Posted: April, 2013

Children as Potential Future Investors is a three-part series of reports that focuses on connecting children to the financial mainstream by giving them savings accounts. Children are potential future investors and when they have savings accounts of their own, they may be more likely to maintain relationships with mainstream banks and to invest money into their accounts in young adulthood. This series of reports examines (1) connections with banking institutions and diverse asset portfolios in young adulthood, (2) accumulating assets, debts in young adulthood, and (3) children’s savings accounts offered by mainstream banking institutions. The first report examines whether having a savings account at a mainstream bank in childhood predicts owning a savings account and other types of assets in young adulthood. The second report examines whether having a savings account at a mainstream bank in childhood predicts the savings, assets, debts, and net worth accumulated in young adulthood. The third report descriptively examines existing savings accounts for children at the top 25 mainstream banking institutions in the United States and asks whether those accounts augment children's capacity to save. While children may have limited savings to invest initially, they may increasingly invest more money into different types of savings products over time. Mainstream banks stand to profit from this long-term relationship, which may begin to justify a business case for children’s savings and why mainstream banks should continue offering savings accounts to children. Policy endeavors that remove barriers to account ownership may be advantageous for children and mainstream banks.

     Posted: January, 2013

"Assets, Economic Instability, and Children’s Human Capital: Building a Better Welfare System for the Poor" is a four-part series of reports that focuses on the relationship between economic instability (i.e., income shocks, asset shocks, home loss, and asset poverty) and children’s human capital development. This series examines: (1) the probability of living through a period of economic instability, (2) factors that predict economic instability, (3) the effects of economic instability on children’s educational outcomes, and (4) asset policies for the poor, a 21st century vision of welfare. Evidence is presented from a set of empirical studies conducted by scholars and affiliates at the Assets and Education Initiative (AEDI) on economic instability relevant to large-scale welfare and education policy proposals,with an emphasis on low-income and minority children. Collectively, these reports build on the compelling observation that the pattern low-income families walk into is a present time oriented or consumption based pattern of behavior; in contrast, the pattern higher income families walk into is future oriented or asset based. Overall, findings from this series of reports can be interpreted as suggesting that a bifurcated welfare system, with income-based programs for poor families and asset-based programs for higher income families, provides higher income children with an educational advantage over low-income children that might ultimately help exacerbate educational inequalities in America. In order to create a level playing field welfare policies are needed that enable low-income families to accumulate assets.  

Posted: Summer, 2012

Creating a Financial Stake in College” is a four-part series of reports that focuses on the relationship between children’s savings and improving college success. This series examines: (1) why policymakers should care about savings, (2) the relationship between inequality and bank account ownership, (3) the connections between savings and college attendance, and (4) recommendations to refine children’s savings account proposals. This series of reports presents evidence from a set of empirical studies conducted by Elliott and colleagues on children’s savings research, with an emphasis on low-income children, relevant to large-scale policy proposals. One such proposal, The ASPIRE Act, would encourage savings by opening an account for every newborn child, seeding the account with an initial deposit and progressively matching contributions, and designating accumulated resources to support post-secondary education or other targeted uses such as homeownership or retirement.  Collectively, these reports build on the compelling observation that children with savings in their name are given a stake in their future. As such, they are more inclined to take control over their educational experience and feel more empowered to attend college and persist through graduation.

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