Individual Development Accounts and Social Justice (Report‪)‬

Anti-poverty policies in the United States have historically provided a degree of income relief to low-income households. Unfortunately, the policy strategies were designed to provide temporary assistance and did not address the long-term economic needs and development of low-income families with children. In an effort to move beyond the concept of income transfers only, social work scholar Michael Sherraden (1991) developed an anti-poverty policy initiative that built upon the strengths of historical U.S. asset building policies. Sherraden labeled his new concept Individual Development Accounts (IDAs). IDAs are dedicated savings accounts designed to help low- and moderate-income households create long-term assets in the form of homeownership, small business development, and post-secondary education (Sherraden 1991; Shobe and Page-Adams 2001). Given the relative "newness" of asset development programs for economically vulnerable households, research on the effects of IDAs for individual, household, and community well-being is still in its infancy. However, in the past 15 years researchers have found that IDAs reduce vulnerability (Lombe 2004; Yadama and Sherraden 1996) in a number of areas. For example, IDAs are found to be associated with increased asset retention (Christy-McMullin and Shobe 2007), social inclusion (Lombe and Sherraden 2007), quality of social supports, community involvement, social status (Moore et al. 2001), civic participation (McBride, Lombe and Beverly 2003) and financial self-efficacy (Sanders 2007; Shobe and Christy-McMullin 2007). Despite these positive effects, U.S. asset building policy efforts continue to disproportionately favor households that already hold assets as opposed to those without assets (Woo, Schweke, and Buchholz 2004). Interestingly, asset building efforts targeted towards low and moderate income individuals and families are being scrutinized at higher levels than asset building efforts directed at wealthy individuals, families and corporations. As a result, it is imperative that we examine the long-term effects of asset building for economically vulnerable populations using rigorous empirical methods.