Effects of a randomized tax-time savings intervention on savings account ownership among low- and moderate-income households

Being unbanked makes it difficult for low and moderate-income (LMI) households to manage finances, save, and access credit. We assessed effects of an online tax-time savings intervention on savings account openings in the 6 months following tax filing among a sample of4,692 LMI tax filers. Treatment group participants had 60% greater odds of opening a […]

The mediating role of assets in explaining hardship risk among households experiencing financial shocks

Material hardship is common among low- and moderate-income (LMI) households. Without liquid financial assets, these households are more likely to experience hardship in the face of financial shocks—large and unexpected expenses or dips in income. Authors hypothesized that shocks have a direct effect on hardship, and that liquid financial assets partially mediate the relationship between […]

The role of choice architecture in promoting saving at tax time: Evidence from a large-scale field experiment

Tax refunds give many low-and moderate-income (LMI) households a rare opportunity to save for unexpected expenses. We conducted three experiments aimed at increasing tax-time savings by LMI consumers. In a large field experiment, the most effective intervention increased the average savings deposits by about 50%. Delivered as people filed taxes online, this treatment consisted of […]

Coping with a crisis: Financial resources available to low- and moderate-income households in emergencies

Using data from tax records and a longitudinal survey, this brief investigates the choices low- and moderate-income households make about their tax withholding and their preferences for withholding. The relationship between withholding preferences and the use of the tax refund, measures of material hardship, and the use of alternative financial services is also explored. We […]

Characteristics and hardships associated with bank account ownership among Refund to Savings participants

Having a bank account is one important way for households to securely accumulate savings, build credit, and earn interest on assets. Nationally, 7.7% of households are unbanked—lacking both a checking and a savings account. One proposed step toward financial inclusion is to encourage unbanked households to open accounts and deposit refunds into savings at tax […]

The role of health insurance in the financial lives of low- and moderate-income households

Health insurance is an important resource for enabling access to and use of medical care, and is associated with reduced risk for mortality and poor health outcomes. Health insurance also protects households from incurring major medical expenses and unmanageable levels of medical debt. About a quarter of a sample of low- and moderate-income (LMI) tax […]

Use of alternative financial services in low- and moderate-income households: Evidence from Refund to Savings

Unable to conduct everyday financial transactions without a bank account or in need of flexible, shortterm credit, many low- and moderate-income (LMI) households turn to alternative financial services (AFSs). This brief summarizes research on AFS use among LMI tax filers participating in the Refund to Savings (R2S) Initiative. We make an important contribution to AFS […]