Center on Assets, Education, and Inclusion

  1. Assets and African Americans: Attempting to capitalize on hopes for children through college savings accounts

    Although some racial inequalities have lessened in the half-century since the passage of the first major civil rights legislation, the racial wealth gap remains and in recent years seems to be widening. Households with children are the least likely to be asset secure or have sufficient resources to enable investment in opportunities for mobility. Viewing inequality from this perspective indicates that what households are able to save and invest for the future might have a more lasting impact on the life chances of children than their current income and consumption. Summarizing data from the Saving for Education, Entrepreneurship, and Downpayment (SEED) Initiative, a quasi-experimental study that is part of a national demonstration of Child Development Accounts (CDAs) in the United States, this paper describes how African-American households engage with one important investment opportunity - college savings accounts for their pre-school children. Combining account monitoring, survey, interview and focus group data, we explore the reasons that many households chose not to open accounts or invest their own money. We offer suggestions for making asset development programs viable for low-income African-American families and their children.

    Citation

    Shanks, T., Nicoll, K., & Johnson, T. (2014). Assets and African Americans: Attempting to capitalize on hopes for children through college savings accounts. The Review of Black Political Economy, 41 (3) 337-356.

    Authors

    Johnson, Toni, Shanks, Trina R., Nicoll, Kerri Leyda

    Children's Savings Account Journal Article Year 2014

  2. Child development accounts

    Citation

    Elliott, W. and Lewis, M. (2014). Child development accounts (CDAs). The Encyclopedia of Social Work.

    Authors

    Lewis, Melinda

    Children's Savings Account Encyclopedia Year 2014

  3. Examining the Canadian Education Savings Program and its Implications for U.S. Child Savings Account (CSA) Policy

    While we believe that there are significant lessons to be learned from the Canadian experience with education savings programs, as the United States moves towards more comprehensive Children’s Savings Account (CSA) policy, we begin with the perhaps obvious acknowledgement that there are some noticeable differences in the political, educational, and economic contexts of Canada and the United States. For example, in 2011, Canada ranked first in overall post-secondary education (PSE) attainment among OECD countries, with more than 50% of adults ages 25 to 64 having some PSE credentials (Kenney, 2013), while the U.S. ranks 14th, with 42% attainment (OECD, 2012). Perhaps related, economic mobility rates—the likelihood that a child born into poverty will not stay in poverty as an adult—are far higher in Canada than in the U.S. (Corak, 2010). Analysis finds that a son raised in the bottom decile in Canada has about the same chances of reaching the top half of the earnings distribution as a third-decile son in the United States; being Canadian instead of American, then, provides as much of a mobility advantage as being born into a family three times more prosperous (Corak, 2010). Although income inequality is increasing in Canada, the distribution of economic advantage is still far more equitable than in the United States (Corak, 2010). This is transmitted to the PSE arena, as well, where the income attendance gap is smaller than in the U.S. (Belley, Frenette, & Lochner, 2011). Despite these and many other differences, there are enough similarities between the Canadian Education Saving Program (CESP) and, particularly, state-sponsored 529 savings programs in the U.S. that each can still inform the other in important ways.

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    Citation

    Lewis, M. and Elliott, W. (2014). Lessons to learn: Canadian insights for U.S. children’s savings account (CSA) policy. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Lewis, Melinda

    Children's Savings Account Report Year 2014

  4. Extending savings accounts to young people: Lessons from two decades of theory and research and implications for policy

    Citation

    Friedline, T. (2014). Extending savings accounts to young people: Lessons from two decades of theory and research and implications for policy. In R. Cramer & T. Williams Shanks (Eds.), The assets perspective: The rise of asset building and its impacts on social policy (pp. 203–223). New York, NY: Palgrave MacMillan.

    Authors

    Friedline, Terri

    Children's Savings Account Chapter Year 2014

  5. Harnessing Assets to Build an Economic Mobility System: Reimagining the American Welfare System

    Harnessing Assets to Build an Economic Mobility System provides new empirical insights that help to explain what so many Americans intuitively grasp, and what U.S. policy debates so studiously ignore: Upward economic mobility and a chance at financial security are slipping beyond the grasp of many households. This report examines the drivers of mobility by distinguishing between standard of living, which is related to consumption and available income, and economic mobility and wellbeing, which require assets in addition to income and fuel multiplier effects. The former is supported by the consumption-based welfare system, including programs such as Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP; formerly food stamps), which is designed to help households exit poverty and consume at a level consistent with a near-poverty level. Upward mobility and wellbeing is advanced by an asset-based welfare system, largely made up of tax credits and deductions that helps more advantaged Americans accumulate assets. By highlighting the significance of assets for achieving economic mobility and true wellbeing, this analysis emphasizes the importance of building policy structures capable of helping households generate assets, not just increase income. The report proposes Economic Mobility Accounts—tax-advantaged savings accounts that help Americans of all income levels save and accrue assets across the life course—as a policy structure that may once again make upward mobility accessible to all Americans.

    Citation

    Elliott, W. and Lewis, M. (2014). Harnessing Assets to Build an Economic Mobility System: Reimagining the American Welfare System. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William, Lewis, Melinda

    Wealth Transfer Executive Summary Year 2014

  6. Harnessing Assets to Build an Economic Mobility System: Reimagining the American Welfare System

    Harnessing Assets to Build an Economic Mobility System provides new empirical insights that help to explain what so many Americans intuitively grasp, and what U.S. policy debates so studiously ignore: Upward economic mobility and a chance at financial security are slipping beyond the grasp of many households. This report examines the drivers of mobility by distinguishing between standard of living, which is related to consumption and available income, and economic mobility and wellbeing, which require assets in addition to income and fuel multiplier effects. The former is supported by the consumption-based welfare system, including programs such as Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP; formerly food stamps), which is designed to help households exit poverty and consume at a level consistent with a near-poverty level. Upward mobility and wellbeing is advanced by an asset-based welfare system, largely made up of tax credits and deductions that helps more advantaged Americans accumulate assets. By highlighting the significance of assets for achieving economic mobility and true wellbeing, this analysis emphasizes the importance of building policy structures capable of helping households generate assets, not just increase income. The report proposes Economic Mobility Accounts—tax-advantaged savings accounts that help Americans of all income levels save and accrue assets across the life course—as a policy structure that may once again make upward mobility accessible to all Americans.

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    Citation

    Elliott, W. and Lewis, M. (2014). Harnessing Assets to Build an Economic Mobility System: Reimagining the American Welfare System. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William, Lewis, Melinda

    Wealth Transfer Report Year 2014

  7. Households' net worth accumulation patterns and young adults' financial well-being: Ripple effects of the Great Recession

    We examined households’ dynamic patterns of net worth accumulation between 1999 and 2009 and asked whether these patterns related to the financial health of young adults growing up in those households. Two patterns of net worth emerged—the first remained high and stable and the second experienced a precipitous decline between 2007 and 2009. Young adults who grew up in households with high and stable net worth also experienced the greatest benefit in financial health. Given wealth losses in the wake of the Great Recession and the ripple effects those losses may have had—and may continue to have—on households and their children, policies that stimulate wealth accumulation may be feasible and timely strategies for improving financial health.

    Citation

    Friedline, T., Nam, I., & Loke, V. (2014). Households' net worth accumulation patterns and young adults' financial well-being: Ripple effects of the Great Recession? Journal of Family and Economic Issues, 35, 390-410.

    Authors

    Friedline, Terri, Nam, Ilsung, Loke, Vernon

    Wealth Transfer Journal Article Year 2014

  8. If you build it, will they save? The Canadian Education Savings Program through a Children's Savings Account Lens

    In this webinar presentation, we'll be answering 3 core questions: Why Canada and why now? What are CSAs and what are they intended to achieve? What can we learn about CSA programming and policy design by looking at Canada's experience?

    Authors

    Lewis, Melinda, Black, Rachel

    Children's Savings Account Multimedia Year 2014

  9. Investing in children: Child Development Accounts as an early childhood intervention

    Child Development Accounts (CDAs)—specially designed accounts opened in children’s own names—are a preventive, economic intervention that can complement investments made by existing early childhood interventions and advance their mission of helping children reach their full potential. Poverty is an inhibitor of children’s opportunities for educational and economic advancement. Federal, state, and local governments have dedicated substantial resources to mitigating the effects of poverty. CDAs are a complementary strategy with great potential but one that is underutilized. The positive outcomes of CDA ownership and development can be supported by appropriate policy design and by providing appropriate, intentional preparation to children about their CDAs.

    Citation

    Friedline, T., & Schuetz, N. (2014). Investing in children: Child Development Accounts as an early childhood intervention. Washington, DC: New America Foundation.

    Authors

    Friedline, Terri, Schuetz, Nik

    Children's Savings Account Brief Year 2014

  10. Lessons to learn: Canadian insights for U.S. children’s savings account (CSA) policy

    Related items: Examining The Canadian Education Savings Program and Its Implications for U.S. Child Savings Accounts (CSA) Policy Webinar: Canadian Savings Education Report

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    Citation

    Lewis, M. and Elliott, W. (2014). Lessons to learn: Canadian insights for U.S. children’s savings account (CSA) policy (AEDI Brief 01-14). Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Lewis, Melinda, Elliott III, William

    Children's Savings Account Brief Year 2014

  11. Savings from ages 16 to 35: A test to inform Child Development Account policy

    This study examines savings from childhood to young adulthood with a sample of 14,223 individuals from the 1996 Survey of Income and Program Participation (SIPP). We employed a cohort sequential accelerated latent growth model that combined a series of cohorts to represent a common developmental trajectory spanning 19 years—ages 16–35—and accounted for relevant covariates. Descriptively, the proportions of savings account ownership increased steadily between ages 16 and 30 and then leveled off. In other words, a critical time for intervention may occur between ages 16 and 30 when the proportion of account ownership is increasing. Proportions of savings accumulation also rose steadily, with a mean low of $636 between ages 16 and 20 to a mean high of $1,160 between ages 31 and 35. Gender, race, employment status, and household income and net worth were associated with initial variability in savings at ages 16–20 and rate of change in savings over time through age 35. Results can inform policies and programs that open savings accounts for children as a way of helping them remain financially secure across their life course.

    Citation

    Friedline, T., & Nam, I. (2014). Savings from ages 16 to 35: A test to inform Child Development Account policy. Poverty & Public Policy, 6(1), 46–70.

    Authors

    Friedline, Terri, Nam, Ilsung

    Children's Saving Account / Financial Inclusion Journal Article Year 2014

  12. Smart Way to Save for College

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    Citation

    Cartwright, M. and Lewis, M. (June 10, 2014). Smart Way to Save for College. The Hill.

    Authors

    Cartwright, Matt, Lewis, Melinda

    Children's Savings Account Op-Ed Year 2014

  13. Solving the paradox of high college expectations: The role of children’s savings accounts

    Citation

    Elliott, W. (2014). Solving the paradox of high college expectations: The role of children’s savings accounts. In R. Cramer & T. Williams Shanks (Eds.), The assets perspective: The rise of asset building and its impacts on social policy. New York, NY: Palgrave MacMillan.

    Authors

    Elliott III, William

    Children's Savings Account Chapter Year 2014

  14. Student loan debt: Can parent's college savings help?

    Postsecondary education costs in the United States today are rising with an increasing shift from societal responsibility to individual burden, thereby driving greater student borrowing. Evidence suggests that (i) such student debt may have undesirable educational effects and potentially jeopardize household balance sheets and (ii) student loans may better support educational attainment and economic mobility if accompanied by other, non-repayable financial awards. However, given declines in need-based aid and falling state support for postsecondary costs, policymakers and parents alike have failed to produce a compelling complement to debt-dependent financial aid that is capable of improving outcomes and forestalling assumption of ever-increasing student debt for a majority of U.S. households. This article, which relies on longitudinal data from the Educational Longitudinal Study, finds parental college savings may be an important protective factor in reducing debt assumption. However, several other factors increase the likelihood students will borrow: perceiving financial aid as necessary for college attendance, expecting to borrow to finance higher education, having moderate income, and attending a for-profit college. After controlling for student and school variables, the authors find that parental college savings increase a student’s chance of accumulating lower debt (less than $2,000) compared with students lacking such savings. Policy innovations to increase parental college savings—such as children’s savings accounts—could be an important piece of the response to the student debt problem in the United States.

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    Citation

    Elliott, W., Lewis, M., Nam, I., & Grinstein-Weiss, M. (2014). Student loan debt: Can parent's college savings help? Federal Reserve Bank of St. Louis, Review, 96 (4), 331-57.

    Authors

    Elliott III, William, Lewis, Melinda, Nam, Ilsung, Grinstein-Weiss, Michal

    College Debt Journal Article Year 2014

  15. Student loans: Are we getting our money’s worth?

    Citation

    Elliott, W. (2014). Student loans: Are we getting our money’s worth? Change: The Magazine of Higher Education, 46(4), 26-33.

    Authors

    Elliott III, William

    College Debt Journal Article Year 2014

  16. The American dream and moving up

    Citation

    Elliott, W. (February, 2014). Op-Ed. The American dream and moving up. Spotlight on Poverty and Opportunity.

    Authors

    Elliott III, William

    Wealth Transfer Op-Ed Year 2014

  17. The effect of wealth inequality on higher education outcomes: A critical review.

    American society reflects considerable class immobility, much of which may be explained by the wide gaps in college completion rates between economically advantaged and disadvantaged groups of students. First, we discuss the factors that lead to unequal college completion rates and introduce assets as an explanation often ignored by stratification scholars. We then discuss how a legacy of wealth inequality has led to wealthy students having an advantage at the financial aid bargaining table over low-income and minority students. We conclude by discussing how asset-building policies such as children’s savings accounts offer a potential policy strategy to alter the distributional consequences of the current financial aid system and help level the playing field.

    Citation

    Rauscher, E. and Elliott, W. (2014). The effect of wealth inequality on higher education outcomes: A critical review. Sociology Mind, 4, 282-297.

    Authors

    Rauscher, Emily, Elliott III, William

    Wealth Transfer Journal Article Year 2014

  18. The independent effects of savings accounts in children’s names on their savings outcomes in young adulthood

    A question of interest in children’s savings research asks whether there are unique effects on children’s later savings when savings accounts are opened in their names earlier in life, either independently from and or simultaneously with accounts in which parents save on children’s behalf. Using longitudinal data from the Panel Study of Income Dynamics, this study created a combined measure of children’s (ages 12–19) and parents’ savings account ownership to predict savings outcomes in young adulthood (ages 20–25). All possible combinations of children’s and parents’ account ownership were significantly related to young adults’ savings account ownership; however, only children’s savings account ownership was significantly related to savings accumulation. Implications for the independent effects of savings accounts in children’s names are discussed.

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    Citation

    Friedline, T. (2014). The independent effects of savings accounts in children’s names on their savings outcomes in young adulthood. Journal of Financial Counseling and Planning, 25(1), 69–89.

    Authors

    Friedline, Terri

    Children's Saving Account / Financial Inclusion Journal Article Year 2014

  19. The Student Loan Problem in America: It is Not Enough to Say, "Students Will Eventually Recover"

    According to Shapiro, the American Dream “is the promise that those who work equally hard will reap roughly equal rewards” (Shapiro, 2004, p. 87); that is, the American Dream holds that this country is a meritocracy where effort and ability are the primary determinants of success. Institutions provide the economic conditions that make it possible for people to believe that their hard work and ability will determine their success or failure. This task is facilitated by Americans’ strong desire to feel as though their destiny can be controlled and that institutions will ‘echo’ their own contributions, rather than work against them.1 Primed to look for evidence of this ‘effort plus ability equals outcomes’ equation, Americans cling to this ideal, even as it recedes in reality for many. There is no evidence that Americans today are less capable or less committed than in previous generations, in the aggregate. Instead, particularly in today’s highly specialized, technology driven, global world, the upward mobility that animates the American Dream is only possible if effort and ability are combined with institutional might.

    Related items: Briefs

    Student Loan Debt Threatens Household Balance Sheets Status Quo: Divergent Financial Aid Systems Yield Disparate Outcomes High-Dollar Student Debt May Compromise Educational Outcomes Before College: Building Expectations and Facilitating Achievement Executive Summary

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Infographics

    Today: Two Paths To Higher Ed Student Loan Debt: Consequences Tomorrow . . . And For Years to Come Reports

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity Unequal Outcomes: Student Loan Effects on Young Adults’ Net Worth Accumulation

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    Citation

    Elliott, W. and Lewis, M. (2014). The student loan problem in America: It is not enough to say, “students will eventually recover.” Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William, Lewis, Melinda

    College Debt Report Year 2014

  20. Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation

    Citation

    Friedline, T., Johnson, P., & Hughes, R. (2014). Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation? Federal Reserve Bank of St. Louis Review, 96(4), 359-389.

    Authors

    Friedline, Terri, Johnson, Paul, Hughes, Robert

    Children's Savings Account Journal Article Year 2014

  21. Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation

    Understanding the balance sheets of today’s young adults—particularly the factors that set them on a path to financial security through asset diversification and accumulation—lends some insight into the balance sheets they will have when they are older. This study uses panel data from the Census Bureau’s 1996 Survey of Income and Program Participation to investigate the acquisition of a savings account as a gateway to asset diversification and accumulation for young adults. Two avenues were considered: The first emphasized ownership of a diverse portfolio of financial products, and the second emphasized the accumulated value of liquid assets. Almost half of the surveyed young adults owned a savings account (43 percent) and approximately 3 percent acquired a savings account over the course of the panel. (Older, nonwhite, or unemployed participants were significantly less likely to acquire an account.) Those who owned or acquired a savings account also had more diverse asset portfolios. Evidence suggests that young adults who acquire a savings account and diversify their asset portfolios may also accumulate more liquid assets over time, which can be leveraged in the future to strengthen their balance sheets.

    Citation

    Friedline, T., Johnson, P., & Hughes, R. (2014). Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation? Federal Reserve Bank of St. Louis Review, 96(4), 359-389.

    Authors

    Friedline, Terri, Johnson, Paul, Hughes, Robert

    Financial Inclusion Journal Article Year 2014

  22. Unequal Outcomes: Student Loan Effects on Young Adults' Net Worth Accumulation

    Most people do not dream of going to college and becoming rich; that is, higher education is, for most, a path to the American Dream of middle-class financial security and upward mobility, not a perceived ticket to great riches. Generally, when people dream of being rich, they think of being a professional athlete, an actor, a singer, or entrepreneur, or winning the lottery. People may dream of getting rich, but it is not this illusion of quick fortune that animates individual actions nor characterizes the American ideal. Instead, Americans expect and work toward the opportunity to become middle-class through education, and it is this promise that underscores our vision of ourselves and our presumed ‘contract’ with the institutions that govern U.S. society. In recognition of the role that educational attainment plays in opening the door to this archetypal middle-class ideal, U.S. policy decided some time ago that children’s work would be school work. Children and their parents believe that the reward for innate intellectual ability and expended academic effort will be a chance to reach, not ease and opulence, but security and upward progress. U.S. policy affirms that education is the primary path for achieving the American Dream. Therefore, quick climbs from rags to riches are presumed to be quixotic, fleeting, and not necessarily even desirable. In contrast, the denial of a fair shot to enter and stay in the middle class through education imperils the foundation on which our collective identity rests and threatens to rewrite the American narrative of ‘success’ through effort and ability, mediated through attainment of education.

    Related items: Briefs

    Student Loan Debt Threatens Household Balance Sheets Status Quo: Divergent Financial Aid Systems Yield Disparate Outcomes High-Dollar Student Debt May Compromise Educational Outcomes Before College: Building Expectations and Facilitating Achievement Executive Summary

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Infographics

    Today: Two Paths To Higher Ed Student Loan Debt: Consequences Tomorrow . . . And For Years to Come Reports

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover”

    Read Publication

    Citation

    Elliott, W., Lewis, M., Johnson, P. (2014). Unequal outcomes: Student loan effects on young adults’ net worth accumulation. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William, Lewis, Melinda

    College Debt Report Year 2014

  23. Young people are the front lines of financial inclusion: A review of 45 years of research

    Amidst concerns about percentages of households that remain unbanked or underbanked, policy endeavors have emerged to promote financial inclusion by making financial products such as savings accounts readily available. While these endeavors have primarily concentrated on households, young people may be the front lines of financial inclusion because they may be more likely to be banked in young adulthood and beyond when they start off with savings accounts earlier in life. This article addresses young people's financial inclusion by comprehensively reviewing 60 research studies on young people's savings, discussing the role of the family in young people's financial inclusion, discussing financial inclusion from an institutional perspective, presenting policy implications, and identifying gaps in knowledge and opportunities for research. Policies that open savings accounts for young people early in life may be a promising strategy for extending financial inclusion and preventing unbanked or underbanked status later in life.

    Citation

    Friedline, T., & Rauktis, M. (2014). Young people are the front lines of financial inclusion: A review of 45 years of research. Journal of Consumer Affairs, 48(3), 535-602.

    Authors

    Friedline, Terri, Rauktis, Mary

    Financial Inclusion Journal Article Year 2014