REDEEMING
THE
AMERICAN
DREAM
Children’s Savings Accounts (CSAs)
Build Children’s Capacity For
Economic Mobility
William Elliott III
www.cfed.org
A
s believers in a meritocratic system, when Americans dream, they do
not dream of someone giving them a hand up the economic ladder;
instead, Americans dream about how they will ascend with their
own effort and ability. This belief in a meritocracy has been ingrained
in the psyche of the American people. We learn it from such places as our families,
our teachers, and even popular culture. We repeat it to ourselves because we want
to believe that the system works as it should and that individuals have considerable
control over their own fortunes. We learn of the American Dream prior to even having
the knowledge to doubt its validity and it becomes part of how we see the world and
the people in it. A part of the American meritocracy is the perception that in order
to receive publically funded benefits (such as food stamps or money to help pay for
college) without reprisal the use of these goods must be purchased with the investment
of effort and ability. There is an implicit judgment, then, that seeks to ensure that people
do not get comfortable with receiving a ‘handout’. Because measuring effort and ability
directly is difficult, one’s wages become a measure of the amount of personal resources
one invests in his/her work; that is, people are perceived as being paid equivalent to
their worth. Worth in the market is associated with one’s contribution or productivity
on the job, in common parlance if not in economic actuality.
PAGE 2
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
For many years, when unions were
strong, globalization was only a thought,
and technology enhanced people’s
productivity on the job, not replaced it,
wages closely mirrored productivity in
most cases, reinforcing this widely-held
belief in the minds of many Americans.1
Indeed, from 1948 to 1973 wages and
productivity grew in concert (Mishel,
2012). However, during the last three
decades, there has been a decoupling
of these elements among wage earners
(i.e., the vast majority of Americans for
whom wages make up the bulk of their
personal income). This decoupling over
time, of wages and productivity, has led
to a crisis of confidence only deepened
by the Great Recession. As their fortunes
fell, more households began to question
whether the American Dream of doing
better than the last generation is truly
within their grasp. As their increased
work effort failed to result in higher
earnings, and as their real purchasing
power eroded in the face of high health
care and higher education costs, more
Americans wonder whether this old
Dream has become obsolete and ought to
be exchanged for a more modest Dream
of mere financial security. Instead of
aspiring to upward mobility, increasingly Americans seem to be contenting
themselves with simply not slipping
backwards. A recent poll conducted
by the Washington Post-Miller Center
(2013) finds that 53% of Americans in
the middle class perceive that they will
either remain there or slip backwards in
the next few years. The experiences of
Americans whose main source of personal income is their wages contradict every
day the assumption about the value of
work and belie their own hopes that they
can somehow work their way to prosperity. Fifty-eight percent of Americans say
they earn less than they deserve and six
in 10 workers worry they will lose their
jobs because of the economy (Washington Post-Miller Center, 2013). While
these economic insecurities may have
escalated during the recent recession,
the erosion of wage earners’ ability to
leverage employment for real economic
mobility may be understood as a longterm trend demanding significant policy
change, not a temporary downturn that
will naturally self-correct (Harrison &
Bluestone, 1988; Piketty, 2014).
Research suggests that for at least the
last 40 years income from labor has not
been an adequate tool for facilitating
economic mobility. The question then
becomes, what is? The answer is not all
that elusive; it lies in the components of
personal income. Personal income not
only consists of income from labor but
also income from capital and transfers.
If personal income is a three legged stool
and one of the legs, labor income, is
diminishing in its strength to hold wages
up with one’s investment of personal
resources, then it may be concluded
that policies are needed that strengthen
the role of the other two components.
Income from assets and transfers already
helps to facilitate economic mobility
among the wealthy. Among the top 1%
of households, only 39% of personal
income is derived from labor income
(Rosenberg, 2013), while 53% is capital
income (e.g., business profits, dividends,
net capital gains, taxable interest, and
tax-exempt interest). Having most of
their personal income come from capital
income also means these households
receive a discount on their taxes, because
long-term capital gains tax rates top out
at about 23.8% while standard income
taxes go all the way up to 39.5% (IRS,
2013). As will discuss later, the tax code
provides then, primarily for the wealthy,
a type of non-stigmatized transfer.
In this paper it is suggested that Children’s Savings Accounts (CSAs) are an
investment that may embody the meritocratic values that Americans have for so
long professed, values that demand that
effort and ability decide why one person
succeeds and another fails. More specifically, it is suggested here that CSAs
are a type of institution that addresses
the problem of building people’s capacity to use personal resources to achieve
economic mobility. In order to better
understand how CSAs can be part of a
solution for assisting people to move up
A
mong the top
1% of households, only
39% of personal income is
derived from labor income
(Rosenberg, 2013), while
53% is capital income (e.g.,
business profits, dividends,
net capital gains, taxable
interest, and tax-exempt
interest). Having most of
their personal income come
from capital income also
means these households
receive a discount on their
taxes, because long-term
capital gains tax rates top
out at about 23.8% while
standard income taxes go
all the way up to 39.5%
(IRS, 2013).
1 Productivity is the amount of goods and
services workers produce per hour worked.
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 3
The aim is to provide a conceptual framework for why work is an insufficient solution for
creating economic mobility and how education, assets, and transfers help build people’s
capacity to advance.
the economic ladder, I start off by drawing a distinction between standard of living and wellbeing. The aim is to provide
a conceptual framework for why work
is an insufficient solution for creating
economic mobility and how education,
assets, and transfers help build people’s
capacity to advance. Next, I articulate
how CSAs align with American values.
In so doing, I suggest that Americans
actually support transfers but only if it is
perceived that people are required to use
their effort and ability to secure them.
Next, it is suggested that CSAs, which
have primarily been conceptualized in
more recent years as an instrument for
increasing access to post-secondary education are, in the end, a tool for increasing economic mobility. The paper ends
by presenting evidence of CSA effects
during different transitions (i.e., before,
during, and after post-secondary school)
over the course of a child’s life.
CSAs ALIGN WITH AMERICANS’ BELIEF
IN A MERITOCRACY
From the perspective presented in this
paper, each step on the economic ladder represents a different standard of
living (i.e., the level of material goods
and services associated with living in a
specific socioeconomic class such as the
underclass, working poor, or middle
class). The amount of income a person
has indicates on which rung on the
ladder a person sits because income is
used for consumption. When people
think of income, they typically have in
mind income from labor. When we see
individuals move from one rung of the
ladder to a higher rung we see a change
in their personal income and their level
of consumption along with it. However,
this observed change in income does not
explain how economic mobility occurs,
only that it has occurred. From this perspective, income alone is insufficient to
explain the process of economic mobility
(i.e., improving one’s overall position in
society, as compared to peers – relative
intragenerational mobility) particularly
in today’s context of declining wage
power of most poor families or, even, a
growing number of the shrinking middle
class (e.g., Piketty, 2014).
With regard to the typical American, it
is posited here that in order for economic
PAGE 4
mobility to occur he/she needs to: (a)
obtain the skills required to move into a
higher class on the ladder and get a job
that pays at that skill level, which most
often requires an accumulation of savings to pay for post-secondary education
and/or willingness to assume significant
debt; (b) find ways to use some of his/
her wages to accumulate assets; and/or
(c) receive transfers that place him/her
at a higher level on the economic ladder.
Whereas standard of living is the amount
of goods and services one can consume,
wellbeing is a state where one has the
capacity to achieve economic mobility.
That is, wellbeing has more to do with
the kinds of goods and services available to people and what people can do
with those goods and services, the real
opportunity they have to move up the
economic ladder, than how many goods
and services they can consume (see Sen,
1999; Sherraden, 1991). Standard of living is an important part of wellbeing but
insufficient for creating the conditions
necessary for people to have the real
opportunity to advance economically.
This means, of course, that policies that
center on transferring improvements in
standard of living, through increased
consumption power, will never be
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
adequate for constructing a foundation
for economic progress and, therefore,
poor substitutes for the growth-focused
investments delivered to more privileged
Americans.
creation, an essential mechanism for
creating economic mobility.
It is not Just About the Jobs
Americans perceive that what a person
earns at her job is closely linked to his/
her use of effort and ability. This creates
the conditions for income generated by
assets to potentially distort perceptions
about the amount of personal resources
people invest. This is meaningful because people of color and lower income
families are less likely to have income
generating assets; thus, their use of effort and ability in earning wages may
be unjustly devalued. For the American
Dream to be viable in today’s economy,
movement up and down the ladder must
be determined by people’s use of effort
and ability; and for a long time, this has
meant effort and ability exerted at work.
A vivid example of how personal resources fail to align with one’s wages can
be seen in research on the relationship
between student loan debt and wealth
accumulation. Hiltonsmith (2013) finds
that although households with college
graduates and student debt the same or
have higher earnings immediately after
leaving college than households without
student debt, by the time the graduates
reach their 40s their income falls behind
that of households with college graduates and no student debt. Hiltonsmith
(2013) suggests that this disparity may
occur because indebted students are not
able to build assets soon after graduating from college at the same levels as
students with no student debt. Then,
because assets can be converted back
into income (e.g., rent from real estate,
dividends from stocks, or interest from
bonds) in the future, as they age these
indebted students have less income
available. So the point here is that graduates with student debt do not work less
hard in college, or after college, and yet
they are still lagging behind graduates
without student debt because of their
inability to accumulate assets.
I posit that wages are set by the market
for a particular class of workers. Individuals cannot move themselves up the ladder through their labor income alone, in
part because market demand constrains
the prices paid for given goods and
services and, in turn, the wages one can
earn for delivering that product. Given
this, social class researchers like Gilbert
(2008) can state, then, that the workingpoor—relegated mostly to specific
industries—have incomes below $20,000
and the middle class earn about $40,000,
with a fair amount of certainty. There
may still be differences in the standard
of living within a particular class; that is
some working-poor, for example, have a
lower standard of living than others, and
wages can contribute to making these
types of measured changes in standard
of living among individuals and families
within a particular social class.
So, when people on welfare, for example, are forced to take a job classified
as working-poor, there is little reason to
believe they will move securely out of
poverty by working unless their wellbeing is also considered (i.e., their capability for moving up the economic ladder).
Similarly, depending on transfer income
from means-tested and social insurance
programs (including Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, and
Supplemental Security Income, but also
initiatives like the Earned Income Tax
Credit) can move households out of the
underclass, in some circumstances, but
these programs are not designed to build
families’ capacity for economic mobility,
only to move them to near poverty. That
is, while necessary, they do not facilitate
the kinds of economic behaviors that
correlate to mobility. These limitations
may make asset accumulation, with its
associated potential for capital income
The Wages a Person Earns
should not be Confused with
their Effort and Ability
H
iltonsmith
(2013) finds that
although house-
holds with college graduates and student debt have
higher earnings immediately
after leaving college, by the
time the graduates reach
their 40s their income falls
behind that of households
with college graduates and
no student debt. Hiltonsmith (2013) suggests that
this disparity may occur
because indebted students
are not able to build assets
soon after graduating from
college at the same levels
as students with no student
debt.
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 5
For both low wealth and high wealth households, assets boost their capacity for generating
income beyond what they could generate through labor alone or even education. Moreover,
it may suggest that having more assets to begin with (i.e., initial asset levels) matters when
considering the return received from owning assets.
T
he asset-based
arm is largely designed for middle-
and upper-income families,
in that it primarily rewards
behaviors disproportionately evidenced by these upper
classes and relies on incentives—particularly through
the tax code—disproportionately beneficial to them.
PAGE 6
Instead of thinking that people need a
certain level of income before they can
save, it may be that having a certain level
of savings positions them for greater
earning. Evidence on the importance of
initial asset levels hints to this. Research
conducted by the Assets and Education
Initiative suggests that at the onset of
the Great Recession, in 2007, for each
dollar increase in initial capital income
derived from assets (such as income
from interest, dividends, and trust), total
household income increases by $1.22 for
households at the 25th percentile of capital income, but by $5.26 for those at the
75th percentile. At the end of the Great
Recession in 2011, we find similar disparate increases in total income of $0.58
and $1.29, respectively (Elliott & Lewis,
2014). This points to the fact that for both
low wealth and high wealth households,
assets boost their capacity for generating
income beyond what they could generate
through labor alone or even education.
Moreover, it may suggest that having
more assets to begin with (i.e., initial asset levels) matters when considering the
return received from owning assets.
American meritocratic values demand,
then, that the poor receive transfers in
the form of assets (e.g., initial deposits,
matches, and incentives) and access to
structures that facilitate ongoing asset
development so that effort and ability are
isolated as the determining factors for
how much capacity they have for moving up the economic ladder in adulthood
and not unequal access to institutions.
Policy should also ensure that those in
poverty are not further disadvantaged
in their pursuit of asset accumulation
by the strict asset limits that accompany
their use of means-tested consumption
supports. If creatively envisioned, designed explicitly for equity and mobility,
and situated within a redesigned public
assistance system, Children’s Savings
Accounts provide the plumbing (i.e.,
infrastructure) for these transfers to be
passed to children over their life course
and, then, leveraged for a true chance at
mobility.
Transfers as Currently
Conceptualized are also
Insufficient for the Poor
The American welfare system is a
bifurcated system with a consumptionbased arm and an asset-based arm. On
the one hand, the asset-based arm is
largely designed for middle- and upperincome families, in that it primarily rewards behaviors disproportionately evidenced by these upper classes and relies
on incentives—particularly through the
tax code—disproportionately beneficial
to them. Practically, then the goal of the
asset-based arm becomes to create the
capacity for economic mobility through
asset accumulation, however, inequitably
favoring upper income households. The
asset-based welfare system’s use of the
tax code confirms the goal of asset development and provides considerable subsidies to do so through programs such as
the home mortgage interest deduction,
preferential treatment of capital gains,
and exclusion of employer-provided
retirement benefits from taxable liability
(Cramer, Black, & King, 2012). However,
the distribution of benefits heavily favors
households who already have wealth
(Cramer et al., 2012).
On the other hand the consumptionbased arm is largely designed for lowincome families and helps maintain basic
standards of living. The important function that the consumption-based arm fills
is to lift the poor out of abject poverty
into near poverty. Accordingly, survival needs must first be fulfilled before
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
The asset-based welfare system’s use of the tax code confirms the goal of asset development
and provides considerable subsidies to do so through programs such as the home mortgage
interest deduction, preferential treatment of capital gains, and exclusion of employerprovided retirement benefits from taxable liability (Cramer, Black, & King, 2012). However, the
distribution heavily favors households who already have wealth (Cramer et al., 2012).
people can begin to take concrete actions
related to building their capacity to move
up the economic ladder. Given this, there
is a real role for the safety net to play
and CSAs are likely to work best when a
robust safety net is in place and the two
work in harmony with each other.
Still, many of the programs within
the consumption-based arm are seen
as entitlements, which in America, is
tantamount with receiving a handout.
As such, they are highly stigmatized and
mostly designed to phase out as soon as
someone begins to be less abjectly disadvantaged. Unlike the asset-based arm,
the consumption-based transfers that
comprise the system typically thought of
as ‘welfare’ not only fail to facilitate asset
accumulation, but can explicitly work
against it and sometimes strip the poor
of the assets they have. While asset-based
transfers such as the mortgage interest
deduction, tax incentives for retirement,
and college savings subsidies actively encourage saving and asset building, many
low-income households can face steep financial disincentives—penalties, even, in
the form of asset limits embedded within
the eligibility determination process —
for managing to convert some of their income flows into reserved capital. In this
way, poor Americans may be forced to
choose between asset accumulation and
satisfaction of basic needs, even while
asset-based welfare policy facilitates the
simultaneous current security and future
mobility of more privileged Americans.
This is important, because initial levels of
assets may help determine future asset
accumulation (i.e., initial assets beget
future assets) and even future income
(i.e., initial assets beget future income).
The latter is based on the recognition
that personal income consists of labor,
capital, and transfer income.
Effort and Ability Mixed with
Transfers, Makes Sense to
Americans
Generally, Americans dislike transfer programs because they are viewed
as being contrary to their meritocratic
beliefs. However, the distinction between
transfer programs that enhance instead
of replace effort and ability are more
favorably viewed. For instance, Aid
to Families with Dependent Children
(AFDC), a consumption-based program,
was renamed Temporary Assistance
for Needy Families (TANF) in 1996 to
reflect the change to mandatory work
and the short-term basis on which poor
families could expect to receive any aid.
TANF was largely applauded by most
Americans as a symbolic alignment of
American values with policy expectations. Unfortunately, as discussed, work
itself, whether compelled or not, is not
adequate to facilitate mobility.
So, the poor need an institutional
framework that provides them with the
plumbing to receive transfers (i.e., public
resources) that leverage their effort and
ability in support of mobility enhancing pursuits, such as building assets,
rather than those solely dependent on
income from work and perceived to be
a handout. CSAs present a more efficient and equitable mechanism for
advancing the constellation of currently
administered transfers through the tax
code or financial aid system. Essentially,
U.S. policy is already directed at using
public resources to subsidize retirement,
homeownership, postsecondary education, and entrepreneurship as behaviors
that channel effort and ability. But these
considerable investments are poorly tar-
U
nlike the assetbased arm, the
consumption-
based transfers that comprise the system typically
thought of as ‘welfare’ not
only fail to facilitate asset
accumulation, but can explicitly work against it and
sometimes strip the poor
of the assets they have.
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 7
U
nlike basic savings accounts,
CSAs leverage
investments by individuals,
families, and, sometimes,
third parties. Ideally these
investments are catalyzed
with an initial deposit and/
or matching funds adding public or philanthropic
funds to families’ savings,
usually on a ratio ranging
from 1:1-5:1, in order to
extend meaningful incentives for saving and parallel
the support for building
balances already available to
higher-income households
through tax benefits.
PAGE 8
geted, aimed at either the wrong people
or the wrong understanding of the problem and the best approaches. Mixing
effort and ability with transfers is a very
American way of thinking about how
government can best augment people’s
use of effort and ability. Further, the mixing of personal resources with transfers
might have advantages over other education reform innovations, including the
recently-popular proposals to artificially
reduce the costs of higher education.
This is because when children are asked
to invest personal resources into paying
for school, research suggests that it motivates them to give their fullest in their
post-secondary school work (Hamilton,
2013). According to Hamilton (2013),
children may direct more effort to school
when they personally feel the economic
costs of poor performance” (p. 74).
So, for example, a way to potentially
increase the effectiveness of a program
like Pell, might be to take the billions of
dollars now allocated to it and give a percentage of this money each year to students in as early as 5th grade, allowing
the student and their families to leverage
this money to accumulate even more as-
sets for college or other investments later
in life. In this way, in addition to being
a vehicle for household savings, CSAs
can be seen as a type of infrastructure, in
particular but not exclusively for low-income children because the tax code does
not work to deliver savings incentives
for them, where they can receive asset
transfers in a way that is consistent with
American values. Finding ways to transfer significant sums of money into CSAs
that are compatible with the American
value system will be essential for building the capacity of lower income Americans so that effort and ability can truly
be the deciding factor in who succeeds
and who fails. This idea is not foreign to
Americans. When is the last time we as a
country had a wealth building program
as grand as the Homestead Act or the GI
Bill? The convergence of forces—including rising student loan debt and erosion
of affordability, stagnating wages and
constrained economic mobility, and the
shifting of risks onto the backs of individuals unprepared without adequate
asset holdings—suggests that the time
has come.
CSAs BUILD CHILDREN’S CAPACITY FOR
ECONOMIC MOBILITY
Children’s Savings Accounts (CSAs)
are savings vehicles, most commonly designed for higher education savings, that
often incorporate specific incentives and
explicit structures to encourage savings
by disadvantaged youth and families
who otherwise may not have equitable
access to financial institutions. While
they have specifically designed features
for encouraging saving among disadvantaged youth and families, they are meant
to universally serve all young people.
Unlike basic savings accounts, CSAs
leverage investments by individuals,
families, and, sometimes, third parties.
Ideally these investments are catalyzed
with an initial deposit and/or matching
funds adding public or philanthropic
funds to families’ savings, usually on
a ratio ranging from 1:1-5:1, in order to
extend meaningful incentives for saving
and parallel the support for building balances already available to higher-income
households through tax benefits.
Growing Interest in CSAs
CSAs are gaining traction around the
country, not as a fad or a merely interesting alternative but as a potentially powerful tool with which to improve educational attainment and make existing
institutions—K-12 schools, universities,
the financial aid system—work better,
especially for disadvantaged students. In
the absence of passage of national CSA
policy, some states and localities have
developed their own children’s savings initiatives, including programs that
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
incorporate elements of CSA design into
state 529 college saving plans. While the
details vary, these CSA-style investments
in children’s futures include publicly
funded initial contributions and matching contributions for low-income savers,
opening accounts for children who reach
specific educational milestones (such as
kindergarten enrollment), and experimenting with school-based savings and
financial literacy initiatives (Goldberg,
Friedman, and Boshara, 2010). North Dakota, for example, provides a $100 grant
for any newborn in the state, provided
that the $100 is matched by a private
contribution before the child’s fourth
birthday.2 Enacted in 2010, Nevada’s
Silver State Matching Program provides
a 1:1 match on contributions for households earning annual incomes below
$41,400 and a 50% match up to $300 per
year for households earning annual incomes between $41,400 and $61,950. The
Alfond Challenge automatically opens
a 529 account with an initial deposit of
$500 for any parent of an infant in Maine.
A number of other states are in the planning stage for beginning a CSA in the
next year or two. In other parts of the
country, school districts, counties, and
municipalities are also stepping into the
breach. San Francisco, California, became
the first locality in the United States to
provide “opt out” college savings accounts to all enrolled kindergarteners, in
2010.3 Cuyahoga County, Ohio, began a
similar effort in fall 2013, specifically citing as a rationale for their investment the
potential for improved educational outcomes by helping families and students
finance college through savings.4 Collectively, these innovations are helping
thousands of low-income students, while
testing different policy mechanisms and
strengthening the case for broader CSA
implementation.
Growing interest in CSAs in the early
2000s led to the first national test of CSAs
through the Saving for Education, Entrepreneurship, and Downpayment (SEED)
initiative. Beginning in 2003, SEED was
a 4-year demonstration project, in which
over 1,300 low-income children and
youth in 12 locations across the country
received matched savings accounts and
financial education. The SEED for Oklahoma Kids (SEED OK) research experiment tests the effects of CSAs opened at
birth in a full population.5 By combining
random selection from a full population of births, random assignment, and
longitudinal data collection, SEED OK is
well-positioned to answer key questions
about effectiveness of universal and progressive CSAs for a general population
(Nam, Kim, Clancy, Zager, & Sherraden,
2013).
Improving Children’s PostSecondary Performance, a
unique outcome of CSAs?
While CSAs are meant to promote
asset accumulation for homeownership,
retirement, and capitalizing a business
venture, there are important reasons for
making higher education an important
aspect of the problem CSAs are meant
to solve. First, much of the recent interest in CSAs stems from their potential
as a strategy for improving children’s
educational outcomes. This rationale
appears to align with what people think
children should save for, and it taps into
a growing national conversation and, indeed, concern, about the extent to which
higher education is still a ‘good investment’ for American children and how
growing reliance on student debt might
compromise educational and financial
well-being. In a survey of 801 registered
voters, 40% believe that making education more affordable should be the top
priority of government. No other priority
garnered favor from a larger proportion of study participants (Goldberg,
Friedman, & Boshara, 2010). More to the
point, 58% of registered voters in the
study thought that the most effective use
for CSAs would be to help families save
for college.
Non-financial value of higher education notwithstanding, most people
attend post-secondary institutions for
the purpose of improving their financial
wellbeing. In this vein, attaining postsecondary credentials is still very effec-
I
n a survey of 801
registered voters, 40%
believe that making
education more affordable
should be the top priority
of government. No other
priority garnered favor
from a larger proportion of
study participants (Goldberg, Friedman, & Boshara,
2010).
2 The Child First Program, Section 529, enacted in
2011.
3 For more information on the Kindergarten to
College initiative, see http://www.k2csf.org/.
4 See, for example, statements by the Cuyahoga
County Executive, http://executive.cuyahogacounty.us/en- US/113012-college-savingsaccount.aspx.
5 For more information and initial findings go to
http://csd.wustl.edu/AssetBuilding/SEEDOK/
Pages/SEEDOK.aspx
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 9
tive at increasing the capacity of children to move up the economic ladder.
For instance, Urahn, Currier, Elliott,
Wechsler, Wilson, and Colbert (2012)
found that 47% of children born in the
bottom family income quintile remain
in the bottom quintile as adults if they
do not earn a college degree. In contrast, only 10% of those children born
in the bottom family income quintile
with a college degree remain there as
adults. Children who are born into the
bottom family income quintile and
attain a college degree are as adults
three times more likely to make it to
the top family income quintile, and
four times more likely to move from
the bottom family wealth quintile to
the top, compared to those poor children who do not earn college degrees.
Household saving for post-secondary education during a student’s
younger years has demonstrated
effects on children’s preparation
for college, enrollment in college,
and graduation from college. These
relationships between asset holdings and later educational attainment
raise the stakes even higher, then, as
those whose limited asset holdings
constrain their economic mobility
also struggle to access the educational
achievement that could vault them to
a higher plane of economic wellbeing.
Accordingly, CSAs work to foster
economic mobility both directly, as
asset levels may affect the extent to
which additional income and assets generate wealth, and indirectly,
by facilitating greater educational
attainment. From this it should be
clear how education and mobility are
related. Policymakers and advocates
need not choose whether to design
CSAs to facilitate educational attainment or mobility, because these asset
interventions are equipped to address
both. Further, we can begin to see how
CSAs can be thought of as a life course
intervention beginning to demonstrate
effects as early as age 4 and extend
beyond college to effect children’s capacity as young adults for moving up
the economic ladder (see Table 2).6
In the next section some of the
evidence for the relationship between
CSAs and children’s educational outcomes is reviewed. For more information, the Assets and Education Initiative (AEDI) at the School of Social
Welfare at the University of Kansas
released a comprehensive report on
the assets and education field (Elliott, 2013a) that documents in greater
detail the evidence, from field demonstrations, theory development, and
analyses of secondary datasets, linking asset accumulation with improved
educational outcomes. It is worth noting that, at this point, it is not any one
study or finding that makes the potential of CSAs for improving children’s
educational outcomes compelling;
it is the collection of studies using a
variety of methods that makes it compelling. Further, now that evidence is
starting to come in from the SEED OK
experiment that supports theory (e.g.,
asset effects occur, at least in part,
through expectations) and findings
found in studies using secondary data
(e.g., small dollar account effects),
there is more reason for optimism.
Preschool (Ages 0 – 5)7
While this paper primarily focuses
on children’s outcomes, during the
ages of 0 – 5 parent outcomes are
included. This is because it is early in
the child’s development to measure
many of the outcomes of interest related to children and because there are
clear ways in which parental attitudes
and behaviors influence children’s
educational trajectories. Early findings from the SEED OK experiment
Table 2: Issued Addressed by Children’s Savings Accounts (CSAs)
Age
Postsecondary
Education
CSAs
Account Ownership
(i.e., expect to go to college & have strategy to pay for college)
Socioemotional Well-Being of Child
Mental Health of Parents (e.g., improved parental expectations
and maternal depression)
0-5
Preschool
6-18
Postsecondary Ed.
Prep
Math, Reading, College Saver Identity
18-21
Postsecondary Ed.
Enrollment
Higher Odds of Enrolling
22-25
Postsecondary
Graduation
Initial Assets
26-40
Balance Sheet
Health
41-72
Economic Mobility
PAGE 10
Accumulation of Savings
Higher Odds of Graduating
Gateway Financial Instrument
Diversified Asset Portfolio (savings account, stocks, retirement
savings, homeownership)
Accumulation of Assets
Reduced College Debt
Initial Assets (the amount of assets young adults start off with
will be important to determining the amount of assets they are
able to accumulate)
More Assets (e.g., net worth, home value)
More Income from Assets
More Retirement Savings
}
Initial Assets
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
indicate that mothers who have CSAs
(i.e., treatment group) report lower
levels of depressive symptoms than
mothers without CSAs (i.e., control
group) (Huang, Sherraden, & Purnell,
2014). Further, findings from SEED
OK indicate that having a children’s
savings account has positive effects
on social-emotional development of
children, particularly low-income
children, approximately four years old
(Huang, Sherraden, Kim, and Clancy,
2014). These effects occur even though
families have saved very little money
in the account to date.
Post-Secondary Preparation (Ages 6 – 17)
Enrolling in college is not only a
question of financial preparedness;
evidence suggests that the longer term
challenge of ensuring that students
are academically equipped to succeed
in college is just as important and perhaps even more difficult to address.
Here, too, asset possession shows the
potential for positive outcomes, largely through cultivating a college-saver
identity that increases student engagement and builds parents’ expectations
of higher education (Elliott, Destin, &
Friedline, 2011).
A student with a college-saver identity
expects to go to college and has identified savings as a strategy to pay for it.
That is, it’s not enough to imagine that
college is in your future; you have to
believe that there’s actually a way to
get there. Students with college-saver
identities are more likely to attend
and graduate from college than even
students who have college-bound
identities.
Wide gaps in college expectations
by income levels and race almost
disappear among all students with
college savings of $500 or more (see
Table 1). This is where judging the
potential power of a CSA intervention by a metric other than mere asset
accumulation—in the form of growing balances—is essential. Clearly,
even when balances are not enough to
actually finance the college education,
there are other factors—those aspirational, attitudinal, and behavioral
effects—at work.
The college-saver identity appears
to have implications for students’
academic preparation, in the long run,
likely a greater policy challenge than
even facilitating enrollment. Specifically, findings suggest that children
with savings designated for school
have statistically significant higher
math scores than their peers without
designated savings (Elliott, 2009; Elliott, Jung, & Friedline, 2010; Elliott,
Jung, & Friedline, 2011). Moreover, Elliott’s (2009) findings suggest that part
of this relationship can be explained
by the effects of children’s savings
on children’s college expectations, a
proxy for the college-saver identity.
That is, part of how children’s savings
may influence math scores is through
their relationship with children’s
college expectations. To the extent to
which students’ academic futures will
be influenced by their qualifications at
the point of college application, CSAs’
Table 1. Descriptive Statistics on Savings Account and College Expectations
By Race
Black
White
School-designated savings of $500+
94%
97%
School-designated savings of $1-$499
87%
90%
No account
64%
78%
Low-Income (> $50,000)
High-Income (>$50,000)
School-designated savings of $500+
95%
97%
School-designated savings of $1-$499
82%
98%
No account
66%
76%
By Income
potential effects on achievement earlier in their educational careers may
be another important dimension.
Post-Secondary Enrollment (Ages 18 – 21)
Today, a sizable number of minority
and low-income children with the will
and academic ability to attend college
fail to transition to college after high
school graduation or to succeed once
enrolled. This is wilt, and reducing it
represents one of the most promising
approaches to improving the educational outcomes of disadvantaged
youth, since it builds on their own
hopes and aligns their experiences
with their dreams. Here, the narrative that would have us believe that
poor children have different values
or priorities than more advantaged
ones is belied by evidence of the gap
between these students’ expectations
and aspirations, and their educational
attainment.
Evidence that having a college-saver
identity reduces wilt includes the following:
„„ One study found that 75% of
children with their own savings
are on course compared to 45% of
children without savings of their
own (Elliott & Beverly, 2011).8
„„ Findings indicate that only 35% of
low- to moderate-income (below
$50,000) children are on course
compared to 72% of high-income
($50,000 or above) children.
Regarding children’s savings,
6 If the field chooses to view CSAs as being capable
of both addressing the problem of post-secondary
attainment and building the capacity of children for
moving up the economic ladder, this might have
implications for the kind of delivery system chosen
or at least how that system will have to be adapted
to allow for multiple purposes that extend across a
child’s life.
7 It is important to point out that the age groups do
not represent when the studies discussed in each
section are conducted; but rather, they represent
theoretical developmental time points when CSAs
may focus on different outcomes.
8 Students who are currently enrolled or who have
graduated from college are defined as being “on
course,” whereas, children who are not currently
enrolled and have not graduated from college are
defined as being “off course.”
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 11
Children in low- and moderate-income households (i.e., those that have incomes below $50,000
per year) with college-saver identities and school-designated savings of $1 to $499 or $500 or
more are about three times more likely to graduate college than children who have a collegebound identity only.
46% of low- to moderate-income
children with school savings of
their own are on course; conversely,
only 24% of low- to moderateincome children without savings
are on course (Elliott, MoniqueConstance, & Song, 2011).
„„ In the aggregate, children who
have a college saver identity and
$500 or more in school designated
savings are about two times more
likely to graduate from college than
children who have a college-bound
identity only (Elliott, 2013b).
„„ Among black students, only 37%
are on course compared to 62%
of white students. Controlling for
similar factors as the previous two
studies, findings suggest that both
black and white children who have
savings are about twice as likely
to be on course as their counterparts without savings of their own
(Elliott & Nam, 2011).
„„ Children in low- and moderateincome households (i.e., those that
have incomes below $50,000 per
year) with college-saver identities
and school-designated savings of
$1 to $499 or $500 or more are about
three times more likely to graduate
college than children who have a
college-bound identity only (Elliott,
Song, & Nam, 2013).
Wilt provides one of the more vivid
illustrations of the failure of the education path to act as the great equalizer in today’s society. However, the
potential of CSAs to enhance education’s ability to reduce wilt provides
a promising approach to improving
disadvantaged youth’s educational
outcomes.
„„ Further, Black children with college-saver identities and schooldesignated savings of $500 or more
are about two and half times more
likely to graduate from college
than Black children with a collegebound identity only (Friedline,
Elliott, & Nam, 2013).
Post-Secondary Graduation (Ages 22 – 25)
In contrast to high-dollar student
loans, which show some potential for
negative effects on college graduation
(Dwyer, McCloud, & Hodson, 2012;
Kim, 2007), research suggests that
college savings shows some potential
for improving a student’s chances of
making it all the way to graduation:
PAGE 12
Educational achievement is worth
striving for and is commonly believed
to be the best-known lever for building children’s capacity for upward
mobility. However, given the growing gap in educational attainment by
family income, the current education
system—and higher education, in
particular—does not provide poor
children with the same opportunity
for economic mobility that it does
for higher-income children (Haskins,
2008). Confronting this gap has never
been more important than today. We
must turn to enhancing opportunities
for students to increase their selfefficacy and expectations related to
educational achievement and for their
families to prepare financially for college. We also must consider whether
our policies place college graduates
in a strong position to succeed financially as young adults as well.
Asset-building strategies may be a
way to make progress on all of these
goals and maximize the benefit of going to college. For example, if family
savings correlate with better student
engagement at an early age, CSAs
may allow them to take full advantage
of the primary and secondary education they receive and position them
for greater college achievement. If
household asset accumulation correlates to greater academic performance, students may be better able to
compete successfully for financial aid,
as the landscape shifts from need- to
merit-based scholarships. Given the
relationship between engagement and
academic attainment, the prospect of
affecting children’s orientation toward
their education for relatively small
initial investments deserves greater
attention.
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
CSAs, AN INSTITUTIONAL FRAMEWORK THAT PROVIDES THE
PLUMBING FOR THE POOR TO RECEIVE TRANSFERS AND BUILD ASSETS
According to Sherraden and Barr
(2005), a formal institution within the
applied social science context can be
thought of as a type of intervention to
alter behaviors and outcomes of individuals. It is suggested here that CSAs
are a type of institution that addresses
the problem of building people’s
capacity to use their own effort and
ability to achieve economic mobility
by augmenting their capacity to gain
additional skills and use wages to
accumulate assets, and by providing
people with an institutional structure
to receive asset building transfers.
Reducing Post-Secondary
Debt, Does it Improve Young
Adults’ Balance Sheets?
The post-college period is tremendously important for building a
foundation for asset accumulation and
subsequent mobility in adulthood,
particularly given emerging evidence
about the long-term effects of asset deprivation in young adulthood
(Elliott and Lewis, 2013; Hiltonsmith,
2013). For example, findings indicate
that in the short term households with
college debt have 63% less net worth,
40% less home equity, and 52% less
retirement savings than those with no
outstanding student debt (Elliott &
Lewis, 2013). Over the long term, Hiltonsmith (2013) finds that an average
student debt load ($53,000) for a dualheaded household with bachelors’ degrees from four-year universities leads
to a lifetime wealth loss of nearly
$208,000. Although human capital is
created by student debt, and graduates can leverage this human capital
into earnings and wealth accumulation potential, it appears that they still
end up far behind their peers without
student debt and that even the higher
earnings potential secured with their
advanced degree may not be sufficient
to accumulate an adequate asset base.
Moreover, Hiltonsmith (2013) suggests that students who graduate with
average student debt are forced to
invest significantly less in retirement
savings, or to delay purchasing other
wealth-building items like a home,
during the early part of their working
lives. Given the relationship between
initial asset levels and subsequent
economic mobility, these early losses
may account for much of the wealth
inequality seen later in life.
While young people who go to college are undoubtedly better off than
those who do not attend college, the
evidence of student debt’s harmful
financial effects on borrowers’ lives
post-college sheds serious doubt on
the rationalization of our student
loan model. This model holds that
any accumulation of student debt in
pursuit of a college education is a wise
investment (see, for example, Rothstein & Rouse, 2011). Especially for
capital accumulation, timing matters.
Contrary to the current understanding about when and how borrowers
manage their debt obligations, the
comparatively heavy burden imposed
by student debt repayment at the
period of a borrower’s lowest earnings
(immediately following college) may
create particular problems and inequities later in life. This effect is realized
through assets’ effects on later asset
accumulation and income potential.
Oliver and Shapiro (2006) suggest
that the high unmet need for college is
largely the result of low asset accumulation. However, asset advantages
start during the preparation stage.
According to Lino (2012), on average,
families allocate about 17% of their
total budget to education-related expenses from birth through age 17. This
adds up to about $38,576 in educationrelated expenditures before figuring
in college costs. These investments are
increasingly in human capital devel-
opment, not consumer goods (Kornrich & Furstenberg, 2010). Given this,
inequality in parental investments
may lead to some children gaining
an advantage over others in preparing for college, irrespective of innate
ability. The advantages extend into
the college years. For example, higherincome families are more likely to
have saved money for their children’s
education than their lower income
counterparts, making college more affordable (Sallie Mae, 2012; Steelman &
Powell, 1991). This savings may lead
to less student loan debt. Findings
suggest that graduates with parents
who had put aside college savings
for them when they were high school
sophomores are about 39% less likely
to have student loan debt than graduates who did not have parents who
had put aside college savings for them
when they were high school sophomores. Further, graduates with parental college savings have $3,208.88
less student loan debt than graduates
who did not (Elliott, Lewis, Nam, &
Grinstein-Weiss, 2014). Freed from
the inequitable effects of high student
loan debt that erode the relative value
of their post-secondary degrees, low
and middle income American youth
may realize a greater return on their
educational investments and begin
their adulthoods with healthier balance sheets.
Assets May Increase the
Capacity of Income to
Translate to Assets
Underscoring the potential balance
sheet effects, research suggests that
initial asset levels are also important
for future asset accumulation; that
is, assets beget assets. Households
at the 75th percentile enjoy over five
times the return on asset holdings
experienced by households at the
25th percentile (Elliott & Lewis, 2014).
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 13
I
n the short term households with college debt
have 63% less net worth,
40% less home equity, and
52% less retirement savings than those with no
outstanding student debt
(Elliott & Lewis, 2013). Over
the long term, Hiltonsmith
(2013) finds that an average
student debt load ($53,000)
for a dual-headed household
with bachelors’ degrees
from four-year universities
leads to a lifetime wealth
loss of nearly $208,000.
PAGE 14
More specifically, households at the 25th
wealth percentile experience a $0.35 return for every one dollar increase in net
worth compared to $1.81 for those at the
75th percentile (Elliott & Lewis, 2014).
Shapiro, Meschede, and Osoro (2013)
find that a $1.00 increase in income later
translates to a $5.00 increase in wealth
for Whites, but only a $0.70 increase for
Blacks. However, they find when Blacks
start off with similar levels of assets, they
have a return of $4.03 for each dollar
increase in income.
Moreover, findings suggest that
among families earning less than $50,000
annually, net worth predicts income but
income does not predict net worth, contrary to what we think we understand
about the relationship between income
and assets. Among families earning
$50,000 or more, however, there appears to be evidence of a virtuous circle
where income predicts net worth and net
worth predicts income, which perhaps
reflects the more complementary nature
of income streams—labor, capital, and
transfer.
In addition to facilitating economic
mobility, initial asset levels may also provide stability, including during economic
downturns, thus protecting against
downward mobility. In this way, differences in wealth holdings may exacerbate
inequality following periods of recession,
as capital stores rebound more quickly
than labor market positions and as those
with an asset cushion may be able to better navigate—and even avoid—adverse
economic conditions (Elliott & Lewis,
2014).
These findings make clear that the
amount of assets accumulated is not
solely about the effort and ability people
invest at a job, or about their personal
thrift or future orientation. Instead, policies that differentially facilitate access to
wealth creation—or not—play a significant role in determining later inequities.
Therefore, the message is that transfers
designed intentionally to build assets
align with the idea of America being a
meritocracy.
CSAs, are they a Gateway
Financial Instrument?
These children’s savings accounts can
have powerful educational effects, as
described above, and they can also serve
as the initial asset platform leveraged for
later economic mobility. Full accounting of the potential benefits of account
ownership from an early age should
include the later result of a more diversified asset portfolio and healthier financial engagement in adulthood. Emerging
research by Friedline and colleagues
indicates that accruing savings as a child
is associated with increased likelihood of
asset accumulation as young adults. As a
result, children may leave college better
equipped to pursue important financial
goals as young adults. For example,
Friedline and Elliott (2013) find that
children between ages 15 to 19 who have
savings are more likely to have a savings account, credit card, stocks, bonds,
vehicle, and a home at age 22 to 25 than
if they did not have savings of their own
between ages 15 to 19. Friedline, Johnson, and Hughes (2014) find that the
overwhelming majority of young adults
owned a savings account at or before
the acquisition of all financial products
including checking, CD, money market,
savings bond, stock, and retirement accounts. What the evidence suggests is
that CSAs may be a gateway not only to
greater educational attainment, itself a
conduit of economic mobility, but also
to a more diversified asset portfolio. As
such, it might matter little if children are
able to accumulate large stocks of assets
in their savings accounts, but the test is
whether, as a gateway financial instrument, CSAs lead to greater asset accumulation in other forms such as stocks,
retirement accounts, and real estate. For
example, Friedline et al. (2014) find that
while owning a savings account as a
young adult only contributed $50 toward
liquid assets, the added contribution
of combined stock and retirement accounts—themselves products of savings
account ownership—was $5,283.
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
These findings make clear that the amount of assets accumulated is not solely about the effort
and ability people invest at a job, or about their personal thrift or future orientation. Instead,
policies that differentially facilitate access to wealth creation—or not—play a significant role in
determining later inequities. Therefore, the message is that transfers designed intentionally to
build assets align with the idea of America being a meritocracy.
CONCLUSION
In sharp contrast to the myth of
a blank economic slate in which an
individual’s future prosperity aligns
neatly with his or her effort and ability, evidence presented in this paper
begins to suggest that initial asset
levels may significantly influence the
power of labor income to generate
additional wealth and income. If this
is true, contrary to the holdings of our
collective American mythology, labor
income alone is not enough, even
with considerable expense of personal
initiative. To combat poverty and provide economic mobility, U.S. house-
CAPITAL
U.S. HOUSEHOLD
INCOME
LA
BO
R
holds’ income should be thought of
as a three-legged stool: labor, capital,
and transfers with education being the
foundation upon which the three legs
rest. Only this integrated approach
may provide real economic wellbeing.
Within the context of everything
that has been discussed in this paper,
it may make sense that educational
inequities are the first big problem
that CSAs tackle. Given what people
think CSAs should be used for, given
that education is one of the three main
ways Americans believe the problem
of poverty should be fought (labor
and wages the other two),9 given that
it is where momentum is currently
found around establishing CSAs, and
given that this is the area for which
there is the most evidential support
for CSAs it may make the most sense,
at this time, to coalesce around CSAs
for solving educational inequities as
a path to economic mobility. In doing so, we do not forsake the larger
promise that CSAs hold, of building
the capacity of children to be economically mobile, education is but an
important step along the way toward
building children’s capacity for to be
economic mobile.
RS
SFE
AN
TR
Moreover, Pew Charitable Trust
(2013) finds capital income has a
strong relationship with moving
up the economic ladder. They find
that Americans who move from the
bottom of the income ladder had six
times higher median liquid savings,
eight times higher median wealth,
and 21 times higher median home
equity than those who remained at
the bottom. So, by building a more
diversified asset portfolio, CSAs may
result in increased asset accumulation,
which, in turn, may lead to higher
odds of moving up the economic ladder. This virtuous cycle is the engine
of the shared understanding of the
American Dream, and it is a pathway
to prosperity that should be open to
all American children.
EDUCATION
T
o combat poverty
and provide economic mobility, U.S.
households’ income should
be thought of as a threelegged stool: labor, capital,
and transfers with education
being the foundation upon
which the three legs rest.
Only this integrated approach
may provide real economic
well-being. CSAs can facilitate
9 Halpin, J., & Agne, K. (2014). 50 years after LBJ’s war
on poverty: A study of American attitudes about
work, economic opportunity, and the social safety
net. Half in Ten. Washington, DC: Center for American Progress.
educational achievement, positioning households for greater
labor earnings, they help them
build capital, and serve as the
infrastructure for progressive,
wealth-building transfers.
CHILDREN’S SAVINGS ACCOUNTS (CSAs) BUILD CHILDREN’S CAPACITY FOR ECONOMIC MOBILITY
PAGE 15
References
Bengali, L. and Daly, M. (2013). U.S. economic mobility:
The dream and the data. San Francisco, CA: The
Federal Reserve Board of San Francisco. Retrieved
from http://www.frbsf.org/economic-research/publications/ economic-letter/2013/march/us-economicmobility-dream-data/
Condon, B., & Wiseman, P. (2013). AP impact: Recession, tech kill middle-class jobs. Retrieved from
http://news. yahoo.com/ap-impact-recession-techkill-middle-class-jobs-051306434--finance.html
Consortium of Higher Education Tax Reform. (2013).
Higher education tax reform: A shared agenda for
increasing college affordability, access, and success.
Washington, DC: The Reimagining Aid Design and
Delivery (RADD) Consortium for Higher Education
Tax Reform.
Cramer, R., Black, R., & King, J. (2012). The assets
report 2012: An assessment of the federal “assetbuilding” budget. Washington, DC: New America
Foundation: Asset Building Program.
Dwyer, R. E., McCloud, L., & Hodson, R. (2012). Debt
and graduation from American universities. Social
Forces, 90(4), 1133‒1155.
Elliott, W. (Ed.), (2013a). Building expectations, delivering results: Asset-based financial aid and the future
of higher education. In Biannual report on the assets
and education field. Lawrence, KS: Assets and Education Initiative (AEDI).
Elliott, W. (2013b). Small-dollar children’s savings accounts and children’s college outcomes. Children and
Youth Services Review, 35(3), 572-585.
Elliott, W. (2009). Children’s college aspirations and
expectations: The potential role of college development accounts (CDAs). Children and Youth Services
Review, 31(2), 274-283.
Elliott, W., & Beverly, S. (2011). Staying on course: The
effects of assets and savings on the college progress
of young adults American Journal of Education, 117(3),
343-374.
Elliott, W., Destin, M., & Friedline, T. (2011). Taking
stock of ten years of research on the relationship between assets and children’s educational outcomes:
Implications for theory, policy, and intervention.
Children and Youth Services Review, 33, 2312-2328.
Elliott, W., Jung, H., and Friedline, T. (2011). Raising math scores among children in low-wealth
households: Potential Benefit of Children’s School
Savings. Journal of Income Distribution, 20(2), 72-91.
Elliott, W., Jung, H., Kim, K., and Chowa, G. (2010). A
multi-group structural equation model (SEM) examining asset holding effects on educational attainment by race and gender. Journal of Children and
Poverty, 16(2), 91-121.
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).
Elliott, W. and Lewis, M. (2013). Are student loans widening the wealth gap in America? It’s a question of equity.
Lawrence, KS: Assets and Education Initiative
(AEDI).
Elliott, W., Lewis, M., Nam, I., & Grinstein-Weiss, M.
(2014). Protecting students from student loan debt: Can
parent’s college savings help? Paper presented at the
Balance Sheets of Younger Americans: Is the American Dream at Risk? St. Louis, MO.
Elliott, W. and Nam, I. (2012). Direct effects of assets
and savings on the college progress of Black young
adults. Educational Evaluation and Policy Analysis,
34(1), 89-108.
Elliott, W., Constance-Huggins, M., and Song, H. (2013).
Improving college progress among low- to moderate-income (LMI) young adults: The role of assets.
Journal of Family and Economic Issues 34, 382-399.
Elliott, W., Song, H-a, and Nam, I. (2013). Small-dollar
accounts, children’s college outcomes and wilt. Children and Youth Services Review, 35 (3), p. 535-547.
Friedline, T., & Elliott, W. (2013). Connections with
banking institutions and diverse asset portfolios
in young adulthood: Children as potential future
investors. Children and Youth Services Review, 35(6),
994-1006.
Friedline, T., Elliott, W., and Nam, I. (2013). Small-dollar
children’s savings accounts and children’s college
outcomes by race. Children and Youth Services Review,
35 (3), p. 548-559.
Friedline, T., Johnson, P., & Hughes, R. (2014). Toward
healthy balance sheets: The role of a savings account
diversification and accumulation. Paper presented at
the Balance Sheets of Younger Americans: Is the
American Dream at Risk? St. Louis, MO.
Gilbert, N. (2008). The American class structure: In an age
of growing inequality (7 ed.). Thousand Oaks, CA:
Pine Forge Press.
Goldberg Jr., E. T., Friedman, B., & Boshara, R. (2010).
CSA legislative challenges and opportunities. Children and Youth Services Review, 32(11), 1609-1616.
Hamilton, L. T. (2013). More is more or more is less?
Parental financial investments during college.
American Sociological Review, 78(1), 70‒95.
Harrison, B., & Bluestone, B. (1988). The great u-turn:
Corporate restructuring and the polarizing of America.
New York, NY: Basic Books.
Hiltonsmith, R. (2013). At what cost: How student debt
reduces lifetime wealth (pp. 1-15). New York: Demos.
Huang, J., Sherraden, M., & Purnell, J. (2014). Impacts of
Child Development Accounts on maternal depressive symptoms: Evidence from a randomized statewide policy experiment. Social Science & Medicine,
112, 30–38. doi:10.1016/j.socscimed.2014.04.023
Internal Revenue Service. (2013). American opportunity
tax credit: Questions and answers. Retrieved from
http://www.irs.gov/uac/American-Opportunity-TaxCredit:-Questions-and-Answers
Kim, D. (2007). The effects of loans on students’ degree
attainment: Differences by student and institutional
characteristics. Harvard Educational Review, 77(1),
64-100.
Kornirch, S., & Furstenberg, F. (2010). Investing in
children: Changes in parental spending on children
1972 to 2007. University of Sydney: The United
States Studies Center
Lino, M. (2012). Expenditure on children by families,
2011. U.S. Department of Agriculture: Center for
Nutrition Policy and Promotion.
Mishel, L. (2012). The wedges between productivity and
median compensation growth. Washington, DC:
Economic Policy Institute. Retrieved from http://
www.epi.org/publication/ib330-productivity-vscompensation/
Nam, Y., Kim, Y., Clancy, M., Zager, R., & Sherraden,
M. (2013). Do Child Development Accounts promote
account holding, saving, and asset accumulation
for children’s future? Evidence from a statewide
randomized experiment. Journal of Policy Analysis
and Management, 32(1), 6–33. doi:10.1002/pam.21652.
Oliver, M. L., & Shapiro, T. M. (2006). Black wealth/white
wealth: A new perspective on racial inequality (Vol.
Tenth-Anniversary Edition). New York: Routledge.
Pew Charitable Trust. (2013). Moving on up: Why do
some Americans leave the bottom of the economic
ladder, but not others? Washington, DC.
Piketty, T. (2013). Capital in the Twenty-First Century.
Boston, MA: Harvard University Press.
Rosenberg, J. (2013). Measuring income for distributional
analysis (pp. 1-14). Washington, DC: Tax Policy Center, Urban Institute and Brookings Institution.
Sallie Mae. (2012). How America pays for college. Newark,
DE: Sallie Mae. Retrieved from website: https://
www. salliemae.com/assets/Core/how-Americapays/HowAmericaPays2012.pdf
Schwartz, S. (2008). Early commitment of student financial aid: Perhaps modes improvement. In S. Baum,
M. McPherson & P. Stele (Eds.), The effectiveness of
student aid policies: What the research tells us (pp. 117140). New York, NY: The College Board.
Sen, A. K. (1999). Development as freedom. New York:
Random House.
Shapiro, T. M, Meschede, T., & Osoro, S. (2013). Widening roots of the racial wealth gap: Explaining the blackwhite economic divide. Institute on Assets and Social
Policy, (IASP) Brandeis University. Retrieved from
IASP website: http://iasp.brandeis.edu/pdfs/Author/
shapiro-thomas-m/racialwealthgapbrief.pdf
Sherraden, M. (1991). Assets and the poor: A new American welfare policy. Armonk, NY: M.E. Sharpe.
Sherraden, M., & Barr, M. (2005). Institutions and inclusion in saving policy. In N. P. Retsinas & E. S. Belsky
(Eds.), Building assets, building wealth: Creating wealth
in low-income communities (pp. 286-315). Washington
D.C.: Brookings Press.
Steelman, L. C., & Powell, B. (1991). Sponsoring the
next generation: Parental willingness to pay for
higher education. The American Journal of Sociology,
96(6), 1505-1529.
Urahn, S. K., Currier, E., Elliott, D., Wechsler, L., Wilson, D., & Colbert, D. (2012). Pursuing the American
dream: Economic mobility across generations
Economic Mobility Project. Washington, DC: The Pew
Charitable Trusts.
Washington Post-Miller Center. (2013). Post-Miller center poll: American dream and economic struggles.
Retrieved from http://www.washingtonpost.
com/page/2010-2019/WashingtonPost/2013/09/28/
National-Politics/Polling/release_266.
xml?uuid=uD8cGiiSEeOKs7WqzJ4RZQ
About CFED
CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and
programs that help them achieve the American Dream, including buying a home, pursuing higher education,
starting a business and saving for the future. As a leading source for data about household financial security and
policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest
in social enterprises that create pathways to financial security and opportunity for millions of people.
Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally
through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.
CORPORATION FOR ENTERPRISE DEVELOPMENT 1200 G STREET, NW SUITE 400 WASHINGTON, DC 20005