Householder Response to the Householder Response to the Earned I - PowerPoint PPT Presentation

Householder Response to the Householder Response to the Earned I ncome Tax Credit: Earned I ncome Tax Credit: Path of Sustenance Path of Sustenance or Road to Asset Building or Road to Asset Building By Sherrie L.W. Rhine, Sabrina Su, Yazmin Osaki, and Steven Y. Lee The views expressed are those of the authors and do not necessarily represent the opinions of the Federal Reserve Bank of New York or the Board of Governors of the Federal Reserve System.

STUDY SEEKS TO ANSWER STUDY SEEKS TO ANSWER THE FOLLOWI NG THE FOLLOWI NG � How are refunds used? How are refunds used? � � Can the EI TC program be used to Can the EI TC program be used to � bring the unbanked into the financial bring the unbanked into the financial mainstream? mainstream? � What factors influence a lower What factors influence a lower- - � income taxpayer’ ’s decision to open a s decision to open a income taxpayer savings account? savings account? 2 2

CONCLUDI NG REMARKS CONCLUDI NG REMARKS � Unbanked consumers are more likely to Unbanked consumers are more likely to � open a savings account open a savings account � Opening an account is positively related to Opening an account is positively related to � tax refund size tax refund size � Nonprofit organizations can and do play an Nonprofit organizations can and do play an � important role in helping to: important role in helping to: � move the unbanked into the financial move the unbanked into the financial � mainstream mainstream � facilitate asset facilitate asset- -building behavior building behavior � 3 3

FUTURE RESEARCH FUTURE RESEARCH 2004 TY STUDY UNDERWAY 2004 TY STUDY UNDERWAY Follow - -up survey up survey — — Longer- -term implications term implications Follow Longer Control survey — — Baseline comparison Control survey Baseline comparison Enhancements — — Tax prep process Enhancements Tax prep process and survey questions and survey questions 4 4