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Many DC children are struggling to breathe. Is bad communication to blame?

Author: Marla McDaniel

| Posted: April 18th, 2014

AC_header-01Could simply fixing gaps in communication between doctors and schools be a key to reducing the impact of asthma on poor kids?

A lot of research shows that not getting the right—or consistent—care causes conspicuous health disparities that fall neatly along racial, ethnic, and economic lines. For many kids with asthma, their condition is managed not by routine care, but by regular emergency trips to the hospital while struggling to breathe.  Unfortunately, if you’re a low-income African American or Latino child with asthma in DC, your asthma experiences are more likely to include one of those terrifying trips.

Access, quality of care, and poverty are part of the story, which my colleagues and I highlight in a series of blog posts and our new report. But our report also highlights the problems created by miscommunication—or worse, no communication—between the professionals and caregivers children need most to manage this chronic and life-threatening illness. Could focusing on communication make things much better for kids?

It takes a team to manage children’s asthma. It takes medical professionals, parents, schools, and the patients themselves.  But our report finds several places where communication lapses routinely occur.AC_dots-03Doctors need the time to educate parents and patients about the different kinds of medications and make sure they understand that some need to be taken every day indefinitely, no matter how the child is feeling. IMPACT DC , the Children’s National Health System program that sees patients who come to the emergency department for asthma-related issues tries to tackle this problem.AC_dots-04But to keep children well, IMPACT DC needs to be able to hand off the care to community providers who can take the time to follow up with parents and patients to make sure that they are following these instructions. And parents need to understand and help their kids stick with the medications and care plan—and to speak up when they are confused.AC_dots-05Finally, doctors and parents need to make sure that the adults at school—where kids spend most of their daytime hours—know about each child’s asthma diagnosis and individual plan. School nurses can help kids remember to take their daily medications and use their emergency inhalers before exercise—and when they feel symptoms coming on.

We know how to manage children’s asthma, and we know everyone we need on the team. Now we need to make sure the team works together. AC_footer-02

Illustration by Daniel Wolfe, Urban Institute. 

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In Indian Country, improved housing starts with a good foundation

Author: Nancy Pindus

| Posted: April 18th, 2014

Why include economic development in a report about housing in Indian Country?  Anywhere in the U.S., the local economy drives economic wellbeing and people’s ability to improve their housing conditions, and Indian Country is no different. Both on and off tribal lands, employment and business opportunities affect housing needs, including people’s ability to afford, maintain, and form new households. Our new HUD-funded study of American Indians and Alaska Native (AIAN) housing conditions provides the latest information on economic development in Indian Country—and why it matters for housing.

In the 1990’s, Indian Country’s economic development improved substantially, attributed in large part to the shift in U.S. government policy furthering self-determination for tribes by allowing them to control more jobs, take over program and activity operation, and better allocate federal funds to meet their needs. With more freedom to select their own path, many chose to strengthen their own governance to foster entrepreneurship.

Until the recession in 2008, Indian Country’s economy continued to prosper and even outperform the rest of the nation in some growth indicators:

  • New business ownership outpaced the rest of the US. The number of Native-owned businesses increased nationally by 7 percent, growing from 102,000 in 1992 to 201,000 in 2002, compared to just 2.9 percent for all U.S. businesses. This growth continued over the next few years and by 2007, there were 237,000 Native-owned businesses.
  • Employment grew faster than the national average. From 2000 through 2007, employment in Native counties (contain all or part of one or more tribal areas) grew by 303,000 per year. The Native American county growth rate was 1.4 percent per year, dwarfing the 0.36 percent average for all non-Native American counties.

AIAN

  • Lending to support economic development increased. Native Community Development Financial Institutions (CDFIs), including loan funds, credit unions, and banks, improve access to capital  by providing credit and other financial services to underserved tribal communities. The number of certified Native CDFIs grew from only three in 2000 to 72 by mid-2012. Since 2002, the Treasury’s CDFI Fund has awarded more than 175 grants totaling $31 million to Native CDFIs, which serve nearly 100 tribal communities.
  • Businesses and economic development activities diversified. Tribally-owned business expanded and diversified both on and off reservations to include more hotels, resorts, golf courses, manufacturing, oil extraction companies, natural resources, and wild game hunting. Gaming has also been an important force behind economic growth in selected areas of Indian Country, though a large share of revenues flow to a relatively small number of tribes and benefit a small percentage of the AIAN population.

And then came the recession. Though their economy was strong through 2007, the recession hit Indian Country hard. From 2007 to 2010, the number of jobs dropped by 3.0 percent per year compared with a 2.3 percent drop annually for the rest of the country.  The effects were uneven across regions: places that performed best earlier in the decade typically faced the sharpest reversal later on. And despite a cushion from federal subsidies, competition for federal and state funds, a loss of private revenue, and the overall need to do more with less took a toll on CDFIs.

Is there hope for housing? The economic progress that began in the 1990s may have stalled in 2008, but the improved economic and government infrastructure provides a much more favorable environment for economic development and entrepreneurship. Native CDFIs have used various federal economic development funding sources, such as New Markets Tax Credits and corporate funding, to support small business lending and attract manufacturing companies to reservations.

The opportunities to expand business financing  as well as entrepreneurial energy hold promise for economic development in Indian Country. New data collection under way in our housing study will further explore the relationship between economic development and housing.

More research is available on the Urban Institute’s new Native American Communities landing page 

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How data can help us meet global needs for public services

Author: Sarah Rosen Wartell

| Posted: April 17th, 2014

 

 

SRW_WUF

As the global population continues to rapidly urbanize, government, enterprises, and residents are beginning to use data more regularly to tackle pressing urban challenges. Embracing data can help to develop and eventually achieve the Sustainable Development Goals, which will succeed the Millennium Development Goals when they expire in 2015.

That’s why I was heartened to see such emphasis on the rigorous and creative use of data at last week’s World Urban Forum (WUF) in Medellin, Colombia. Each year, the United Nations Human Settlements Programme (UN-Habitat) convenes WUF to discuss issues facing cities and communities around the world. This year’s forum focused on “Urban Equity in Development – Cities for Life.”

As a speaker on WUF’s Basic Services: Local Businesses For Equitable Cities dialogue, I had the chance to discuss how data can empower the private sector to help improve basic services and infrastructure in quickly growing cities around the world.

By making data more available and accessible, governments at various levels can highlight market opportunities for services with social benefits

Even in extremely low-income areas, there is an economy, but residents usually pay too much and get too little. If there were better information about the needs and purchasing power of these communities, it could prompt better businesses to bring in higher-quality services to meet the demand.

For example, in the United States, NGOs and the government documented neighborhoods where people had limited access to fresh foods. Research revealed the SNAP benefits that poor residents received were frequently spent outside the neighborhood or at fast food providers.

Having that information at hand can allow community development financial institutions to lend capital to bring in stores that offer fresh food to poor communities. Increased competition improves the quality of service. Investors are better able to lend when they have evidence of aggregate purchasing power, even if each consumer has only a few dollars to spend.

Residents can collect data on their own communities that benefit government and private service providers

It is difficult for the public or private sector to provide services to communities in which existing amenities, challenges, and infrastructure are not well documented. Citizen-generated information can supply the data needed to inform service provision and investment decisions.

In Solo City, Indonesia, the nonprofit Solo Kota Kita asks local leaders to submit basic information about their communities: number of households, water use, school attendance, land tenure, and more.

The data are turned into a Mini Atlas, a neighborhood profile accessible to all citizens. With assistance from USAID, UN-Habitat, and the Ford Foundation, the city government sponsors this program  and uses the data to support policy design and public projects.

Entrepreneurs can support basic public services with creative data collection methods

Cell phones and other basic information technology can generate information that both government and the private sector can use to target basic services where needed and deliver them more efficiently.

I recently learned about NextDrop, a business in the southern state of Karnataka in India. There, people used to sit around waiting for the unpredictable moment when water services would flow. Now citizens pay a small fee to receive text messages when water will be switched on, so they can be ready to collect water to meet their immediate needs.

In another example, data collected by a company called ShotSpotter could have application in cities around the world. ShotSpotter uses sensors to gather information about gunshots in various cities in the United States to aid policing and help decisionmakers develop crime-fighting strategies. Researchers with the Urban Institute’s Justice Policy Center are also using this data to help improve the quality of policing in urban neighborhoods.

Principles for data and service delivery

These are just some of hundreds of examples of how public or citizen data can strengthen government and private sector service delivery. But whether government is a data provider or user, it has a core responsibility to embrace the power of data to improve lives of residents and make cities more equitable. I believe governments must establish:

  • an open data culture,
  • a respect for evidence-based policy,
  • a norm of openness and transparency, and
  • a system of accountability to ensure that open data leads not merely to new business opportunities, but to improvement in the services and opportunities available to citizens.

No matter who collects and provides the data, these principles facilitate the spread of information—information that will improve private and public provision of services and citizens’ basic quality of life.

As the international community turns its attention to the creation of the Sustainable Development Goals, it must embrace the growing capacity for data collection and take advantage of the opportunities it presents.

Photo by the Urban Institute's Sharon Carney, of Sarah Rosen Wartell at the World Urban Forum.

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Beyond affordability: rental housing problems in Indian Country

Author: Jennifer Biess

| Posted: April 17th, 2014

Last month, we released an interactive map illustrating the pervasive lack of decent and affordable rental housing for extremely low-income (ELI) households in the US. We identified the size of the deficit between the number of decent, affordable units and ELI households for every county. Surprisingly, counties that include Native American tribal lands, which have persistently high poverty and unemployment rates, are some of the places where the shortfall is smaller. But does that mean that housing problems are less severe in Indian Country?

The map below shows the locations of tribal areas throughout the continental US and Alaska where nearly one million American Indians and Alaska Native (AIAN) alone individuals lived in 2010.

TribalRes_map

Consistent with the affordability map, we found that housing is more affordable for Native American renters living in larger tribal areas (data unavailable for smaller areas) than the national average. About 38 percent of AIAN renter households living on larger tribal areas were cost burdened (paid 30 percent or more of their income for housing) compared to the national renter average of 51 percent.  Further, the average rent for Native American renter households living on larger tribal areas was about half the national average at about $440.

But there’s another way to consider those same numbers. Even though the average rent is very low, nearly 4 in 10 AIAN renter households pay more than 30 percent of their incomes on housing. That’s still a problem – a poverty problem (32 percent of Native Americans live in poverty in tribal areas, more than double the national rate for non-Natives).

And cost isn’t the only issue to consider when thinking about housing problems in Indian Country. While most US housing units have complete kitchen and plumbing facilities – meaning hot and cold running water, a flush toilet, and a tub or shower, a sink with a faucet, a stove or range, and a refrigerator – higher shares of households in Indian Country do not. On larger tribal areas, 3.3 percent of AIAN renter households lacked complete plumbing, four times the national rate. In Arizona and New Mexico 10 percent of all AIAN households lacked complete plumbing, and in Alaska the share was even higher at 18 percent. These shares have gone down over the decade, but remoteness, challenging climates, and lack of infrastructure mean any progress is hard won and difficult to maintain.

AIAN households are also more likely to live in overcrowded housing situations (more than one occupant per room) than households nationally. On tribal areas, 13 percent of AIAN alone renter households are overcrowded, more than double the six percent national rate. We don’t know the extent to which Native Americans choose these living situations because of cultural preferences for intergenerational living arrangements or as an effort to make housing more affordable, but either way the housing units in which they live may not be large enough to comfortably accommodate their residents.

To improve housing conditions on tribal land, we need to better understand housing conditions there as well as these local and cultural factors. We are currently conducting the first study of its kind on Native American housing needs in nearly 20 years, of which this analysis is a part as well as a nationally representative survey of Native American households on tribal land, visits to 24 tribes and other efforts that collectively will shed light on these issues.

More research is available on the Urban Institute’s new Native American Communities landing page

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In Washington, DC, is childhood asthma part of a poverty trap?

Author: Zach McDade

| Posted: April 17th, 2014

 

 

unhealthyAir

When I was a kid in Boulder, Colorado, one of my soccer teammates had asthma, but, like a lot of kids with that condition, it didn’t slow him down. Although asthma affects nearly 1 in 10 children, it is a well-understood and highly treatable disease.

It’s therefore concerning that so many low-income kids—often black or Latino—in Washington, DC, suffer regular, negative consequences of asthma (among the highest rates in the nation). I suspect that’s because it’s yet another example of the pernicious cycle of poverty. In fact, research shows that children from low-income families have far less control over asthma and higher morbidity from the disease than their higher-income peers.

Why?

Evidence is mounting that poverty is a vicious cycle that produces other negative outcomes, which in turn deepen poverty. For example, children born into poverty are much likelier to be poor adults, and so their kids are likelier to be poor. The rise of long-term unemployment has plunged many families into poverty, and being in poverty increases your chances of being unemployed for a long time. Austerity measures like sequestration cuts to unemployment insurance and food stamps all compromise family finances and deepen the cycle.

Is the same thing playing out with asthma in DC? A qualitative study by my Urban Institute colleagues sheds some light on the problem.

Poverty puts up barriers to treating asthma

For DC’s large low-income population, it’s clear that where you live matters for getting effective asthma treatment. Families in many communities have poor access to transportation to the doctor. They also have fewer available doctors. And many low-income, especially single, parents cannot take time away from work during doctors’ business hours.

What’s more, much low-income housing comes with a host of asthma triggers, whether it’s proximity to pollution or other toxins in the neighborhood or, as many interviewees reported, exposure to dust, mold, or other negative conditions within the home.

Asthma can also get in the way of a child’s education because these problems get compounded at school. Low-income kids tend to need even more vigilant asthma monitoring and treatment at school, for which most schools are simply not equipped. And when low-income families either don’t have the resources to get a second school inhaler or the bandwidth to ensure that kids carry one every day, asthma problems can compound at school.

But asthma can also lead to greater poverty

Poverty can worsen asthma, but worse asthma, in turn, can deepen a family’s poverty.

Many parents reported that, in order to care for their children’s asthma, they had to take time off from work. But many low-income parents don’t have paid time off or flexible schedules, so they were fired for taking too much time or quit preemptively because they knew they would get fired anyway.

So, for many families, there is a direct tradeoff between treating a child’s asthma and being employed. If they choose treating the asthma, they can lose their income, making it even harder to get good medical care, move into a healthy home and neighborhood, and afford the necessary medication and equipment to treat asthma.

A byproduct is that those families often end up getting expensive, publicly funded treatment in the hospital’s emergency department.

Can we break the cycle?

To be clear, these stories are anecdotal and do not constitute a statistically sweeping claim. But they add to the growing mountain of evidence that poverty is a trap with a clear conclusion: if we spend money now to break people out of the trap, then they’ll be healthier, more productive and self-sufficient, and in less need of support later.

It’s an investment: spend some now, save more later.

There are some obvious ways to break a poverty-asthma trap. We can more vigorously enforce housing quality regulations and mandate that employees with documented asthma needs be exempted to care for their children. We could also incentivize clinics to maintain non-standard hours and work with organizations like ImpactDC – an emergency department intervention program - to build better asthma-treatment routines into low-income neighborhoods and schools.

Image: Standing outside her home on East Street in downtown Raleigh, N.C., Lonnette Williams, right, talks Wednesday, Oct. 5, 2005, about living in Raleigh's South Park neighborhood. Children living in low-income areas like South Park, which has particularly poor quality air, are at greater risk of asthma problems. (AP Photo/Karen Tam)

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How “zero-sum funding” can impact the whole criminal justice system

Author: Janine Zweig

| Posted: April 16th, 2014

 

 

Domestic Violence Safe Houses

In a recent story in The Crime Report, reporter Deirdre Bannon brings to light a critical policy issue that demands our attention: the tensions related to zero-sum funding of criminal justice programs.

Bannon’s story describes how the Department of Justice will penalize states found to be noncompliant with Prison Rape Elimination Act  standards with a five percent cut in federal funding for corrections. However, Bannon also reports the money will be filtered back to states for them to improve practices to become compliant. Sounds good, right?

That is, until you read that these funds “are being taken from a category of grants that support violence against women programs, drug courts, and reentry services so individuals stay out of prison.”

The funding switch could force some states to cut these types of programs entirely, leaving criminal justice leaders across the country with tough choices.

When we offset new funding by cutting established funding, the implications for public safety are problematic at best and harmful at worst, particularly when it comes to serving victims of crime.

For one thing, it asks us to choose between victims. Cutting victim services and programs to prevent and respond to domestic violence, sexual assault, and stalking through the Violence Against Women Act for the sake of programs to prevent and respond to prison rape may leave groups of victims without assistance. All victims have a right to the support and resources they need to recover and move forward after being violated.

Cutting drug courts and reentry programs that rehabilitate offenders also presents a no-win solution. These interventions are in the best interest of public safety, because they decrease the odds of reoffending. In our five-year study of drug courts, we found that those who participated had lower relapse rates and committed fewer additional crimes—all types of crimes—than those who didn’t.

We also know that high-quality reentry programs can be critical for the success of returning prisoners, and this body of knowledge is growing. Programs that effectively prepare them for employment, offer education and vocational training, and provide stable housing help reduce the likelihood that they will reoffend. If we can lower their odds of committing another crime, then we help prevent others from becoming crime victims.

As the research shows, programs that address both victims’ and offenders’ needs benefit society as a whole, and cutting one at the expense of another leaves whole populations vulnerable.  We know that justice can and should hold offenders accountable, while implementing practices that prevent further crime. And justice can and should restore victims’ well-being and mend the breach in the social contract that the crime imposed. Justice for victims, justice for offenders, or public safety for all?  Why should we have to choose?

Photo: A California domestic violence shelter, which provided beds for 12, at a cost of $60,000 a year, was closed June 30, when it lost state funding due to the failure of the Gov. Arnold Schwarzenegger and Lawmakers to reach a budget. (AP Photo/Rich Pedroncelli)

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How being poor in DC makes kids’ asthma worse

Author: Nicole Levins

| Posted: April 16th, 2014

 

 

athsma

In the United States, more than 7 million children suffer from asthma. But in spite of the chronic and sometimes life-threatening nature of the disease, most of these kids lead active, healthy lives.

That’s not the case for some low-income families in Washington, DC. Asthma’s a big problem for the relatively small city, where the proportion of children suffering from the condition is one of the greatest in the nation.

Fortunately, DC is also home to IMPACT DC, an emergency department-based intervention that has helped reduce the number of emergency room visits from low-income children with asthma. But despite the program’s effectiveness, lots of DC kids and caregivers are still struggling to manage the disease.

So, how can we help everyone breathe a little easier? Urban Institute researchers, led by Marla McDaniel, teamed up with IMPACT DC to interview 33 players involved in asthma treatment—from parents to primary care physicians to IMPACT DC’s educators—to figure out why it’s so hard to treat asthma among DC’s poorest kids. In their own words, here are five potential factors.

Limited time

Low-income caregivers are often forced to balance parenting duties with inflexible jobs and non-standard working hours. Though children’s medical needs come first, it’s sometimes at the expense of the job that helps pay for the treatment.

“…I had to quit jobs before because she had an asthma attack three days in a row… They won’t let me take time off, so I quit.” - Caregiver

For educators and health care professionals, limited time with patients and caregivers makes it difficult to address all concerns and answer all questions.

“…Time is a huge factor... In most primary care visits, you have 15 minutes to cover the entire health of the child… the amount of time physicians have for health education is almost none...” - Asthma educator

Lack of management

Who’s in charge of managing a child’s asthma treatment? For children with multiple caregivers, there’s often no one person ensuring that the child sticks to the treatment plan.

“[Having] multiple caregivers is a strong indicator of poor adherence, for obvious reasons. Usually only one caregiver comes [to] the visit, and frequently it’s the caregiver with the most time on their hands...  But it’s not necessarily the one with the most power in the family dynamic...” - Asthma educator

Sometimes, the responsibility is left up to the child.

“When I am at work then she call[s] me. 'Mommy, it’s time for medicine,’ and I say, ‘OK, go do your thing.’ She turns it on and uses it… She knows what she[‘s] doing… But my son, I can’t trust him with nothing! He’s only four.” - Caregiver

Difficulty accessing care

In DC, the best doctors and specialists are often out of reach for those with low-incomes—located in the less transit-oriented suburbs and Northwest.

“[For low-income families in poor neighborhoods,] getting to the doctor is harder. Once you get to the doctor, you wait longer, so you’re less likely to go… And you lose an entire day of work.  And these are the families who also tend to have the least flexible work schedules.” - Asthma educator

“Unhealthy” housing

Cheaper, older apartments—where many low-income DC families live—can host a number of asthma triggers.

“We don’t have a thermostat to control the heat in the basement apartment.  It gets so hot in there and we have to keep the windows open all the time.” - Caregiver

“We had to move because there was something in the carpets [that was triggering asthma attacks]…” - Caregiver

Lack of adequate health coverage

Most doctors agree that Medicaid and other insurers could do a better job covering routine care for low-income patients, which could go a long way in preventing attacks and hospital visits.

“…Not all of the payers are allowing kids to have two inhalers at the same time. We have one for home, one for at school, and they don’t pay for both…” - Primary care physician

“One of the things [Medicaid] could do better is managing claims and hiring educators to look at claims to see who is filling what prescriptions and when and how often. They could then work with those families when they see prescriptions are not being filled.” - Primary care physician

“It’s much more cost-effective for insurance to keep [a] child out of the ER. There’s a lot of benefit for the insurance.” - Primary care physician

Photo from Shutterstock.

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What charter school growth means for cities and neighborhoods

Author: Megan Gallagher and Simone Zhang

| Posted: April 15th, 2014

Charter schools are one of a number of school reform strategies that aim to expand choices for families. Other school choice policies include open enrollment, magnet or alternative schools, private school vouchers, tax credits for households paying for private school, and homeschooling. Although the number of cities with open enrollment and magnet schools is growing, charter schools represent the most prevalent type of school choice strategy in the United States today.

Charter schools are independently governed and run public schools that are supported with public funds. In the 2011-12 school year, there were about 5,700 charter schools in 42 states serving over 2 million children. That represents a 186 percent increase in the number of charter schools and a 359 percent increase in the number of students attending charter schools since the 2000-01 school year.

Charter school students still represent a small proportion of all students in the US (4.2 percent), but the speed at which their numbers are growing and where these students are located raise important questions for students, families, neighborhoods, and cities.

Where are charter schools located?

Charter schools are more prevalent in cities than they are in suburban or rural areas; 55 percent are located in central cities (compared with 24 percent of traditional schools), 29 percent are located in suburbs and towns (compared with 42 percent of traditional schools), and 16 percent are located in rural areas (compared with 34 percent of traditional schools). Their reach is increasing, too—they represented 12 percent of all public schools in cities in 2011-12, up from 7.5 percent in 2005-06.

Charters

This pattern is also reflected in enrollment patterns. A greater proportion of students attend charter schools in cities (8 percent) than in the suburbs, towns, and rural areas. The map below illustrates where the concentration of students attending charter schools is greatest, highlighting distinct state patterns that largely reflect differences in charter legislation.

What does charter school growth mean for cities?

Right now, there is little empirical evidence about how charter schools will affect neighborhoods and cities. We don’t know how growing demand for charter schools affects neighborhood residents or institutions. We don’t know how families communicate or build trust with their neighbors in places where children attend many different schools. And we don’t know whether charter school choices in cities will change where families with children choose to live and stay.

What we do know is that although the proportion of public school students attending charter schools is currently still relatively small, their growth in cities will likely have important implications for cities and their neighborhoods.

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The upside of tax time has a downside, too

Author: Caroline Ratcliffe

| Posted: April 14th, 2014

 

 

taxRefund

The deadline to file our taxes has arrived once again. While this deadline looms over many of us, for low-income working families, it can be an opportunity for greater economic security.

Why? Tax credits, such as the earned income tax credit (EITC), provide a substantial infusion of resources to low-income working families, making tax time a time when they can meet their current financial obligations, pay down their debt, and maybe save a little. For a married couple with two children, for example, the EITC can be as high as $5,372 this year.

The benefits and opportunities are considerable, but for the roughly 17 million adults without bank accounts, it can be difficult and expensive to get access to that refund. The unbanked often turn to expensive check-cashing services or pay high fees on refund anticipation checks or loans to avoid long waits for a paper check.

What can help? Offering people a reasonably priced financial product at tax time, a product that provides electronic access to tax refunds via direct deposit and can be used thereafter for everyday transactions such as paying bills, receiving paychecks via direct deposit, and withdrawing money from ATMs.

In 2011, the Department of the Treasury initiated the MyAccountCard, a direct mail pilot program offering low-income unbanked and underbanked families the option of receiving their tax refund on a prepaid card. The reloadable MyAccountCard could then be used on an on-going basis for everyday transactions.

The pilot evaluation, which I conducted with my colleague Signe-Mary McKernan, found that the MyAccountCard appealed most toits target population: unbanked adults. Those most likely to be unbanked were three times more likely to apply for the card and twice as likely to deposit their tax refund into the card account, compared with those who were most likely to have a bank account.

There was also relatively high repeat use of the MyAccountCard for tax refund deposits. Nearly a quarter (23 percent) of people who directly deposited their tax refund into the MyAccountCard in year one did so again the following year.

What influenced MyAccountCard usage? Cost was a big factor. A $4.95 monthly fee decreased applications by 40 percent and the likelihood of depositing a tax refund into the card account by 50 percent, compared with no monthly fee. The linked savings account and card messaging (safety vs. convenience) did not impact take-up or use.

The federal government isn’t the only entity in the prepaid card market. Tax preparers have their own prepaid card products, but electronic receipt of refunds onto these cards is available only to filers using that preparer. Some states also offer prepaid cards, but these generally only allow people to spend down their state refunds—the card can't be used to accept federal refunds or as an ongoing account to manage finances and build savings.

The federal government offering a reloadable prepaid card at tax time can help consumers get their tax refunds quickly and safely, avoid expensive alternative financial services, and connect them with the financial mainstream. It can also save the government money, as electronic delivery of tax refunds cost roughly one-tenth as much as paper checks.

Access to the prepaid card should be easy, such as by including the card as an option on the tax form. Because of the national scale, the government would be in a position to negotiate well-priced products and provide oversight to ensure that the product and its pricing are transparent to consumers.

A program like the MyAccountCard also provides a credible platform for implementing an EITC saver’s bonus to promote and incentivize saving among low- and moderate-income tax filers—giving them a financial incentive to save and build wealth that many high-income people enjoy.

Prepaid cards at tax time will make tax time a little easier on low-income unbanked families—and provide them with a valuable tool to cover their banking needs all year long.

Tax image from Shutterstock.

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