Jonathan Morduch - The financial diaries : how American families cope in a world of uncertainty

the financial diaries

The Financial Diaries

How American Families Cope in a World of Uncertainty

Jonathan Morduch & Rachel Schneider

Princeton University Press

Princeton and Oxford

Copyright 2017 by Jonathan Morduch and the Center for Financial Services Innovation

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Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540

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ISBN 9780-691172989

Library of Congress Control Number: 2016955128

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1 3 5 7 9 10 8 6 4 2

For Amy, Leon, Sam, and Joe
For Ben, Isabel, and Ezra

Contents

Acknowledgments

The idea behind the U.S. Financial Diaries project was not initially ours. Instead, we got lucky. The Citi Foundation and Ford Foundation felt it was the right moment to take a fresh look at the finances of American households, and they approached us with the idea. We were honored and not a little daunted. The foundations provided us with an initial planning grant in 2009 and, later joined by the Omidyar Network, saw the project through with a helpful mix of patience and impatience. They pushed us to move quickly given the urgency of families struggles, but they also allowed us the time needed to get the research right. While they offered insights and advice along the way, they imposed no restrictions on our conclusions or analyses. No doubt, they disagreedand may still disagreewith some of what we have written, but they never asked us to do anything other than describe the data accurately and tell the families stories as we heard them. We are deeply grateful to Frank DeGiovanni and Amy Brown at the Ford Foundation; Brandee McHale, Graham MacMillan, and Daria Sheehan at the Citi Foundation; and Chris Bishko and Tilman Ehrbeck at the Omidyar Network.

We are proud and humbled when we think about the families who shared their lives with us. This project required far more of participants than a typical research survey, both in terms of hours and openness. The families willingness to share both their highs and their lows, to answer probing questions not only about what they were doing but about why and how they got there, has shaped all of the ideas in this book.

The U.S. Financial Diaries project benefited greatly from earlier experiences with financial diaries, particularly the work of Stuart Rutherford, Orlanda Ruthven, and Daryl Collins. Daryl and her colleagues at Bankable Frontier Associates were critical to the development of the U.S. Financial Diaries project, working with us to adapt the international methodology to the U.S. context. We greatly value Daryls partnership.

For much of the project, Tim Ogden led the teams operations day to day. He was integral to the development and communication of our findings, not only as a reader and an advisor but also as a roll-up-his-sleeves editor and creator. His contributions can be seen on every page of this book.

The fieldwork was ably led by Nancy Castillo, who threw herself wholeheartedly into the project in its early years. She crossed the country consulting with experts, researched possible sites, developed and executed our initial project plan, and then recruited and managed the team of field researchers. The data analysis was conducted primarily by Anthony Hannagan and Julie Siwicki. Their ability to toggle between fine-grained views of individual households and big-picture technical analyses was essential to telling the families stories, both in the specifics and in the broad picture.

Like the families, the dozen field researchers who collected the data at the center of the project invested far more than the gift of their time. The trust they established with the families during the year of data collection made the project possible. We are grateful to Alex Bibb, Mayra Cerda, Karen Durgans, Luzdary Giraldo, Naishia Jackson, Fredy Llanos, Mithu Maniruzzaman, Olivia Montgomery, Karla Reyes, Joyce Roberson, Kyle Schoolar, and Julie Siwicki.

We were also ably assisted in ways large and small by Alicia Brindisi, Megan Carver, Deidre Ciliento, James Davis, Shannon Deere, Kate Marshall Dole, Cheryl Durgans, Maria Enache, Liz Engle, Stephen Juneau, Charlene Kim, Aishwarya Kumar, Mithu Maniruzzaman, Zac McDermott, Kristen McNeill, Andrea Parra, Spencer Perry, Caroline Preston, James Schintz, Zachary Seaverns, Viral Tarpara, and Caiying (Lisa) Xu. Barbara Kiviat, Jean Lee, Rourke OBrien, and Angela Profeta helped build and revise surveys and protocols to ensure that our questions would connect to broader conversations. Caitlin Weaver, JoAnne Williams, and Vivian Yela expertly managed budgets and administration.

Many people and organizations helped. Local partners in each research site made introductions to families, gave field researchers office space and encouragement, and provided opportunities to share findings. We have not listed these partners individually in order to preserve the anonymity of the research sites, but their dedication and hospitality were essential to the projects success.

We benefited from regular conversation with the community of researchers, policy wonks, and practitioners who are advancing ideas about how to improve household economic security. We are indebted to these fellow travelers. Some of their work is described in the book, but we could have written about many more. We especially thank the U.S. Financial Diaries Advisory Board: Oren Bar-Gill, Michael S. Barr, Ray Boshara, Janis Bowdler, Alan P. Branson, John Caskey, Jose Cisernos, J. Michael Collins, Sheldon Danziger, Randy Dotemoto, Kathryn Edin, Amelia Erwitt, Gina Harman, David John, Jeffrey Liebman, Cathie Mahon, Justin Maxson, Sendhil Mullainathan, Manuel Orozco, Leigh Phillips, William M. Rogers III, David Rothstein, Ellen Seidman, Luz Urrutia, and Sudhir Venkatesh.

The Aspen Institutes Financial Security Program launched a yearlong inquiry into income volatility at just the right time for us. We are especially grateful to the participants in their convenings, who helped us crystalize key arguments that appear in this book, sometimes even while hiking. We also appreciate the chance to try out ideas at the CFED Assets Learning Conference, EMERGE, and Money2020, and at events sponsored by the Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, Roosevelt Institute, University of Wisconsin, Yale, Princeton, the World Bank, and other institutions. At each of these events, we found our ideas prodded and strengthened.

We were fortunate to have readers who commented on all or part of the draft manuscript with gentleness and good humor, and in many cases a sharp red pen: Ray Boshara, Ajay Chaudry, Frank DeGiovanni, Tilman Ehrbeck, Quinten Farmer, Tim Flacke, Joel ben Izzy, Melissa Koide, Susan Lambert, Rob Levy, Signe-Mary McKernan, Ida Rademacher, Caroline Ratcliffe, Luke Shaefer, Daria Sheehan, Michael Sherraden, Viviana Zelizer, and James Ziliak. Ellen Seidman and Jennifer Tescher were especially kind to closely read an early draft of the full book.

Ted Weinstein, our agent, saw the potential for the book and helped us frame the overarching story. We have been wonderfully supported by Princeton University Press, especially Seth Ditchik, Joe Jackson, and Peter Dougherty. Jennifer Backer, Kathleen Cioffi, Tim Harper, Jessica Loudis, Caroline Preston, and Laura Starita helped turn the drafts into a polished book.