Household Savings Decisions in Israel’s Child Savings Program: The Role of Demographic, Financial, and Intrinsic Factors

Maya Haran Rosen, Ofir Pinto (), Olga Kondratjeva (), Stephen Roll (), Aytakin Huseynli () and Michal Grinstein-Weiss ()
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Ofir Pinto: Israeli Employment Service
Olga Kondratjeva: Social Policy Institute, Washington University in St. Louis
Stephen Roll: Brown School, Washington University in St. Louis
Aytakin Huseynli: Washington University in St. Louis
Michal Grinstein-Weiss: Brown School, Washington University in St. Louis

Journal of Family and Economic Issues, 2021, vol. 42, issue 2, No 13, 368-386

Abstract: Abstract Israel’s Child Development Account (CDA) program, the Savings for Every Child Program (SECP), is universal and automatically enrolls all children under the age of 18, depositing 51 shekels (approximately USD 14) into their accounts every month. Parents can double this savings amount and can choose an investment vehicle for their children’s deposits. The total realized benefits from the SECP depend heavily on parents’ choices. This study examines how demographic, financial, and intrinsic personality characteristics predict household participation in this program. Using a unique data set combining administrative and survey data, we find that household religion/ethnicity, parental education, and financial circumstances were the most significant predictors of household engagement with the SECP. Important differences in program enrollment and participation are observed by household religion/ethnicity. Our study informs potential policy designs of CDA programs, especially in middle- and high-income countries, and have implications for enabling less-educated and religious/ethnic minority households to save for their children’s future.

Keywords: Child development accounts; Asset building; Savings; Israel (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10834-020-09724-6

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