Early results show low-income Canadians can save for their education

January 25, 2008
SRDC Fullreport English

In today’s knowledge economy, technological change continues to penalize those who lack the appropriate skills. Disproportionately, it is low-income individuals who lack the skills needed, as well as the means to take advantage of public mechanisms to improve their skills. Learning to Save, Saving to Learn: Early Impacts of the learn$ave Individual Development Accounts Project, a new report released by SRDC, presents the 18-month results of learn$ave, a project designed to demonstrate how Individual Development Accounts can encourage low-income adults to save in order to increase their human capital by participating in education or training, or starting a small business.

The encouragement comes in the form of matched saving credits: for every dollarlearn$ave participants deposit in a special account, they receive $3 in credits, which must be cashed in for education or training at designated institutions, or to start a small business. Participants also receive financial management training and case management services to set and reinforce financial goals. Implemented in 10 communities across Canada, the program has so far yielded promising results with regards to saving and budgeting, as well as participants’ attitudes towards education.

learn$ave matched saving credits led to substantially greater savings for program group members: these savings stemmed from changes in consumer behaviour, and did not require participants to incur greater debt or work longer hours. As well, the financial management training and case management services offered by the program are positively affecting participants’ budgeting behaviour.

In addition to learn$ave’s positive effect on budgeting and saving, the matched saving credits have worked to enhance the attitudes of program group participants toward education: these effects are expected to continue over the next several years of the program’s life and contribute to increased participation in education.

The learn$ave project was conceived and implemented in 2000 by Social and Enterprise Development Innovations (SEDI), and is being funded by Human Resources and Social Development Canada. The evaluation of learn$ave is being conducted by SRDC.

For more information on the report, contact our Communications Manager, Eliza Bennett, at 613-789-9695.