Asset Building for Low Income People

21-Feb-2012    This paper summarizes the results of a natural experiment in savings involving low income recipients of social benefits in Poland.

The paper discusses the lessons learned from the experiment and offers some policy recommendations how such incentives could be broadly used in public policy to alleviate poverty and support asset building for low income individuals.

The experiment shows that cash rewards in the form of matched savings or lotteries may be an effective tool in stimulating the poor people to save and to build assets that protect them against unexpected financial expenditures.

Such actions can be effective in supporting mechanisms to the traditional welfare policies. More research and experimentation is needed in the future to test integrated approaches to poverty alleviation.

 

 
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