Michal Grinstein-Weiss

Material Hardship in U.S. Families Raising Children with Disabilities

Researchers analyzed the 2002 wave of the National Survey of Americas Families, conducted by the Urban Institute and Child Trends, and examined material hardship in families raising children with disabilities. Measures of hardship included food insecurity, housing instability, health care access, and telephone disconnection. The research indicated that families of children with disabilities experienced significantly greater hardship than did other families. As family income rose above the federal poverty level, hardship declined sharply for families of children without disabilities but not for families raising children with disabilities. Thus, the U.S. federal poverty level was found to be a particularly poor predictor of hardship for families raising children with disabilities. Finally, among families of children with disabilities, single-mother and cohabiting-partner families particularly were at risk for experiencing severe hardship. This article also discusses policy and advocacy implications.

Financial Education and Savings Outcomes in Individual Development Accounts

Individual Development Accounts (IDAs) are subsidized savings accounts. Unlike other subsidized savings accounts such as Individual Retirement Accounts (IRAs) or 401(k) plans, IDAs are targeted to the poor, provide subsidies through matches rather than through tax breaks, and require participants to attend financial education. Participants accrue matches as they save for purposes that build assets that increase long-term well-being and financial self-sufficiency. Matched uses of withdrawals typically include home purchase, post-secondary education, and microenterprise. The purpose of this study is to examine the relationship between the hours of financial education attended by IDA participants and savings outcomes. The data are from the Downpayments on the American Dream Policy Demonstration (ADD). The goal of financial education is to make people more aware of financial choices and possible consequences. IDA programs require financial education, but there is no systematic/scientific evidence that this requirement is essential. As of June 30, 2000, 81 percent of the 2,378 participants in ADD had attended general financial-education classes. Most participants (65 percent) had one to twelve hours of attendance recorded, 16 percent had 13 hours or more, and 14 percent were recorded as having no hours. Mean attendance was 10.4 hours, with a low of zero and a high of 35. To measure the association between attendance at financial education and savings outcomes, we used a Heckman two-step regression in which the first step predicted exit from the IDA program (and thus a high likelihood of a low opportunity for attendance at financial education). The second step predicted average monthly net deposit (AMND) for those participants who did not exit, controlling for length of participation and a wide range of other factors that might affect AMND. These results broadly suggest that between 0 and 12 hours of financial education have large, positive effects on savings (in the range of one dollar of AMND for each hour of general financial education up to 12 hours). After that point, the effects leveled off. Results for asset-specific education were similar. In short, financial education seems to have had large effects on savings outcomes.

Assets beyond Savings in Individual Development Accounts

This study examines whether participation in Individual Development Accounts (IDAs) provides low‐income participants with significant accumulation in assets beyond matched savings. Using a longitudinal experimental research design, the study tests whether the experiment affects accumulation in five types of assets: liquid assets, other financial assets, total financial assets, real assets, and total assets. Results show that the experimental and control groups do not differ to a statistically significant degree on the five measures. Because implausibly extreme values can influence statistical results, effects on asset accumulation are also estimated in models that delete the most extreme values. Results from these models suggest that IDA participants, at a marginally significant level, gain more real assets and total assets than do members of the control group at this stage of the experiment.

HOMEOWNERSHIP AND NEIGHBORHOOD SATISFACTION AMONG LOW- AND MODERATE-INCOME HOUSEHOLDS

ABSTRACT: Most research on homeownership is conducted on nationally representative samples of homeowners and fails to isolate the unique experience of low- and moderate-income (LMI) homeowners. Given the interest of policymakers in promoting homeownership among LMI households over the past 20 years, along with the apparent role played by risky borrowers—many of whom are low-income—in the current housing market crisis, it is important to evaluate both economic and social outcomes for this subgroup of homeowners. Using a matched set of LMI owners and renters in the 2007 Community Advantage Program (CAP) panel, we assess the effect of homeownership on neighborhood satisfaction. By including various individual and neighborhood characteristics as covariates, we employ multilevel modeling and propensity score matching to address the nested structure of the data and endogeneity issues. Findings indicate that homeownership is an important predictor of neighborhood satisfaction among LMI households, even when controlling for a host of socioeconomic, demographic, and neighborhood characteristics. This may suggest that homeownership can serve as a viable way to improve neighborhood satisfaction among LMI households. This is important as neighborhood satisfaction is highly associated with overall quality of life.

Fostering Low-Income Homeownership through Individual Development Accounts: A Longitudinal, Randomized Experiment

Abstract For low‐income families, homeownership represents an important strategy for promoting long‐term social and economic development. Individual Development Account (IDA) programs facilitate saving toward assets such as a home through matching, financial education, and case management. Using longitudinal experimental data from the American Dream Demonstration, this study examines the impact of IDA participation on homeownership rates and on clearing old debts. Low‐income participants were interviewed after 18 months (Wave 2) and after program completion at 48 months (Wave 3). Logistic regression results indicate that among those who were renters at baseline, IDA participation significantly increases the clearing of old debts at Wave 2 and homeownership rates at Wave 3. IDA participants with cleared debt activity had the highest probability of becoming homeowners at Wave 3 (32 percent), while those who were not IDA participants and did not have such activity had only a 9.6 percent probability.

Asset Building in Rural Communities: The Experience of Individual Development Accounts.

This study examines the unique experiences of low-income rural participants in an asset building program-the Individual Development Account. Using data from the American Dream Demonstration, this study addresses three main questions: (1) What are the individual characteristics associated with saving outcomes among rural IDA participants? (2) What are the program characteristics associated with savings among rural participants? (3) What are the policy implications for supporting asset building in rural areas? To answer these questions we conduct an Ordinary Least Squares regression analysis. The results suggest that low-income rural participants have the ability and willingness to save toward the accumulation of assets in IDAs. Looking at individual characteristics, home ownership appears to be an important predictor of savings. In addition, this study suggests that program characteristics (financial education, peer group meetings, match rate, direct deposit, and monthly saving target), not merely individual characteristics, are important in explaining saving performance for this group.

Homeownership and Wealth among Low- and Moderate-Income Households

Using data from a set of low- and moderate-income homeowners who received prime mortgages through the Community Advantage Program panel and a matched set of renters, we assess the effect of sustained homeownership on net worth and components of net worth. In this article, our aim is to test the claim that, all else being equal, investing in and maintaining ownership of a home yield higher short-term increases in net worth and other measures of economic well-being than do renting and choosing other forms of investment and consumption. We attempt to isolate the effect of homeownership from the factors that cause both homeownership and increases in wealth using three matching approaches that address sample selection and endogeneity in the data. After balancing renters and owners on observed characteristics and adjusting for influential outlying cases, we find that low- and moderate-income homeowners experience greater short-run increases in net worth, assets, and nonhousing net worth than renters do. These findings are particularly interesting because the period of study coincides with the housing crisis, periods of shrinking home values, and declining equity in the housing market as a whole.

Parental Assets: A Pathway to Positive Child Educational Outcomes

A growing body of evidence suggests parental assets have positive effects on childrens well-being. Using 2004 data from the Survey of Income and Program Participation, this study tests the effect of parental asset holding on child educational outcomes, and explores whether parental involvement and expectations mediate this relationship. Results indicate that assets are a significant predictor of all child academic outcomes of our study; however, income is not a significant predictor for school outcomes when controlling for assets. The mediation analyses show the effect of assets on school outcomes is mediated by two of the three parenting measures: parental expectations and the number of parent-child breakfast days per week. We include implications for policy and practice.

Family Assets and Child Outcomes: Evidence and Directions.

For poor families, the possession of assets—savings accounts, homes, and the like—has the potential not only to relieve some of the stress of living in poverty but also to make a better future seem like a real possibility. If children in families that own certain assets fare better than children in families without them, then helping poor families build those assets would be an effective strategy for two-generation programs. Indeed, write Michal Grinstein-Weiss, Trina Williams Shanks, and Sondra Beverly, plenty of evidence shows that assets are connected to positive outcomes for poor children. For example, young people who have any college savings at all, even a very small amount, are more likely to go to college; children in households with assets score higher on standardized achievement tests; and children of homeowners experience fewer behavioral problems. But this evidence comes from longitudinal data sets and is therefore correlational. Looking for causal relationships, the authors examine the results of experimental programs that opened various types of savings accounts for poor people and matched their contributions. Several of these trials included a control group that did not receive a savings account, making it possible to attribute any positive outcomes directly to the savings accounts rather than to their owners’ personal characteristics. These programs dispelled the myth that poor people can’t save; participants were generally able to accumulate savings. It’s too early to tell, however, whether assets and asset-building programs have long-term effects on children’s wellbeing, though one experiment found positive impacts on disadvantaged children’s social-emotional development at age four. The most promising programs share several features: they are opened early in life; they are opened automatically, with no action required from the recipients; and they come with an initial deposit.

The Effect of Marital Status on Home Ownership among Low-Income Households

This research examines whether married low-income renters are more likely to become home owners than comparable single, low-income renters. To do so, it employs data from the Community Advantage Panel Study and discrete-time survival analysis with propensity-score matching. Results suggest that married couples buy homes at higher rates, and buy them more quickly, than do their unmarried counterparts. Estimates in models that use propensity-score matching are robust to the control of selection bias between the married and the unmarried groups. The findings suggest that efforts to encourage marriage among low-income couples may be associated with subsequent economic mobility through home ownership.