ABSTRACT
The study of the American Dream Demonstration (ADD) has shown that the poor can save and accumulate assets in Individual Development Accounts (IDAs). ADD suggests that the possibility of saving and asset accumulation by the poor—even the very poor—cannot be dismissed. In ADD, deposits increased markedly in tax season, probably because IDA participants saved some of their tax refunds. Policy could facilitate this saving from tax refunds by allowing people to specify that refunds be split across a check and automatic transfers to multiple accounts. ADD also showed that the poor—whatever their characteristics—can save and accumulate assets in IDAs. ADD offers lessons for the design of an inclusive asset-based policy by showing how aspects of the institutional structure of IDAs were associated with savings outcomes. ADD demonstrated both a concept of asset-building by the poor and a mechanism for matched savings in the form of IDAs.
