Can low-income adults be encouraged to save money in order to attend education or training or start a new business? This question was at the heart of learn$ave, a demonstration project that tested Individual Development Accounts. IDAs are matched-savings plans that encourage low-income individuals to accumulate productive assets for purposes of improving themselves.
In learn$ave, the project contributed $3 in matched credits for every $1 deposited in a learn$ave account. Participants had up to three years to save a maximum of $1,500. With the matching contribution, therefore, the total amount available to the participant could be as high as $6,000. Like other IDA programs, learn$ave also provided assistance to participants in the form of financial management training and a case management component. Earned credits had to be used up by month 48.
The allowable uses for the matched funds were limited to training, education, and small business start-up.
A total of 4,827 participants enrolled in learn$ave, which operated in 10 sites across Canada. The Social Research and Demonstration Corporation (SRDC) and Social and Enterprise Development Innovations (SEDI) jointly conducted the project. SEDI was responsible for the implementation and delivery of the project in partnership with a network of non-profit agencies. Local financial institutions worked with the community agencies to provide deposit account services to learn$ave participants.
Throughout the project, launched in 2001, SRDC oversaw the research and evaluation process to determine how well learn$ave was implemented and worked, and what impacts it had. SRDC evaluated the project by conducting randomized trials in Vancouver, Toronto, and Halifax. Participants were randomly assigned to program and control groups, and the two groups were compared on a series of outcomes. Specifically, researchers looked at whether participants in learn$ave
increased budgeting and financial goal setting, increased the amount saved and overall new worth within the saving period, increased their participation in adult learning and small business start-up, and improved their employment and earnings prospects.
Other research included a case study on service delivery in the three cities mentioned above and at seven other sites across Canada – Calgary, Winnipeg, Grey-Bruce counties (Ontario), Kitchener-Waterloo, Montréal, Fredericton, and Annapolis-Digby (Nova Scotia). A cost-effectiveness analysis was also conducted to determine if a program like learn$ave is economically viable for implementation on a larger scale.
The project ended with the release of the final research report in November 2010. The report confirmed that matched savings can encourage low-income adults to save for and enrol in post-secondary education and training. However, the report showed that this can be a costly way of promoting adult learning and provided suggestions for ways to reduce costs. It also found that windfall gains realized by participants who would have enrolled in adult learning without learn$ave reduced the program’s cost-effectiveness, though this is a problem that exists but is unmeasured in alternative financial assistance models.
In August 2005, SRDC published Design and Implementation of a Program to Help the Poor Save, the second report on the learn$ave project, which documented in detail the implementation of learn$ave and presented lessons learned. In its January 2008 report, Learning to Save, Saving to Learn: Early Impacts of the learn$ave Individual Development Accounts Project, SRDC clearly showed that low-income adults can save, mainly by re-arranging their asset portfolio. In the March 2009 report, Learning to Save, Saving to Learn: Intermediate Impacts of the learn$ave Individual Development Accounts Project, the results indicated that the matched saving credits encouraged adult learning among participants, mainly in post-secondary education programs.
learn$ave was funded by Human Resources and Skills Development Canada.
Published: March 2009
Policy Area: Adult Learning - Adult Training
Population: Low-income Populations