Gulzar Natarajan in 'Lottery Bonds'links to an article of Robert Schiller and ideas of Peter Tufano about'Helping Low-Income Families Save More'. Excerpt from Schiller's article:
"According to Tufano, the fundamental problem in encouraging low-income people to save is that they need the money not just to manage their lives years in the future, when they retire, but also to deal with short-term crises. But if government programs designed to promote saving by low-income people don’t tie up their money for many years until retirement, they will often succumb to temptation and spend the money frivolously.
Tufano approaches the problem with real sympathy for these people, and a realistic idea about how to help them: premium savings bonds. In addition to normal interest payments, these bonds have an attached lottery – an enticement to keep the money in savings. Low-income people manifestly enjoy lotteries, and they will acquire the habit of looking forward to the lottery dates, which will deter them from cashing in their bonds. But if a real emergency arises, they can get their money."
From the podcast, it appears that Peter Tufano himself came from a family which struggled to save for his education.
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