Lunch at the Labs

Prize Linked Savings

Here is a great idea that apparently has been around for a while but I just learned about it. It is called Prize Linked Savings (PLS) and solves two problems simultaneously:

        (1) Americans do not save enough money.
        (2) Americans love to gamble, even when the odds of winning are very low and they cannot afford it.

It works by taking a small amount of the interest from all savings accounts and uses that money to pay out cash lottery prizes. It has been very successful in places where it has been tried, but local governments in the United States want to keep their lottery monopoly and prevent its adoption in this country.

For more information listen to (or read the transcript of) the Freakonomics Podcast

        Lottery Loopholes and Deadly Doctors