Does Structural Inequality Begin with a Bank Account?

“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.

Report II presents evidence that structural inequalities have created an unequal playing field for low-income families and their children to build assets. Children in families with higher incomes and greater assets are more likely to have relationships with banks and access to other institutional structures that support savings (Beverly & Sherraden, 1999; Sherraden, 1991). Because children’s savings is an important predictor of children’s educational outcomes (e.g., Elliott, 2011; Elliott & Beverly, 2011a, b), inequity in institutionalized opportunities to save and accumulate wealth among children may weaken the effectiveness of the education institution to act as the “great equalizer” in society. Thus, children’s savings accounts must be carefully structured to address these inequities for children from low-income families. An institutional theory of savings perspective is helpful to identify the types of structures and mechanisms that promote savings, some of which may be particularly relevant to an examination of how children learn to interact with their finances.

Click here to read the entire report. The first report in the series is available here.




William Elliott III is a senior research fellow in New America's Family-Centered Social Policy program. He is an assistant professor at the University of Kansas (KU), and founder of the Assets and Education Initiative (AEDI) a Center in KU's School of Social Welfare. Dr. Elliott applies his research into the power of saving and the relationship between the act of saving and its impact on later success, particularly educational success.