Purpose: Social policy initiatives in the last decade have witnessed the emergence of more investment-oriented anti-poverty approaches.  One such policy initiative is Individual Development Accounts (IDAs).  IDAs are matched savings accounts targeted at the poor that provide subsidies through matches and are designated for specific uses. Early research on IDAs has shown that poor people are able to save in IDAs. However, because economic circumstances often vary between rural and urban communities, savings patterns may vary as well.  The purpose of this study was to examine the unique experiences and outcomes of urban and rural participants in IDA programs.

Methods:  This study utilized a combination of two data sets, the Downpayments on the American Dream Demonstration (ADD) and the Family Assets for Independence (FAIM). The sample size is 2,865. In order to explore the unique experiences of rural vs. urban participants, two separate regression models were executed to control for residency.  In addition, a short survey was sent to administrators to identify the challenges associated with implementing IDA programs in rural vs. non-rural areas.

Results: The results indicate that race, hours of financial education, and the frequency of deposits were associated with savings.  While these three independent variables were the only predictors of savings among the rural population, the urban population included several additional independent variables: education, income, income/poverty ratio, match rate, and having either a savings or checking account.

Implications: These results suggest that program administrators should design IDAs to specifically address the needs of each area. It also appears that institutional characteristics play an important part in the savings behavior of all participants, indicating more research should be done on institutional theory to provide policymakers with a better understanding of the precise role of institutions in the facilitation of saving among disadvantaged populations.