Using a combination of administrative and survey data, we evaluate a number of metrics capturing the ways Israeli households are engaging with the CSA program. These metrics include the investment choices and savings amounts of these households, as well as households’ expectations for how they will use the funds. Additionally we will explore how decisions regarding the CSA vary based on a number of demographic, financial, and behavioral indicators.
Data and Method: This paper employs administrative data collected by the Israeli National Insurance Institute on households participating in the CSA program, a population that includes every household with at least one child under the age of 18. Further, we analyze a survey of these households fielded at the time of the program’s rollout to provide a more robust read on the finances, behaviors, and psychological characteristics of these households.
Results: Preliminary results highlight some of the important issues surrounding the CSA program. First, 46.4% of Israeli households have actively selected an investment tract for CSA funds. However, only 12.1% of accounts have been invested in high-yield investment funds, indicating that almost 90% of CSAs will be deposited into savings accounts or low-yield investment funds. Of those that chose a fund, parents with younger children were 40% more likely to deposit to an investment fund than parents with older children (p<0.001). Survey respondents report some uncertainty about the existence of the CSA program in the long-run, but also appear to be very excited about the program. Sixty-five percent of surveyed parents chose to deposit an additional NIS 50 into the CSA, and majorities expected that their children will use CSA funds for education.
Implications: The Israeli CSA program, which builds on existing infrastructure and relies on automatic savings mechanisms, represents an exciting opportunity to learn about CSAs. While the program is still in its infancy, the rich array of data we are exploring will provide a robust sense of how CSAs work on a national level. Further, by exploring how Israeli households are currently engaging with the program, we hope to inform the design of future interventions that will optimize the program’s impact on household well-being.