Ideas for Refining Children's Savings Account Proposals

Policy Paper
Jan. 26, 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.

This report suggests that Children’s Savings Accounts (CSAs) are a type of formal institution designed to alter children’s savings and educational behaviors. Specifically, CSAs have the potential to serve as a policy vehicle to allocate resources (intellectual and material) to low- and moderate-income children so that they can compete in the 21st century. In today’s highly technical, specialized, global world, effort and ability are no longer enough for low-income families to lift themselves out of poverty. Access to high-quality institutions and the resources they provide are critical to being able to compete. Beginning in the 1990s, CSAs were proposed as a way to create an inclusive and accessible opportunity for lifelong savings and asset building. CSAs have been discussed as a potentially novel and promising asset approach for helping children think about their future and prepare for college.

Click here to read the entire report.

Report I in the series, Why Policymakers Should Care about Children's Savings, is available here.

Report II in the series, Does Structural Inequality Begin with a Bank Account? is available here.

Report III in the series, We Save, We Go to College, is available here.