What are assets?
We define assets as accumulated resources that are invested for social and economic development. These investments can be in human, social, or tangible assets, most often in education, homeownership, and small business development. See also Encyclopedia of Social Work.
Why are assets important?
There is evidence that assets, distinct from income, contribute positively to well-being. Research suggests that assets:
- Promote economic household stability and educational attainment
- Decrease the risk of intergenerational poverty transmission
- Increase health and satisfaction among adults
- Increase local civic involvement
What’s wrong with the current asset building policy in the U.S.?
Low-income Americans are often left out of asset-based policies.
- Lack of access: Most asset-based benefits are distributed through the tax system. Low-income individuals are often ineligible for these benefits because they have little or no tax liability.
- Lack of assets: Low-income individuals are less likely to own assets, such as a home or a business, that are associated with benefits.
- Lack of incentives: Asset limits in public assistance programs such as the Food Stamp Program discourage asset ownership.
What is the goal of asset building?
The goal is inclusion in asset-based policy. By inclusion, we mean:
- universal: everyone participates
- progressive: greater incentives for low-income savers
- life-long: birth to death, and flexible across the life course
- adequate: sufficient assets to intergenerational well-being, with asset accumulation and development occurring across generation
How do people save and accumulate assets?
Our Center has developed a framework that explains saving and asset accumulation in ways that can inform policy decisions. Conventional theories of saving point to individual characteristics to explain levels of wealth. Because of their focus on the individual, few of these theories offer clear policy recommendations for increasing wealth, especially among the poor. Instead, we focus on an institutional theory of saving that emphasizes saving structures and incentives rather than individual characteristics.