Child Development Accounts, parental savings, and parental educational expectations: A path model

• Published in: Children and youth services review 2017-08, Vol.79, p.20-28
• Main Authors: Kim, Youngmi, Huang, Jin, Sherraden, Michael, Clancy, Margaret
• Format: Article
• Language: English
• Subjects: Academic achievement; Accounts; Asset building; Child development; Child Development Accounts; Children; Children & youth; College savings; Early childhood education; Educational attainment; Educational expectations; Educational research; Expectations; Experiments; Higher education; Investments; Parenthood education; Parents & parenting; Path analysis; Savings; SEED for Oklahoma Kids; Social experiment; Structural models
• ISSN: 0190-7409; 1873-7765
• DOI: 10.1016/j.childyouth.2017.05.021

Parents' expectations for their children's education, and efforts to foster suitably positive expectations, are worthy of policy attention. Previous research indicates that early saving for a child's postsecondary education can foster and sustain high parental expectations, yet little is known about the operative mechanisms. This study presents analyses from a randomized experiment with Child Development Accounts (CDAs), a policy to encourage early financial investments for education and to shape parents' expectations concerning their young children's educational goals. Our research provides key evidence on whether parental account holding for children's college (a) has a positive impact on parents' expectations for their children's educational attainment and (b) mediates the CDA's effect on their educational expectations at an early stage in their child's development. We employ data from the SEED for Oklahoma Kids (SEED OK) experiment, the first randomized social experiment to test universal and progressive CDAs. We conduct a path analysis and a supplemental analysis with marginal structural models (n=2160). We find that holding a college-savings account has a significant effect on parents' educational expectations for their children and that whether one holds an account mediates the effect of CDAs on such expectations. Findings suggest that CDAs may promote early parental financial investment and high expectations. Research and policy implications are discussed. •Child Development Accounts policy promotes parental financial investment and expectations.•Holding a college savings account has effects on parental expectations for their children.•CDA's effect on expectations is mediated by whether the parent holds a college savings account.