2018 News

On the agenda: How to advance Child Development Accounts

​About 50 researchers, practitioners, policymakers and funders met this month in Washington, D.C., to discuss how to advance the field of Child Development Account (CDA) programs by making them sustainable and scaleable to reach millions.

Michael Sherraden, director of the Center for Social Development, and Margaret Clancy, policy director, were among presenters at “Children’s Savings Accounts Initiative: A One-Day Convening to Advance Programs & Policies,” hosted by the Consumer Financial Protection Bureau on May 2 in Washington, D.C.

CDAs, also referred to as CSAs, are programs and policies that enable all children to start building assets early in life for investments in their future, with the potential to become lifelong.

“Over past 25 years, we have been in a period of CDA experimentation, testing and research,” Sherraden said to the group.

The most rigorous study is CSD’s long-term experiment with a random sample from the full population of Oklahoma, known as SEED OK. CSD research shows large positive impacts on having an account, savings and long-term asset accumulation. The $1,000 initial SEED OK deposit, invested in the Oklahoma 529 plan, increased by more than 70 percent over about 10 years—even with a sharp drop during the Great Recession. In addition, research shows positive social and economic development effects of CDAs:

  • Parents maintain higher educational expectations for their children.
  • Parents have a more positive outlook, with less depressive symptoms.
  • Children have better social-emotional development.

Today there are many local and state CDA initiatives, with broad public interest and support, Sherraden said. “This body of work may be sowing the seeds for a more comprehensive strategy for family stability and growth.”

“The vision,” Clancy said, “is a cost-efficient, sustainable and progressive CDA policy that reaches all children nationwide.”

She discussed 10 key design elements for taking CDAs to scale.

The event was sponsored by the CFPB’s Office of Financial Empowerment and is a key part of the CFPB’s Children’s Savings Accounts Initiative.