Racial differences in performance in a matched savings program

This study examines the performances of low income African Americans in Individual Development Accounts (IDAs), a matched saving program. Using data from the American Dream Demonstration (ADD) (N = 2,364), this study compares the savings performances of black and white participants in IDAs. The results indicate that low-income African Americans save in IDAs; however, they are saving smaller amounts than Caucasians. Results of separate tobit regression analyses for blacks and whites indicate that more individual characteristics are associated with savings among Caucasians. In contrast, more institutional characteristics are associated with savings among African Americans. Implications for policymakers and program administrators are given.