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1 Introduction
This article presents a cost-benefit analysis of the Tulsa Individual Development Account (IDA) program, which was initiated in the late 1990s and is being evaluated through random assignment. The key follow-up data used in the evaluation was collected around 10 years after random assignment, about 6 years after the program ended. The IDA program, which was administered by the Community Action Project of Tulsa County (CAPTC), was intended to encourage households below 150% of the federal poverty guidelines (about $25,000 for a family of four in the late 1990s) to accumulate assets by providing subsidies to save to purchase a home, maintain a currently owned home, obtain post-secondary education, open or run a business, and save for retirement. As will be seen, particular emphasis was placed on the accumulation of housing assets.
Because of their low incomes and lack of assets, poor people have little financial cushion in the event of job losses or other financial crises. Moreover, it is usually difficult for poor people to save and, hence, accumulate assets and the financial stability expected to accompany such wealth. To help overcome these barriers, those enrolled in the Tulsa program could open an IDA. Once they did so, contributions of up to $750 per year for 3 years were matched at $2 for each dollar in their account that participants used for home purchases and $1 for each dollar used for the other four designated purposes listed above. In addition, participants received 12 hours of general money-management training; additional hours of training specific to the type of asset they intended to purchase (for example, participants saving for a home attended classes on shopping in the real estate market and interacting with real estate agents and loan officers); and one-on-one case management services including phone and in-person advice. The administrative cost of operating the Tulsa program was funded by the federal government, which provided about two-thirds of the total (mostly through Community Service Block Grants and Community Development Block Grants); the Oklahoma state government and the Tulsa local government, which provided about 1% of the total; and by donations from the private sector, which provided about one-third of the total (Schreiner, 2004). The matching funds were entirely paid for by the private...