micrenterprise development anti-poverty WP06-08

micrenterprise development anti-poverty WP06-08 - CSD...

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Unformatted text preview: CSD Working Paper Using Individual Development Accounts for Microenterprise Development Fred M. Ssewamala, Margaret Lombe and Jami C. Curley CSD Working Paper 06-08 2006 Center for Social Development Using Individual Development Accounts for Microenterprise Development Fred M. Ssewamala* Columbia University School of Social Work 1255 Amsterdam Avenue New York, NY 10027 Tel. 212-851-2250 Fax 212-851-2204 fs2114@columbia.edu Margaret Lombe Boston College Graduate School of Social Work Chestnut Hill, MA 0246 Jami C. Curley St. Louis University School of Social Service St. Louis, MO, 63103 CSD Working Paper 06-05 2006 Forthcoming: Journal of Developmental Entrepreneurship Center for Social Development George Warren Brown School of Social Work Washington University One Brookings Drive Campus Box 1196 St. Louis, MO 63130 tel 314-935-7433 fax 314-935-8661 e-mail: csd@gwbmail.wustl.edu HTTP://GWBWEB.WUSTL.EDU/CSD * All correspondences should be sent to Professor Fred Ssewamala. USING INDIVIDUAL DEVELOPMENT ACCOUNTS FOR MICROENTERPRISE DEVELOPMENT This study examines whether there is a role for microenterprise development as an anti-poverty strategy in the United States. This question is important because skeptical views exist regarding whether, generally, poor Americans would have the enthusiasm to undertake the risk of dealing with small-businesses, especially given that the United States has a public welfare system to take care of the poor and abundant jobs for those with the skills--compared to most developing countries where the only alternative open for a family investing in a small-business may be starvation. Using data from 14 community-based programs promoting small-business investment through Individual Development Accounts (IDAs), this study finds that overall there is a considerable level of interest in saving for and investing in small-businesses among poor Americans, including those who are less advantaged in terms of income poverty and employment. Policy makers should thus consider promoting IDAs/subsidized savings for small- businesses development as a potentially viable strategy to address income poverty and inequality in the United States. Keywords: Savings, Microenterprise, Poverty, Inequality, Individual Development Accounts (IDAs). Center for Social Development Washington University in St. Louis 1 USING INDIVIDUAL DEVELOPMENT ACCOUNTS FOR MICROENTERPRISE DEVELOPMENT 1. Introduction and background Although the United States is arguably the richest country in the world, poverty is still an issue of intense concern. Americas abundant wealth is not shared equally. There are great economic disparities among Americans. Recent statistics indicate that 12.1% of all Americans fall below the poverty line, and if there were no government transfers, 20% of all Americans would be considered poor (United States Bureau of the Census, 2004)....
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micrenterprise development anti-poverty WP06-08 - CSD...

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