Racial Differences in Savings and Assets Accumulation in IDAs: Implications for Homeownership

Author: Michal Grinstein-Weiss

Dissertation School: Washington University

Abstract:

A key indicator of racial inequality in the United States is the different rates in homeownership between Whites and Blacks. Recently, a wide variety of public policies have been developed to promote homeownership among African Americans. One policy to encourage savings and accumulate assets in general, and homeownership in particular, is the Individual Development Accounts (IDA). The purpose of this study is to examine the experience and outcomes of African-American people involved in the IDA programs. More specifically the following main questions will be addressed:

• What are the specific and unique experiences of African Americans in the IDA program and are they different from the experiences of Whites?
• Is there a difference in savings outcomes between African Americans and Whites in IDAs?
• What are the policy implications that will promote assets and homeownership for African Americans?

Without assets development policies that focus on providing equal opportunities to everyone to save and accumulate assets, only a few low-income families will have the opportunity, incentives, and institutional support to save and to attain homeownership. The challenge policymakers face today is to promote inclusive policies that promote assets accumulation among all income and racial groups.

Developing an understanding of the patterns of assets accumulation in IDAs is an important step toward development of public policy that can result in progress toward closing the gap between Blacks and Whites in homeownership and wealth accumulation.

Back to Search Result of EDSRG Dissertations