Building the Case for Tax-Time Savings: Replicating Savenyc Findings in a New Cohort
Methods: Data are from the 2010 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 a portion of their refund into a savings account. If participants left the money in the account for an entire year, their balance was matched at a rate of 50 cents for every dollar. Participants in the program and a comparison group drawn from non-participating VITA sites were surveyed at baseline and again one year later. Propensity score weighting was used to compensate for small baseline differences between the two groups. Regression analyses were conducted to predict presence of savings and amount of savings, controlling for important demographic variables and financial covariates.
Results: Preliminary results suggest that participation in SaveNYC is associated with a greater likelihood of having savings one year later (p<.05). Sixty-six percent of treatment group members reported having at least some savings, compared to 54 percent of comparison group members. The average amount of savings differed slightly between groups ($1514 for treatment group; $1263 for comparison group), but this difference was not significant (p=.47).
Conclusions and Implications: Consistent with previous findings based on an earlier SaveNYC cohort, findings of this study suggests that a tax-time savings program can successfully increase the likelihood that low-income tax filers save money. Although the $250 difference in savings was not statistically significant, the increased likelihood of having savings suggests that participation in a tax-time savings program has the potential to motivate continued saving. Social workers have been at the forefront of the asset-building movement, establishing asset-building programs across the nation. Tax-time savings programs may represent the next powerful tool to increase the financial security of low-income clients. In the long-term, tax-time savings interventions can increase the involvement of low-income households in conventional financial institutions.