The Ladder

A Blog from New America's Asset Building Program

Boosting Economic Mobility Through Prize-Linked Savings

Published:  June 3, 2013

That's the title and subject of a new report from the Heritage Foundation, written by Stuart Butler, David John, and Sean Rust. The report takes a look at the status of savings in the US, impediments to savings, the international track record of prize-linked savings programs (where in addition to or in place of interest, savers earn the opportunity for prizes, mostly cash) and the possibilities of and obstacles to such a program in the US. The report is a very useful primer, and was offered as a white paper at our April 16th "Jackpot" event, at which Dr. Butler was a speaker.

Prize-linked savings is growing as an option across America. As a matter of fact, another of our guests at "Jackpot" is partially responsible for that. State Representative Mae Flexer sponsored a bill to allow prize-linked savings in Connecticut and that bill passed the legislature last week and appears to have become law today.

I was fortunate enough to be invited to discuss prize-linked savings at a "Heritage Hangout" last Friday with Dr. Butler and Joanna Smith-Ramani from the Doorways to Dreams Fund (D2D), the Boston-based non-profit that has been a leading catalyst for a lot of the growth in prize-linked savings in the US. Watch below as we discuss PLS, the way that fighting crime has prevented PLS from spreading, the "lizard brain" vs. the "rational brain" and the ways that asset limits prevent struggling families from saving broadly, and may limit the appeal of PLS.

 

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