Karissa Coltman, SaveUSA Research Coordinator and Tax Program Operations Specialist, is our May guest blogger.
In a tough economy where so many hard working families are barely making ends meet, it might seem strange to ask “What are you saving for?”. Yet this is exactly the question asked of and answered by 702 families this year in Tulsa who enrolled in SaveUSA. They have been given the opportunity to have 50 cents of each dollar they saved matched in a special savings incentive research study. This savings incentive opportunity was offered at tax time to income eligible families in four cities across the country, including Tulsa, Oklahoma.
The program which is also offered in New York City, Newark, NJ, and San Antonio, TX, just completed its second tax time enrollment period where tax payers with dependants making $50,000 or less and tax payers with no dependents making $25,000 or less were given an opportunity to set aside a portion of their refund (a minimum of $200) into a special savings account with an opportunity to receive a 50 cent deposit matching each dollar they saved at tax time, up to $500, on February 1,2013.
Community Action Project of Tulsa County is one of the research sites tracking two randomly assigned sets of participants, a program group that had the opportunity to open the matched savings account, and a regular filers group that did not. Researchers hope to determine over a 3 to 5 year period whether there is any significant difference between the program group with an incentive to save part of their refund and the regular filers group. The study is in its second of three programmatic years, and will follow participants for a total of five years to determine long term impact of an incentive to save. (more…)
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As an anti-poverty agency, CAP’s ultimate vision is that the children we serve today move up the economic ladder so that when they are adults their children are not born into poverty. But according to a new study by the Pew Economic Mobility Project, the headwinds facing Oklahomans are particularly strong.
An interactive map shows clearly Oklahoma, along with Louisiana and South Carolina, have worse than average mobility rates on three measures — absolute mobility (residents’ average earnings growth over time), relative mobility (residents’ rank on the earnings ladder relative to their peers), and updward / downward movement along that ladder. Another six states perform worse than the national average on two of the three measures. Interestingly, Texas and Florida, states without income taxes, are two of those six states.
The study looked at average earnings of adults ages 35-39 between 1978 and 1997, and compared them to average earnings of the same sample ten years later. 14% of the Oklahomans experienced absolute mobility, compared to 17% as a national average, and a maximium of 23% in Connecticuit. Relative upward mobility was higher across the board than absolute mobility - 30% in Oklahoma compared to 34% national average and a high of 49%, again in Connecticuit. But, 33% of the Oklahomans experienced downward economic mobility, compared to 28% nationally. And this was before the economic recession of 2008.
The study did not analyze why some states offer better or worse opportunities for residents to move up the earnings ladder. Pew’s larger study on mobility, however, demonstrates that a host of factors including postsecondary educational attainment, savings and assets, and neighborhood povery during childhood — all factors where Oklahoma falls short — matter. In other words, there is no silver bullet. States must consider the context in which its citizens build human capital and figure out how to support that growth.
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