Prizes Facilitate Saving by Youth

Prizes Facilitate Saving by Youth

In the summer of 2015, we worked with the New York City Department of Youth and Community Development (DYCD) to design and pilot a Payroll Savings Program for around 50,000 youth participating in their summer youth employment program. The goal of the program was to encourage young workers to save a portion of their summer earnings, an important first step in developing life-long financial security. Commonwealth has successfully implemented prize-linked savings programs for adults nationwide and has worked with youth to build their financial capability by making financial education fun. This brief discusses some of the results from this pilot study,

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Key Takeaway

Prize-Linked Savings (PLS) features have proven to motivate youth workers to save money and begin to establish positive financial behaviors.

Key Learnings

  • The availability of PLS features resulted in a significant increase in the number of youth workers who signed up for direct deposit, or activated the savings pocket on their payroll card.

  • Despite 45% of youth workers not knowing about direct deposit, 20% still signed up for it, many to participate in PLS.

Key Findings

  • 75% of youth workers reported that they saved in some sort of way.

  • 36% of youth workers reported that the opportunity to win prizes prompted them to save.

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