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Financial Capability and Asset Accumulation for Children's Education: Evidence from an Experiment of Child Development Accounts

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  • JIN HUANG
  • YUNJU NAM
  • MICHAEL SHERRADEN
  • MARGARET CLANCY

Abstract

type="main" xml:id="joca12054-abs-0001"> On the basis of theoretical framework of financial capability, this study investigates the roles of financial access and financial knowledge in savings and asset accumulation for children's postsecondary education. We use data from SEED for Oklahoma Kids ( N =2,704), a statewide policy experiment offering Child Development Accounts (CDAs) to treatment participants. This study employs quantile regressions with two dependent variables: savings amount (net deposits made by caregivers of children) and total asset amount (the sum of savings, financial incentives offered by the experiment, and investment earnings). Results identify positive and statistically significant interactions between treatment status and financial knowledge, suggesting that access to CDAs moderates the association between financial knowledge and asset accumulation. Providing empirical support for the theory of financial capability, the findings call for interventions that enhance financial knowledge, expand financial access, and improve asset accumulation for all children.

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  • Jin Huang & Yunju Nam & Michael Sherraden & Margaret Clancy, 2015. "Financial Capability and Asset Accumulation for Children's Education: Evidence from an Experiment of Child Development Accounts," Journal of Consumer Affairs, Wiley Blackwell, vol. 49(1), pages 127-155, March.
    • Handle: RePEc:bla:jconsa:v:49:y:2015:i:1:p:127-155
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    References listed on IDEAS

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    2. Alair MacLean & Piotr Paradowski, 2024. "Financial Capability, Cumulative Advantage and Racial Inequality in Wealth," LWS Working papers 44, LIS Cross-National Data Center in Luxembourg.
    3. Bryce L. Jorgensen & David B. Allsop & Samuel D. Runyan & Brandan E. Wheeler & David A. Evans & Loren D. Marks, 2019. "Forming Financial Vision: How Parents Prepare Young Adults for Financial Success," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 553-563, September.
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    5. Sicong Sun & Yu-Chih Chen & David Ansong & Jin Huang & Margaret S. Sherraden, 2022. "Household Financial Capability and Economic Hardship: An Empirical Examination of the Financial Capability Framework," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 716-729, December.
    6. Frank M. Magwegwe & Maurice M. MacDonald & HanNa Lim & Stuart J. Heckman, 2023. "Determinants of financial worry," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(1), pages 171-221, January.
    7. Julie Birkenmaier & Brandy Maynard & Youngmi Kim, 2022. "Interventions designed to improve financial capability: A systematic review," Campbell Systematic Reviews, John Wiley & Sons, vol. 18(1), March.
    8. Yunju Nam & Margaret S. Sherraden & Eun Jeong Lee & Jin Huang, 2022. "Building financial capability among low‐income older Asian immigrants: The roles of financial access and locus of control," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(4), pages 1683-1704, December.
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    11. Maya Haran Rosen & Ofir Pinto & Olga Kondratjeva & Stephen Roll & Aytakin Huseynli & Michal Grinstein-Weiss, 2021. "Household Savings Decisions in Israel’s Child Savings Program: The Role of Demographic, Financial, and Intrinsic Factors," Journal of Family and Economic Issues, Springer, vol. 42(2), pages 368-386, June.
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