Center on Assets, Education, and Inclusion

This study has three goals: (1) to provide an extensive review of research on the assets/expectation relationship, (2) to provide a conceptual framework for how children's savings effects children's college-bound identity (children's college expectations are a proxy for children's college-bound identity), and (3) to conduct a simultaneous test of whether owning a savings account leads to college-bound identity or college-bound identity lead to owning a savings account using path analytic technique with Structural Equation Modeling (SEM). Our review reveals asset researchers theorize about college-bound identity in two distinct but compatible ways: college-bound identity as a "linking mechanism", and college-bound identity as a mediator. However, there has been little theoretical development on the attitudinal effects of assets. In this study, we posit a conceptual framework for how children's savings affects children's college-bound identity. Findings from the simultaneous test of the assets/college-bound identity relationship suggest that savings has modest effect on college-bound identity and vice versa. A policy implication is that asset building policies that seek to build children's college-bound identity in addition to their savings may be more effective than policies that only seek to build children's savings.

This study extends previous analyses in several ways. First, in addition to parental wealth, the relationship between children's wealth and math and reading scores are examined. Second, we examine different mediating pathways that wealth may affect children's math and reading scores in a single path analysis model. The advantage of path analysis over traditional regression analyses, which are typically used in this area, is that researchers can get a glimpse of relationships among variables. Furthermore, mediation can be tested more easily and extensively in path analysis compared to regression. Third, we examine whether different forms of wealth (net worth, homeownership, and children's savings for school) have different effects. Forth, we examine whether wealth (parental and/or children's) effects vary across racial groups.