Capitalizing on lessons learned from behavioral economics, the $aveNYC Account limits choices, encourages individuals to save by facilitating a separate account for savings, and simplifies the process of committing to save, while creating certain obstacles and disincentives for withdrawing funds. The $aveNYC Account program offers New Yorkers with lower incomes a 50 percent match if they direct deposit part of their tax refund into a branded “$aveNYC Account” and maintain the initial deposit for at least one year.1 This one-time decision to forego a portion of their refund, combined with limited access to the account and a generous match, precipitates short-term savings with the intention of moving individuals on a pathway toward longer-term savings and greater financial stability. The $aveNYC Account pilot program enables OFE to test the following research questions:
1. Do families with very low incomes save if presented with the right incentives and opportunities?
2. Can an incentivized savings program be implemented at a large scale?
3. Can short-term, non...