Traditional theories of savings would lead observers to believe that low-income children are unlikely to accumulate any assets, given their limited incomes and their parents’ limited ability to transmit financial knowledge and skills. However, empirical evidence and institutional theory suggest that low-income children can indeed save and that crafting structures that can facilitate their saving—including Children’s Savings Accounts (CSAs)—may help savings to serve as a pathway to economic mobility for these disadvantaged youth.
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Elliott, W, Friedline, T., and Kakatoi, S. (2013). How CSAs facilitate saving and asset accumulation (Chapter 5 - Brief). In W. Elliott (Ed.), Giving children a financial stake in college: Are CSAs a way to help maximize financial aid dollars? (Biannual Report for the Assets and Education Field). Lawrence, KS: Assets and Education Initiative.