Center on Assets, Education, and Inclusion

  1. Opportunity Investment Accounts: A Proposal for an Integrated Asset Building Mechanism for Youth in Foster Care

    We should not lose sight of moments in our collective history when we, as a country, have dared to dream and, as a result, were able to leap forward. The race to the moon was just such a moment, when we were “pushed” by the Soviet Union’s early advantage in the “space race” to unshackle ourselves from our limited imagination and as a result developed new technology to explore space. The U.S. foster care system needs a similar push to move away from an exclusive focus on survival policies for foster care youth and move toward including an asset-empowered agenda that can provide youth in foster care with the opportunity to thrive. This report looks at adapting CSAs to work better for Foster Care Youth.

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    Authors

    William Elliott, Gina Chowa

    Brief Year 2019

  2. The Impact of Grocery Store Rewards Cards

    This study conducted two cluster randomized trials using household-level random assignment to test the impact of a rewards cards program at two different locations: Wabash County Indiana and the City of St. Louis. Findings show the treatment group in Indiana had a greater than three-fold increase in savings activity in CSAs, and in St Louis had a greater than seven-fold increase in savings activity in CSAs. These findings suggest that rewards cards can be an effective strategy for engaging families of different backgrounds in saving activities. 

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    Authors

    William Elliott, Nicholas Sorensen, Megan O’Brien, Zibei Chen, Briana Starks, Haotian Zhen

    Working Paper Year 2019

  3. White Americans Have a Reason to Be Mad about Wealth Inequality

    Information about the nature and extent of wealth inequality among Whites can play a role in eliminating misconceptions and reframing the discussion about wealth redistribution as essential to restoring hope in the American dream and imperative to improving the life chances of all. Using data from the Panel Study of Income Dynamics, we find that the top quintile of White wealth holders has 212 times as much wealth as the bottom quintile. Further, multi-dimensional descriptive analyses from 1999 to 2015 indicate that median wealth has increased 46% among White households in the top 20% of both the wealth and income distributions. During the same time period, wealth holdings decreased among White household in the bottom 20% of both economic distributions. These data suggest that wealth inequality is a problem not only for Black households in America, but for White households as well. Thus, wealth inequality is not just a question of discrimination and racial disadvantage but is rooted in the fundamental nature of the American economy.

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    Authors

    William Elliott, Elizabeth Burland, Briana Starks, Trina Shanks

    Working Paper Year 2019

  4. Children’s Savings Account Program

    Findings from this study and past studies suggest that a CSA alone may not catalyze improvements in attendance, math, and reading; it may take some engagement with the accounts. But, while these findings are promising, they are not definitive and more research is needed. This is perhaps particularly notable given the relatively small K2C account balances at this stage (average total value of accounts that have had at least one family contribution is approximately $907 by the fourth year; average contribution value of $709).

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    Authors

    William Elliott, Melinda Lewis, Megan O'Brien, Christina LiCalsi, Leah Brown, Natalie Tucker, Nicholas Sorensen

    CSA Report Year 2018

  5. Lessons Learned from Children’s Savings Account Programs: Tools to Leverage Spending to Facilitate Saving among Low-Income Families

    Key Insights

    • Educators, policymakers, and advocates concerned about persistent achievement gaps, stagnant upward mobility, and college unaffordability are increasingly turning to Children’s Savings Accounts (CSAs) as a policy intervention for catalyzing educational opportunity and greater equity.
    • While state-run 529 college savings plans largely benefit middle- and upper-income families, these financial instruments can serve as platforms for CSAs in ways that help to more equally distribute the benefits of college savings systems.
    • Asset accumulation in CSAs can be substantial. For example, some CSA models can help families accumulate as much as $31,483 by the time their child reaches 18, if they start to save at birth, use an investment vehicle such as a 529, and receive transfers and incentives that amplify their savings efforts (here, assuming an initial deposit of $500, annual family savings of $600, and $300 in savings matches).
    • The provision of CSAs and the supports and features that accompany them results in family savings rates between 8% to 30% for opt-out CSA programs and about 40% to 46% for opt-in CSA programs. While this saving reflects authentic engagement and, often, considerable family sacrifice, CSA programs have been in search of a solution to increase saving.
    • Combining CSAs with reward card programs may be one way to improve saving outcomes and increase wealth accumulation, particularly among low-income families whose ability to divert resources from consumption to saving is necessarily limited. 

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    Authors

    William Elliott

    CSA Report Year 2018

  6. Contribution Activity and Asset Accumulation in a Universal Children’s Savings Account Program

    San Francisco’s Kindergarten-to-College (K2C) is a Children’s Savings Account (CSA) program that provides a savings account to all kindergartners in the public school system to save for postsecondary education. This study is the first analysis of families’ contributions to the K2C accounts and how those contributions vary by student characteristic and school context. Following a review of existing research regarding college saving by American families in general and, specifically, by those participating in other CSA programs, this study examines contributions as one manifestation of families’ engagement with the K2C accounts. In addition, the study explores how the particular features of the K2C program manifest in asset accumulation and contribution activity, as well as how individual and school-level characteristics may influence observed interactions with the K2C accounts. This research provides insights into a CSA program that is the oldest and one of the largest in the country, and it offers lessons for policymakers and CSA administrators considering interventions to encourage college saving among families with school-age children.

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    Authors

    William Elliott, Melinda Lewis, Megan O'Brien, Christina LiCalsi, Leah Brown, Natalie Tucker, Nicholas Sorensen

    CSA Report Year 2017

  7. Harold Alfond College Challenge (HACC) 2017 Savings Report for Households Who Opted-In to the Program from 2008 to 2013

    New This report provides a preliminary descriptive examination of aspects of Maine’s Harold Alfond College Challenge (HACC) Children’s Savings Account (CSA) Program1. Specifically, the Center on Assets, Education, and Inclusion (AEDI) uses data provided by the Finance Authority of Maine (FAME) for NextGen College Investing Plan, Maine’s 529 college savings plan (NextGen or Next College Investing Plan) accounts opened as part of the HACC pilot in 2008 and the statewide opt-in CSA program in 2009-2013 to consider how account opening and family contribution differ by family income and across time, as well as how family saving and HACC features contribute to asset accumulation by these households.

    This report is the first product of a research partnership between the Alfond Scholarship Foundation and AEDI. Future research will center on more rigorous analysis of the savings data described here, as well as examination of outcomes for children enrolled after the Harold Alfond College Challenge shifted in March 2014 to automatically award the $500 Alfond Grant to all children born Maine residents, rather than requiring families to first open a NextGen account. Additional research will also include qualitative consideration of families’ experiences with the HACC and planned surveys to assess effects on academic achievement, college-saver identity development, and educational expectations in both the opt-in and current, opt-out, iterations of the HACC. Given the prominence of the Harold Alfond College Challenge in the CSA field, considering how Maine’s CSA is affecting financial and other preparation for college and how those effects may transform children’s outcomes may have important policy implications.

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    Authors

    Megan O'Brien, Melinda Lewis, Eui Jin Jung, William Elliott

    CSA Report Year 2017

  8. Savings Patterns and Asset Accumulation in New Mexico’s Prosperity Kids Children’s Savings Account (CSA) Program: 2017 Update

    New Mexico’s Prosperity Kids Children’s Savings Account (CSA) program provides incentives, financial education, and peer support to encourage participants, most of whom are relatively low-income Latino families, to save for their children’s futures. Nonprofit Prosperity Works leverages social networks and community partnerships in the Albuquerque, New Mexico area to recruit accountholders. While the particular features are somewhat unique to this model, Prosperity Kids evidences the hallmarks of Children’s Savings Account policy: initial seed deposits, facilitated or universal account opening, savings incentives, and long-term asset ownership (Goldberg, 2005; Sherraden, 1991). Those who open Prosperity Kids CSAs receive a $100 initial seed deposit and up to $200 in a 1:1 match for their savings per year, over ten years.1 Parents may also earn benchmark deposits for completing activities associated with child development and academic achievement. As is the case in many CSA programs, these incentives are financed with a mix of philanthropic and public dollars. Prosperity Kids accounts are custodial, held by Prosperity Works until used for postsecondary education or, when the child turns 23, for ‘transition to a stable adulthood’, such as homeownership or entrepreneurship.

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    Authors

    Megan O'Brien, Melinda Lewis, Eui Jin Jung, William Elliott

    CSA Report Year 2017

  9. Savings Patterns and Asset Accumulation in the Promise Indiana Children’s Savings Account (CSA) Program: 2017 Update

    This study examines patterns in 529 college savings plan account opening, family contributions, and asset accumulation by participants in the Promise Indiana Children’s Savings Account (CSA) program who are enrolled from Wabash County, Indiana1. While this report uses administrative data to focus on saving, savings outcomes represent only one metric of CSA “success.” Importantly, rigorous research suggests that the positive effects of CSAs on such outcomes as educational expectations (Kim, Sherraden, Huang, & Clancy, 2015) and children’s well-being (Huang, Sherraden, Kim, & Clancy, 2014) can be realized even if families are not contributing to the account (Sherraden et al., 2015). Indeed, the Promise Indiana design incorporates research evidence that simply having a CSA can catalyze other positive outcomes for children and families, including by reinforcing children’s sense of a college-saver identity (Elliott, 2013a). Many aspects of the Promise Indiana CSA initiative are designed to cultivate these effects and, as described below, are provided to all children within a participating school, whether or not their families have opened a 529 account or, certainly, begun to contribute. Therefore, the potential value of a CSA—including those offered through Promise Indiana—should not be viewed only in terms of the dollars in the account, and saving should not be considered the only worthwhile interaction with the CSA. At the same time, contributing to a Children’s Savings Account may be one way that expectations of college are communicated to children. Additionally, saving is a potentially significant source of asset accumulation for higher education and can help to provide a sound financial foundation for a child’s future. As such, analysis such as this adds to the growing body of evidence of CSAs’ effects on children and families. Importantly, direct comparisons to these measures in other CSA programs is complicated by acute differences in target populations, program design, and the savings context. However, to contextualize these findings, a review of account opening, saving, and asset accumulation findings from the CSA field can be found in earlier AEDI reports (e.g. Lewis et al., 2016; Lewis, O’Brien, & Elliott, 2017).

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    Authors

    Megan O'Brien, Melinda Lewis, Eui Jin Jung, William Elliott

    CSA Report Year 2017