Research

This article analyzes a demonstration program mounted by a major bank to understand whether access to information and communications technologies, combined with financial literacy training and training on how to use the Internet, can help low- and moderate-income individuals in inner-city neighborhoods be more effective financial actors. While quantitative analysis turns up few significant program effects, qualitative work implies that implementation issues likely compromised the effectiveness of the program. There was evidence of a potential link between information and communications… more

This report details the partnership process and lessons learned from a two-year technical assistance program designed to help community organizations partner with mainstream credit unions with the goal of enrolling new lower-income members or expanding an existing partnership. The report uses the stories of these four partnerships as case studies to identify four strategic areas through which partnerships can be strengthened and the common barriers to developing a successful partnership can be overcome. The lessons learned section of the case studies and the report conclusions… more

With millions of American families facing foreclosure and the U.S. Senate moving toward approval of a compromise bill, the public policy center Demos takes stock of the housing market crisis and the federal response to date. The findings of a new Demos report--"Beyond the Mortgage Meltdown: Addressing the Current Crisis, Avoiding a Future Catastrophe"--show that, beyond the terrible consequences families face in this crisis, the housing market is in short- and long-term economic peril.

The State of the Nation’s Housing report has been released annually by Harvard University’s Joint Center for Housing Studies since 1988. Now in its 20th year, it continues to serve as an essential resource for both public policy makers and private decision makers in the housing industry. This year’s report provides a current assessment of the changing housing market; housing’s role in the economy; housing affordability challenges; and the demographic trends driving long-run housing demand.

The NFS Study explores the availability and usage of financial services and products in two neighborhoods: Jamaica, Queens and Melrose, Bronx. The New York City Department of Consumer Affairs’ Office of Financial Empowerment (OFE) conducted the study under the leadership of the Center for Economic Opportunity as part of Mayor Bloomberg’s broader anti-poverty efforts, and with support from the William J. Clinton Foundation. The purpose of the NFS Study is to better understand banking dynamics in low-income neighborhoods to identify public and private opportunities… more

The new report "Shredded Security: Overdraft practices drain fees from older Americans," shows that overdrafts triggered by debit card use hit people at or approaching retirement age hard even though they use plastic less than younger debt-card holders. The cost – $1.65 in fees for every $1 advanced – reinforces CRL's previous research, which found that overdraft fees are disproportionate to the amount advanced to cover a purchase: Unauthorized overdrafts cost Americans $17.5 billion in fees for $15.8… more

Evidence of substantial increases in the cost of living for families across the UK has brought renewed urgency to the need to tackle the plight of people without access to bank accounts. The costs of financial exclusion are also increasing as, for example, utility providers impose punitive charges for those unable to pay by direct debit. And, compounding the problem, as the cost of financial exclusion rises, it is becoming even more difficult for the financially excluded to access core financial services.

New computer simulation analysis by the nonpartisan Employee Benefit Research Institute (EBRI) provides the most realistic estimates yet conducted of how much savings are needed to cover health expenses in retirement, taking into account such major factors as gender, marital status, age, and whether your former employer provides any help with retiree health insurance.

Authors Jacob S. Hacker and Elisabeth Jacobs found that this growing income volatility has been largely hidden behind the wall of relatively stable overall economic statistics. Their examination of data from the Panel Study of Income Dynamics, which tracks the income patterns of thousands of individuals and their families since the 1960s, shows that income patterns for many families have become much more erratic. As if rising price pressures at the gas pump and the grocery check-out line weren’t trouble… more

One way to achieve an ownership society is to endow all children with savings accounts starting at birth. This report shows that specific design features of a children's savings account program will impact the distribution of wealth. For example, non-taxability of account earnings distributes significantly more benefits to higher-income groups than to lower-income groups. Also, because many families experience mobility over their lifetimes, a significant portion of benefits conditioned on low annual income will accrue to middle- and higher-income families.… more

Restrictive asset limits in means-tested programs may unintentionally discourage families from saving. This brief presents an empirical analysis of how asset tests affect families' asset holdings. The findings suggest that more lenient asset tests and more generous IDA program rules can lead families to increase their asset holdings. Relaxed vehicle asset limits, for example, are associated with increased vehicle ownership. Since people often need a reliable car to get to work, this finding suggests that exempting at least one vehicle… more

Despite decades of significant tax subsidies for pensions and retirement accounts, most Americans retire with little or no pension saving. This paper suggests that it is possible to create a "Super Simple" saving plan that would provide a basic, low-cost, easily administrable plan with the potential to increase significantly the retirement assets available to moderate- and middle-income individuals. This plan follows the lead of a new system about to be implemented in the United Kingdom, which features automatic contribution for… more

Publication of a new "Economic State of Young America" report that provides benchmarks for understanding the economic conditions experienced by young adults in America-and evidence of long-term destabilization across key economic factors, including: - The flat income and unstable job trends among today's young workers--also examining poverty rates, unemployment trends by race, quality of work, insurance rates, and incarceration rates by race. - The rapid proliferation of debt--examining student loan debt and its impact on wealth and savings, the rapid growth of… more

Public concern about economic insecurity has increased markedly over the last several decades. This paper assesses the extent to which this increase in concern has in fact coincided with increased risk to family income. Using data from the Panel Study of Income Dynamics, we examine changes in two indicators of income risk—the short-term variability (volatility) of family income, and the association between large income drops and destabilizing life events—over the 1970-2004 period. Our findings support the hypothesis that income risk… more

America’s Rental Housing- The Key to a Balanced National Policy is the Joint Center for Housing Studies’ latest look at rental housing issues, and in particular the effect that current mortgage market meltdown is having on the wellbeing of renters and the construction and preservation of the rental housing inventory. Its goal is to provide public policy makers, state and local housing agencies and private business leaders engaged in the rental market with information about the role of rental housing in the national housing agenda,… more

Is the American Dream slipping away? One in 33 current U.S. homeowners may be headed toward foreclosure in the coming years because of subprime loans, according to our new report, Defaulting on the Dream. In some states, the crisis is particularly acute—in Arizona, for instance, one in every 18 homeowners could lose their home; in Nevada, the ratio is one in 11. The problem hardly stops there. Because of foreclosures in their communities, an additional 40 million homeowners may see their property values and… more

Successful IDA homeownership programs rely upon an abundance of housing assistance products aimed at complementing and leveraging their IDA matching grants. Households earning 200% of poverty must rely upon housing assistance programs that offer much more than the average $2,000 IDA matching grants. Many homebuyers’ matching IDA grants are in amounts that do not even cover the closing costs of their first mortgage. Fortunately, an ever-increasing number of local, state and federal programs provide financial aid to low-income first time… more

This article examines the extent to which family wealth affects the Black – White test score gap for young children based on data from the Panel Study of Income Dynamics (aged 3 – 12). This study found little evidence that wealth mediated the Black – White test scores gaps, which were eliminated when child and family demographic covariates were held constant. However, family wealth had a stronger association with cognitive achievement of school-aged children than that of preschoolers and a stronger association with school-aged… more

Growing fiscal pressures and increasing life expectancy have prompted calls to raise retirement ages. Some fear this change might harm long-career, lower-wage workers. Tying retirement benefit eligibility to years of service might protect low-wage workers who start their careers early. But higher disability rates and greater employment volatility could offset lower-wage workers' early labor force starts. Using survey data matched to administrative records, we describe how work histories vary by gender, education, and other characteristics. We find that years of… more

During the 2007 tax season, Professor Peter Tufano, founder of D2D Fund, collaborated with H&R Block to study offering U.S. Savings Bonds (Series I) at 27 H&R Block tax preparation offices. 3,729 clients with federal refunds greater than $500 received a scripted offer to purchase US Savings Bonds. 220 (or 5.9%) of these clients chose to purchase bonds spending an average of $228 each which resulted in tax time savings of $50,100. This memo discusses the details of the 2007 tax… more

Jointly authored by a number of distinguished scholars and leaders from across the political spectrum, For A New Thrift powerfully addresses the linked problems of overindebtedness, lack of savings, and growing inequality in the United States. The focus is on institutions. When a society creates democratic institutions to encourage thrift, more people are likely to engage in the positive activities of saving, conservation, and asset building. When a society fails to nurture such institutions, limits access to them, or supports… more

This study looked into current practice in the provision of personal finance education, information and advice for young adults across the UK. It focused on those in Further and Higher Education and those not in education, employment or training (NEET). Other young people (in school, in work, and through their families) are being addressed by other projects in the National Strategy for Financial Capability.

This report on the attitudes and lives of the American middle class combines results of a new Pew Research Center national public opinion survey with the center's analysis of relevant economic and demographic trend data from the Census Bureau. Among its key findings: Fewer Americans now than at any time in the past half century believe they're moving forward in life. For decades, middle income Americans had been making absolute progress while enduring relative decline. But since 1999, they have not made… more

In recent years, a majority of subprime loans made in the United States have been originated by mortgage brokers, who can properly be characterized as the "engine" of the subprime market. The rapid growth of subprime lending was fueled by thousands of mortgage brokers across the country delivering billions of dollars of subprime loans to mortgage lenders, who in turn packaged and sold them to Wall Street investors. Because of their major role, mortgage brokers have had significant influence in… more

This paper examines how different groups among the poor are saving based on evidence arising from two data sources which are further described in immediately following sub-sections: • for cross-country analysis and single country adoption analysis, we draw on cross-country FinScope datasets from seven African countries, which have not been used for this purpose before; • in South Africa, we use a 2004 micro-level household panel called the Financial Diaries, which track all the income, expenditure and financial flows of a small sample… more

The association between cultural orientation and material outcomes is fundamental to sociology research. This article contributes to the understanding of this relationship by exploring how religious affiliation affects wealth ownership for conservative Protestants (CPs). The results demonstrate that religion affects wealth indirectly through educational attainment, fertility, and female labor force participation. The results also provide evidence of a direct effect of religion on wealth. Low rates of asset accumulation and unique economic values combine to reduce CP wealth beyond the… more

Until recently, the foreclosure problem facing the Chicago region has largely been confined to lowerincome and minority communities. High concentrations of subprime mortgages, often containing deceptive and abusive terms, in these neighborhoods led to high concentrations of foreclosures. These concentrated foreclosures, in turn, had the potential to lead to neighborhood decline in the form of decreased property values and increased crime. In 2006, growing problems with popular subprime adjustable rate mortgages and stagnant or declining property values led foreclosures in the region to skyrocket to record… more

A great way to assess how well adults have accumulated wealth is to look at their finances in the years shortly before they retire. We show wealth among households with an adult age 57–61 in 2004, using the Health and Retirement Study. This wealth snapshot highlights the extraordinary importance of Social Security, traditional pensions, and owner-occupied housing for typical near-retiree households today, which together comprise nearly four-fifths of wealth for middle quintile households on the verge of retirement.

This report in the series, “Determinants of Asset Building,” provides a policy-oriented conceptual framework that has the potential to explain saving and asset accumulation across the entire population and to account for the low levels of saving and asset accumulation in the low-income population. The report also reviews empirical evidence that supports or challenges this framework.

In 2003, First Nations Development Institute (FNDI) issued its first report on predatory lending in Native communities. This second report expands upon its analysis, updating information on the prevalence of predatory practices and adding new information from more recent quantitative data sources. It provides an analysis of survey data collected from attendees at the National American Indian Housing Council meeting in May 2007; survey data collected from Native users of selected Voluntary Income Tax Assistance sites; geo-coded data of payday lenders, bank branches, and Native community… more