Abstract
Although some racial inequalities have lessened in the half-century since the passage of the first major civil rights legislation, the racial wealth gap remains and in recent years seems to be widening. Households with children are the least likely to be asset secure or have sufficient resources to enable investment in opportunities for mobility. Viewing inequality from this perspective indicates that what households are able to save and invest for the future might have a more lasting impact on the life chances of children than their current income and consumption. Summarizing data from the Saving for Education, Entrepreneurship, and Downpayment (SEED) Initiative, a quasi-experimental study that is part of a national demonstration of Child Development Accounts (CDAs) in the United States, this paper describes how African-American households engage with one important investment opportunity - college savings accounts for their pre-school children. Combining account monitoring, survey, interview and focus group data, we explore the reasons that many households chose not to open accounts or invest their own money. We offer suggestions for making asset development programs viable for low-income African-American families and their children.
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Notes
There is no official definition of asset poverty or asset security. Haveman and Wolff (2004) simply define asset poverty as having insufficient assets to cover three months of basic needs as defined by the federal poverty line, without considering potential for mobility.
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Acknowledgments
Support for this research came through a grant by the Ford Foundation.
Support for the SEED initiative is funded by the Ford Foundation, Charles and Helen Schwab Foundation, Jim Casey Youth Opportunity Initiative, Citigroup Foundation, Ewing Marion Kauffman Foundation, Charles Stewart Mott Foundation, Richard and Rhoda Goldman Fund, MetLife Foundation, Evelyn and Walter Haas, Jr. Fund, Lumina Foundation for Education, and the Edwin Gould Foundation for Children.
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Shanks, T.R.W., Nicoll, K.L. & Johnson, T. Assets and African Americans: Attempting to Capitalize on Hopes for Children Through College Savings Accounts. Rev Black Polit Econ 41, 337–356 (2014). https://doi.org/10.1007/s12114-014-9185-y
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DOI: https://doi.org/10.1007/s12114-014-9185-y