Cut Me Some Slack! Slack Resources and Technology-Mediated Human Capital Investments in Entrepreneurship

In this paper, we explore the impact that slack resources and technology can have on individuals\u27 entrepreneurial aspirations. Focusing on human capital investments that individuals make through education and work that involve both slack resources and technology, we explore the relationship among formal online learning opportunities, informal skill development in the gig economy, and entrepreneurial aspirations. Leveraging a novel dataset that merges administrative tax data with a survey of over 8,528 low and moderate-income households, we use machine learning and propensity score weighting to examine the likelihood that individuals who make these technology-mediated human capital investments will have increased odds of entrepreneurial aspirations when compared to similar individuals who do not make these investments. We find that both partaking in online learning and working in the gig economy are significantly associated with increased odds of entrepreneurial aspirations. Furthermore, through a variety of robustness and mechanism checks, we find that technology-mediation is an important factor in these relationships and that informal skill development and career preparation is one way in which gig employment influences entrepreneurial aspirations. We discuss these findings with implications for both policies and practices around online learning and gig employment

“Take my word for it”: Group Texts and Testimonials Enhance State and Federal Student Aid Applications\u27

As the cost of college continues to rise, it has become increasingly important for students to apply for financial aid. However, many students are unaware of the benefits of FAFSA. We launched a field experiment with a non-profit organization to explore the impact of text message interventions on FAFSA application rates. 2,236 potential students were randomized into three groups: a control group that focused on reminders for upcoming deadlines, a treatment group that focused on benefits-framed messaging, and a second treatment group that added social proofing and norming. Each group received 8 text messages from late September 2020 to early March 2021. Treatment group two was 87% more likely to make a FAFSA appointment than the control group. We end with policy and practice implications

Use of Public Benefits Over the First Year of Pandemic

In response to the economic crisis caused by the COVID-19 pandemic, the U.S. federal government enacted initiatives designed to help households weather the pandemic’s effects. These initiatives included expansions of existing programs, such as unemployment insurance, as well as new programs like the economic impact payments. In this brief, we investigate the extent to which households relied on an array of public benefit programs over the course of the pandemic, how they used their economic impact payments, and the extent to which the unemployment insurance expansion was effective in insulating recipients from hardship during the pandemic. We find that, in general, households were much more likely to report using their economic impact payments for essential purchases and savings than for other reported purposes. We also find while higher income households were more likely to save their economic impact payments, lower-income households were still able to save at least a portion of these funds. Evidence suggests enrollment in four different public benefits—SNAP, TANF, unemployment insurance, and social security payments—increased over the course of the pandemic. Yet, large percentages of unemployment recipients had to wait in excess of two weeks to receive their unemployment payments and relatedly, high rates of hardship among unemployment insurance recipients increased starkly over the first year of the pandemic. These results speak both to the importance of current and future policy responses to the pandemic in helping households maintain a measure of financial security, as well as to the potential gaps in this response

Using Financial Tips to Guide Debt Repayment: Experimental Evidence from Low-and Moderate-Income Tax Filers

Much of the literature on household finances tends to focus on discrete or relatively objective measures like savings, debt, economic mobility, and there has been a lack of research on holistic measures of financial well-being. This gap is due in part to the absence of a common understanding of how to define and measure financial well-being; a gap that was recently addressed by the Consumer Financial Protection Bureau’s development of a financial well-being scale. However, the research on this scale is still scarce and little is known about how financial well-being evolves over time. To that end, this paper uses a two-wave survey of low- and moderate-income tax filers to present the first longitudinal analysis of the CFPB’s financial well-being scale. Using a combination of descriptive analysis, OLS regression, and fixed effects panel regression, we assess (1) the stability of financial well-being over a six-month period; (2) the extent to which household characteristics predict volatility in financial well-being; and (3) the relationship between the experience of adverse financial events, including financial shocks and material hardships, and financial well-being. We find that financial well-being scores are extremely stable over the short-term, and that household characteristics are generally not strong predictors of financial well-being changes. We also find that, while adverse financial events like the loss of a job are significantly associated with declines in financial well-being, these changes are not large. These findings have implications for researchers and practitioners interested in using the financial well-being scale in program and policy evaluations

Promoting Public Retirement Savings Accounts during Tax Filing: Evidence from a Field Experiment

Many U.S. households—especially those with low- to moderate-incomes (LMI)—struggle to save for retirement. To address this issue, the Department of the Treasury launched myRA, a no-fee retirement account designed primarily to help people who lacked access to employer-sponsored plans build retirement savings. In this paper, we report findings from two myRA-focused field experiments, both of which were administered to well over 100,000 LMI online tax filers before and during the 2016 tax season. The first experiment involved sending one of three different myRA-focused email messages to tax filers immediately prior to tax season, and the second experiment involved incorporating myRA-focused messages and choice architecture directly into an online tax filing platform. Messages were chosen to address different barriers to retirement savings LMI households may face. We find that, though the general level of interest in myRA was very low in this population, interest and enrollment in myRA depends heavily on the way in which the benefits of the accounts are framed. Results from both experiments indicate that messages emphasizing the possibility of receiving a larger refund in the future were the most effective at increasing interest in myRA, while messages focused around the simplicity and ease of use of the accounts were less effective. We also conduct several subsample analyses to investigate the extent to which these effects differed by key household characteristics

The Socioeconomic Impacts of COVID-19 Study: Survey Methodology Report

The Socioeconomic Impacts of COVID-19 Survey uniquely documents the social and economic impacts of a global pandemic as people experienced the global pandemic. These findings can inform social, economic and health policies now and in the future. Though the data from the survey are not publicly available, they are freely available on a limited basis to interested researchers. If you or your organization are interested in accessing the cleaned and coded survey data, or would like more information about the survey, please reach out to the Social Policy Institute at

How do Changing Financial Circumstances Relate to Financial Well-Being? Evidence from a National Survey

This brief is the third and final brief in a series exploring the financial well-being of low- and moderate-income (LMI) households in the United States. The first brief in this series explored how financial well-being differed between LMI households and the general population. The second in the series examined how financial well-being changed over time in a sample of LMI respondents. This brief uses longitudinal survey data paired with administrative tax data to assess how different household experiences—including the use of alternative financial services, the experience of material and medical hardship, and improvements in physical and financial health—correspond to the changes in the financial well-being of LMI households

Does Savings Affect Participation in the Gig Economy? Evidence from a Tax Refund Field Experiment

This paper investigates how saving the federal tax refund affects gig economy participation for low-income online tax filers in the six months following tax filing. Using longitudinal survey and administrative data, we leverage random assignment in a unique refund savings experiment as an instrument for refund savings. We find significant heterogeneity in estimated effects that are consistent with life cycle models on consumption and savings. Specifically, refund savings reduced the likelihood of low-income students working in the gig economy, but increased the likelihood of more economically vulnerable households working in the gig economy. (JEL J22, D14, G51)

How do Changing Financial Circumstances Relate to Financial Well-Being? Evidence from a National Survey

This brief is the third and final brief in a series exploring the financial well-being of low- and moderate-income (LMI) households in the United States. The first brief in this series explored how financial well-being differed between LMI households and the general population.1 The second in the series examined how financial well-being changed over time in a sample of LMI respondents.2 This brief uses longitudinal survey data paired with administrative tax data to assess how different household experiences—including the use of alternative financial services, the experience of material and medical hardship, and improvements in physical and financial health—correspond to the changes in the financial well-being of LMI households

Assessing the Short-Term Stability of Financial Well-Being in Low- to Moderate-Income Households

A growing body of research demonstrates that U.S. households experience a high degree of volatility in their finances. This volatility can take the form of large swings in month-to-month income, spells of unemployment, and incurring unexpected expenses.1 Beyond being difficult to predict, these income and expense shocks are costly as well, with one survey finding that the most expensive shock experienced by the median U.S. household cost roughly half of one month’s income.2This financial volatility disproportionately affects low- to moderate-income (LMI) households;3 a population that often lacks the resources to manage this volatility. For example, research from the Survey of Household Economics and Decisionmaking finds that roughly two-thirds of LMI households could not manage a modest $400 expense without taking out a loan they could not pay off immediately.4 This lack of a buffer against financial volatility is to some degree unsurprising, as the budgets of LMI households are largely taken up by essential expenses.5Yet even as households experience high degrees of financial volatility and often lack sufficient buffers against this volatility, there is an open question about the impact this volatility has on households’ sense of well-being. U.S. households report finances as their primary source of stress,6 but they also commonly report that they lead comfortable financial lives.7 These results would seem to indicate something of a disconnect between common measures of subjective and objective financial well-being and speak to the need for more research to understand the drivers of household perceptions of financial well-being.To that end, the Social Policy Institute at Washington University in St. Louis is publishing a series of briefs on financial well-being in LMI households. Our measure of financial well-being comes from the Bureau of Consumer Financial Protection’s (BCFP, formerly the Consumer Financial Protection Bureau) recently-developed financial well-being scale. The BCFP defines financial well-being as representing “financial security and financial freedom of choice, in the present and in the future.”8 This definition of financial well-being directly informed the development of the BCFP’s Financial Well-Being Scale, which provides a reliable and valid measure of subjective financial well-being.9The first brief in this series explored how financial well-being differed between LMI households and the general population. This brief, the second in the series, examines how financial well-being changes over time in a sample of LMI respondents. Using longitudinal survey data matched with administrative tax data, this brief addresses the following questions: • How stable is financial well-being in LMI households over a six-month time period? • Do household characteristics predict stability of financial well-being over a six-month period? • What are the key predictors of financial well-being six months after tax filing in LMI households