Association for Public Policy Analysis & Management

Background: Over the past two decades, a growing number of local and national governments in different countries have launched Child Development Accounts (CDAs) as an asset-building policy tool to help young citizens accumulate wealth for long-term development. The policy has the potential to achieve financial inclusion, reduce wealth inequality, and improve child well-being. While sharing many program features, development of CDAs in different countries has its unique circumstance. This paper highlights CDA programs in three Asian countries/areas (i.e., Singapore, Korea, and Hong Kong), and discusses policy lessons learnt from these CDA examples.

Method and Results: Using a case study approach, the study collects and reviews the public-available information on CDA programs in Singapore, Korea, and Hong Kong. The review shows that Singapore has by far the most comprehensive asset-based social policy covering the entire life cycle of its citizens. Children aged 0-20 are the beneficiaries of four national asset-based policies—Baby Bonus Cash Gift, Baby Bonus CDA, Edusave, and Post-Secondary Education Accounts. These programs achieve universal enrollment through automatic account opening. For example, all Singaporean school-aged children aged 6-16 have been included in the government-funded Edusave Scheme since 1993. These CDAs also provide substantive public subsidies through automatic deposits or savings match to support childcare, early childhood education, special education, and post-secondary education. Using Baby Bonus Cash Gift as an example, first and second children each receive S$8,000 (US$5,770), and subsequent children receive S$10,000 (US$7,125). Launched nationwide in April 2007, CDAs are named Didim Seed Savings Accounts in Korea, serving as a mechanism for the government to deliver financial education to all children under 18 in the child welfare system, and for these children to accumulate assets for life goals. Children receive matching funds at a 1:1 ratio from the government for the savings deposited in the account, and can withdraw the funds for education, housing, microenterprise start-up, medical costs or wedding expenses. In 2008, the Hong Kong government launched the Child Development Fund (CDF) for low-income children aged 10-16. The monthly savings target for each participating child is HK$200 (US$26). Corporate and/or private donors contribute to the matching fund, with a minimum matching rate set at 1:1. Children who complete the two-year savings period will be rewarded with HK$3,000 (US$387) in the third year.

Conclusion: The implementation process of these examples suggests that government leadership’s commitment is the foundation for the development of CDA policies in Asian countries/areas. All top government leaders in the above examples have been genuinely interested in rolling out these programs to benefit their citizens. These programs have motivated other Asian countries to design their own CDA programs. In addition, partnerships matter in policy implementation: The government needs partners in implementing policies. Different financial institutions and nonprofit partners are critical frontline players in bringing the governments’ effort to the beneficiaries.