Program Knowledge and Racial Disparities in Savings Outcomes in a Child Development Account Experiment

Yunju Nam (), Elizabeth Hole (), Michael Sherraden () and Margaret M. Clancy ()
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Yunju Nam: University at Buffalo, The State University of New York
Elizabeth Hole: University at Buffalo, The State University of New York
Michael Sherraden: Washington University in Saint Louis
Margaret M. Clancy: Washington University in Saint Louis

Journal of Family and Economic Issues, 2018, vol. 39, issue 1, No 12, 145-162

Abstract: Abstract This study investigated whether participants’ program knowledge was associated with savings outcomes in Child Development Accounts and whether differences in program knowledge explained racial and ethnic disparities in savings outcomes. We used data collected from White, Black, American Indian, and Hispanic treatment participants in the SEED for Oklahoma Kids (SEED OK) experiment (N = 1126). Analysis results indicated that knowledge of SEED OK program features was low, especially among members of minority groups. Logit and Tobit regressions showed that program knowledge was positively related to the likelihood of holding a SEED OK account and to individual savings amounts. Gaps in program knowledge were associated with racial disparities in savings outcomes. If Whites and minorities had the same levels of program knowledge, gaps in savings outcomes would have significantly narrowed. The findings call for the development of policy designs and communication tools to enhance knowledge of program features among households with Child Development Accounts, especially racial- and ethnic-minority households.

Keywords: Racial disparities; Wealth; College savings; Asset building (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10834-017-9544-5

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