Saturday, November 8, 2014: 10:15 AM-11:45 AM
Jemez (Convention Center)
*Names in bold indicate Presenter
Panel Organizers: Trina Shanks, University of Michigan
Panel Chairs: Trina Shanks, University of Michigan
Discussants: Shira Markoff, Corporation for Enterprise Development
There are many emerging ideas for reducing documented disparities in wealth by race and gender. Such ‘asset-building’ policies include institutional arrangements that help low-to-moderate income households build wealth. Some support increasing assets and reducing economic inequality by beginning child development accounts (CDAs) very early in life. One approach is for every child to be given an account, ideally with an initial deposit and progressive incentives that favor the poor. With savings dedicated to their own development, young people might have better options as they approach adulthood.
Theoretical rationales help specify why such CDAs might be beneficial. These explanations include the idea that assets lead people to think differently about themselves and their futures (Sherraden 1991) and that household assets provide pathways that make life easier for children by allowing more resources and alleviating stress (Williams Shanks & Robinson, 2013; Grinstein-Weiss, Williams Shanks, & Beverly, 2014). This symposium goes beyond theoretical statements to empirical evidence from settings that have begun to implement child development accounts.
Paper 1 provides an overview of how family assets and child savings may influence identity-based motivation (IBM) by creating a ‘college bound identity’, which in turn makes it easier for a child to make decisions that lead to better school outcomes. The authors are working with a school district in Michigan to create simple classroom activities based on IBM that can complement child savings accounts and make preparing academically for college seem relevant in the present, even among young children.
Paper 2 uses data from the SEED OK experiment in Oklahoma—which is testing universal and automatic accounts at birth—to study material hardship among participants and specify theory based on how families interact with child accounts. This study provides data indicating that CDAs, although not providing consumption support, seem to mitigate the impacts of material hardship on child socio-emotional development. In other words, these accounts offered at birth are leading to differential results between treatments and controls in child development four years later.
Paper 3 summarizes how the SEED OK experiment has provided evidence that informs CDA development in other states, particularly Maine. Maine initiated a 529 college savings plan offering a $500 initial deposit to all newborns, but families had to sign up (“opt in”). Data showed that less than 40% actually enrolled, with the greatest participation among high-income families. Based primarily on SEED-OK findings, a new policy has been initiated in Maine that will provide CDAs automatically to all babies born in the state. This is the first statewide universal and automatic account at birth in the United States.
Paper 4 is based on the Kindergarten to College (K2C) program. As part of this program, every Kindergartener enrolled in a San Francisco public school automatically receives a $50 initial deposit and support toward saving for college. After running K2C for several years, San Francisco can discuss the challenges of implementing and running a school-based CDA program and explain how successful the city has been in reaching Kindergarteners in the public school system.