Does Structural Inequality Begin with a Bank Account? Creating a Financial Stake in College: Report II of IV
Author: Elliott, William, III
Date: 2012-01-00
Type: Reports - Evaluative
Subjects: Banking,Money Management,College Attendance,Children,Low Income Groups,Economically Disadvantaged,Family Income,Socioeconomic Status,Ownership,Young Adults,Paying for College,Social Structure,Socialization,Federal Legislation

"Creating a Financial Stake in College" is a four-part series of reports that focuses on the relationship between children's savings and improving college success. This series examines: (1) why policymakers should care about savings, (2) the relationship between inequality and bank account ownership, (3) the connections between savings and college attendance, and (4) recommendations to refine children's savings account proposals. This series of reports presents evidence from a set of empirical studies conducted by Elliott and colleagues on children's savings research, with an emphasis on low-income children, relevant to large-scale policy proposals. One such proposal, The ASPIRE Act, would encourage savings by opening an account for every newborn child, seeding the account with an initial deposit and progressively matching contributions, and designating accumulated resources to support post-secondary education or other targeted uses such as homeownership or retirement. Collectively, these reports build on the compelling observation that children with savings in their name are given a stake in their future. As such, they are more inclined to take control over their educational experience and feel more empowered to attend college and persist through graduation. Report II presents evidence that structural inequalities have created an unequal playing field for low-income families and their children to build assets. Children in families with higher incomes and greater assets are more likely to have relationships with banks and access to other institutional structures that support savings (Beverly & Sherraden, 1999; Sherraden, 1991). Because children's savings is an important predictor of children's educational outcomes (e.g., Elliott, 2011; Elliott & Beverly, 2011a, b), inequity in institutionalized opportunities to save and accumulate wealth among children may weaken the effectiveness of the education institution to act as the "great equalizer" in society. Thus, children's savings accounts must be carefully structured to address these inequities for children from low-income families. An institutional theory of savings perspective is helpful to identify the types of structures and mechanisms that promote savings, some of which may be particularly relevant to an examination of how children learn to interact with their finances. Methods are appended. (Contains 2 tables and 6 footnotes.) [For related reports, see "Why Policymakers Should Care about Children's Savings. Creating a Financial Stake in College: Report I of IV" (ED540300); "We Save, We Go to College. Creating a Financial Stake in College: Report III of IV" (ED540298); and "Ideas for Refining Children's Savings Account Proposals. Creating a Financial Stake in College: Report IV of IV" (ED540297).]