Methods: Data for this study are from the first surveyed cohort of SaveNYC study participants. SaveNYC is a tax time savings program that invited tax filers at select New York City Volunteer Income Tax Assistance (VITA) sites to deposit some portion of their refund into a savings account. If participants were able to leave the money in the account for an entire year, their balance was matched at a rate of 50 cents for every dollar, up to a limit. Participants in the program and a comparison group drawn from non-participating VITA sites were surveyed at baseline and again one year later. Comparison of the two groups revealed some differences in important predictors at baseline, so subsequent analyses use propensity score weighting to compensate for these initial differences. Regression analyses were conducted to predict presence of savings, amount of savings, and perception of financial security from treatment and important covariates such as demographic variables and prior financial well-being.
Results: Results suggest that the SaveNYC program had a small but meaningful effect on participants. Compared to non-participants, SaveNYC participants were more likely to have some savings (even after earning the match and having their accounts closed) and had a higher volume of savings. In addition, participants were more likely than comparison group members to report feeling that they could get by on their savings for at least one month without income.
Conclusions and Implications: The findings of this study suggest that tax-time savings program can successfully boost the savings levels and feelings of financial security for low-income tax filers. If participants have more money at their disposal to weather emergencies, and they associate their feelings of financial security with their increased savings, these effects have the potential to motivate continued saving.