Need to Know: April 5, 2013: Working bridges

This week, “Need to Know” examines how behavioral economics is being used to encourage low-income workers to save for the future.

Correspondent William Brangham reports from Vermont how workers who have repaid emergency loans through automatic paycheck deductions continue to take the lower amount in their paychecks and save the difference after the loan is paid off. Then, correspondent Brian Epstein reports about a plan put forth by New York City Mayor Michael Bloomberg, which offers incentives to low-wage earners who save their tax refunds. Finally, Dan Ariely, professor of psychology and behavioral economics at Duke University speaks on how we think about money.

Read the full transcript.

Explore:

Savings and loans

William Brangham reports on companies that are helping their workers make it through tough times with “income advance loans.” Once the loan is paid off, many workers keep the automatic deduction and start saving as a habit.

Save USA

Save USA is a program created by New York City Mayor Michael Bloomberg and funded by federal, state, and private dollars. It’s designed to get low-income New Yorkers to put their tax refunds in a savings account instead of spending them right away.

American Voices: Dan Ariely

Dan Ariely, professor of psychology and behavioral economics at Duke University, talks about why saving money is so difficult for many people— and suggests that changes in policy could make it easier.

Web extra: Prescription for savings

In this Need to Know web extra, we meet the employees at Fletcher Allen Hospital in Burlington who have also taken advantage of the “Working Bridges” program.

3 things you need to know about behavioral economics

What exactly is ‘behavioral’ economics? For one, the concept shows that we don’t always behave in our best financial interests.

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Comments

  • http://www.facebook.com/ed.davis.9461 Ed Davis

    Love the Volunteer Income Tax Assistance (VITA) program and the ability to do your own federal and state returns offered by the United Way of the River Cities through myfreetaxes.com/uwrc. These are great programs through non-profit agencies that save low-income families serious money.