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Attitudes and Saving in Individual Development Accounts: Latent Class Analysis

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Abstract

This exploratory study focuses on classifying attitudes toward institutional features of Individual Development Accounts (IDAs). The study also examines the extent to which attitudes change and how they are associated with saving in IDAs. While attitudes toward IDAs were generally positive, latent class analysis (LCA) found three groups at Wave 3: highly positive, moderately positive, and mixed opinion. The study found dynamic changes in attitudes at 18 months and 48 months after the baseline interview. While 63% of participants showed no changes in attitudes, 22% changed their attitudes negatively and 15% positively. Participants with highly positive attitudes at both 18 months and 48 months had significantly more savings than participants without highly positive attitudes, suggesting that attitudes may influence saving outcomes in IDAs.

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Acknowledgments

The authors would like to thank the following foundations for support of this article: the Ford Foundation, Charles Stewart Mott Foundation, FB Heron Foundation, and Metropolitan Life Foundation for funding the American Dream Demonstration (ADD); the Corporation for Enterprise Development for implementing the ADD; the Center for Social Development for managing research projects and monitoring data. We also thank Julia Stevens and Carrie Freeman for editing the paper. In addition, we appreciate valuable comments from the editor and two anonymous reviewers.

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Authors and Affiliations

  1. Department of Social Work, National University of Singapore, Blk AS3, Level 4, 3 Arts Link, Singapore, 117570, Singapore

    Chang-Keun Han

  2. George Warren Brown School of Social Work, Washington University in St. Louis, One Brookings Drive, Campus Box 1196, St. Louis, MO, 63130, USA

    Michael Sherraden

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  1. Chang-Keun Han
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  2. Michael Sherraden
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Correspondence to Chang-Keun Han.

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Han, CK., Sherraden, M. Attitudes and Saving in Individual Development Accounts: Latent Class Analysis. J Fam Econ Iss 30, 226–236 (2009). https://doi.org/10.1007/s10834-009-9157-8

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