Michael Sherraden’s book, Assets and the Poor: A New American Welfare Policy, broke new ground on social policy in 1991. Twenty years later, its impact still is being felt around the world. In Assets and the Poor, Sherraden, PhD, the Benjamin E. Youngdahl Professor of Social Development at the Brown School at Washington University in St. Louis, writes that asset accumulation is structured and subsidized for many non-poor households, primarily via retirement accounts and home ownership. He argues that these opportunities should be available to all and proposes establishing individual savings accounts for the poor — also known as Individual Development Accounts (IDAs). Since Sherraden first proposed IDAs, they have been adopted in federal legislation and in more than 40 states.
State-sponsored college savings plans, often called 529 plans, offer tax incentives to facilitate saving for postsecondary education. Low- and moderate-income families are less likely to have college savings than higher-income families. To address this inequity, a number of states have launched 529 savings match incentive programs. A recently released CSD report examines the program design of all state 529 savings match programs and offers recommendations aimed to facilitate access, increase program participation and perhaps reduce administrative costs.
Evidence supporting the link between savings and college success is growing. Three studies out of the Center for Social Development (CSD) at the Brown School at Washington University in St. Louis offer a connection between assets and college enrollment and completion. “This research underscores the importance of policies and programs that help Americans of all income levels to save for college,” says Margaret Clancy, policy director and College Savings Initiative director at CSD. In a study forthcoming in the Journal of Children and Poverty, CSD researchers found that among youth who expected to graduate from a four-year college, those with a savings account in their name were approximately six times more likely to attend college than those with no account.
A 10-year study on Child Development Accounts (CDAs) has confirmed their viability as a tool for long-term asset building. Beginning as early as birth, CDAs are investment accounts that allow parents and children to accumulate savings for post-secondary education, homeownership or business initiatives.
The MasterCard Foundation announced a partnership with a consortium of four organizations to conduct a landmark, global research initiative that will test how to sustainably deliver savings services to low-income youth in the developing world. The initiative — YouthSave — is based on emerging evidence that suggests linking youth to savings may improve their economic, educational and health-related futures. The four organizations participating in the consortium are Save the Children, the Center for Social Development at Washington University in St. Louis, the New America Foundation, and CGAP (the Consultative Group to Assist the Poor).
TIME magazine has named Michael Sherraden, PhD, the Benjamin E. Youngdahl Professor of Social Development at Washington University in St. Louis, to the 2010 TIME 100, the magazine’s annual list of the 100 most influential people in the world. Sherraden, the founder and director of the Brown School’s Center for Social Development (CSD), is known for his pioneering work on asset building for low-income people.
Child Development Accounts are savings accounts that begin as early as birth and allow parents and children to accumulate savings for post-secondary education, homeownership or business initiatives. “There is evidence that when there are savings and assets in the household – particularly savings in a child’s name – that children have greater educational attainment, are more likely to do well in high school, attend college and graduate from college,” says Michael Sherraden, PhD, the Benjamin E. Youngdahl Professor of Social Development at the Brown School. Sherraden recently was named to TIME Magazine’s TIME 100.
The Center for Social Development at the Brown School is advising and helping to test innovations in asset building — strategies that increase financial and tangible assets for families and businesses — in several countries in East and Southeast Asia.
The straightforward solution for many people living in poverty is building savings. For the 9 million disabled Americans living in poverty, the answer isn’t as simple. “The poverty rate among Americans with disabilities is nearly double that of persons without disabilities, and while there is a complex web of federal and state-based programs offering financial assistance to eligible persons with disabilities, policy rules often preclude the accumulation of assets, which are often key for exiting poverty,” says Michelle Putnam, Ph.D., assistant professor of social work at Washington University. “”New research and public policies have the potential to help people with disabilities to have greater economic resources and become more integrated into their communities.” More …
The recent $2.5 million grant will support the creation of a permanent endowment for the center directed by Michael W. Sherraden.