for National and Community Service (CNCS). This particular SIF project has been led by the Mayor's Fund to Advance New York City and the New York City Center for Economic Opportunity (CEO) in collaboration with MDRC. CEO and the New York City Department of Consumer Affairs Office of Financial Empowerment led SaveUSA program operations, and MDRC conducted the program's evaluation.

Key Findings

-- SaveUSA was successfully implemented in all four cities. About two-thirds of the SaveUSA group received at least one savings match during the three program years. Across the whole SaveUSA group, total match dollars averaged $365 over the three program years.
-- As of the 42-month follow-up point, SaveUSA had increased the percentage of individuals with any nonretirement savings by almost 8 percentage points and had increased the average total amount of savings held by $522, or 30 percent, above the average for the group that did not have access to a SaveUSA account. These effects were present even after most of the SaveUSA group no longer had access to a 50 percent match on savings.
-- The program led to improvements in some measures of financial security, such as having more cash available to pay for normal household expenses or for emergency or unexpected expenses, that were directly related to (and reflected) the program's savings increases. SaveUSA had no positive or negative effects on general indicators of financial security, including debt, financial net worth, and incidence of financial hardship.
Citation
Azurdia, Gilda, and Stephen Freedman. 2016. Encouraging Nonretirement Savings at Tax Time: Final Impact Findings from the SaveUSA Evaluation. New York: MDRC.
URL
http://www.mdrc.org/publication/encouraging-nonretirement-savings-tax-time

Reports & Other Materials