2016 News

How Israel implements child accounts will be crucial

Michal Grinstein-Weiss, associate director of the Center for Social Development (CSD), spent part of December traveling in Israel on an important mission: to spread the word about how Israel can best implement its new law to provide universal child savings accounts, known in the United States as Child Development Accounts (CDAs), to all newborns. 

Israel’s parliament passed the law this past November based on a proposal by Grinstein-Weiss and rooted in years of research largely led by CSD’s Policy Director Margaret Clancy. The new law is a step toward a better future for children in Israel.

The law takes effect in January 2017 for children born that month and beyond. The strategies used to implement the accounts will be central to whether they ultimately do help young people build the assets they’ll need to succeed in life.

Grinstein-Weiss delivered the keynote speech about the accounts at a conference organized by a major Israeli bank and Calcalist, a leading business newspaper. Calcalist also covered Grinstein-Weiss’ speech and posted her presentation on its website. In addition, she gave interviews to other major news outlets, Israel’s leading television news station.

Here are some of the implementation strategies she outlined:

  • Make the account restricted to asset-building purposes, such as education, starting a business, the purchase of a first home or home improvements;
  • Use the existing infrastructure for administering the accounts;
  • Make the accounts progressive, with higher contributions going toward lower-income children to help address the growing inequality in Israel;
  • Integrate the accounts into the school curriculum;
  • Create a public campaign to increase awareness about the account and encourage families and friends to make frequent contributions.

In Israel, 29 percent of children live in poverty. A growing body of evidence suggests that assets, not income, are associated with increased life satisfaction, improved health, more participation in the workforce, better performance of children at school, and greater involvement in the community.