Preventive Benefits of U.S. Childcare Subsidies in Supervisory Child Neglect

Using data from age 3 of the Fragile Families and Child Wellbeing Study, the current study explores the complex relationships between U.S. childcare subsidies and neglect. Specifically, the study examines two research questions: (i) Are U.S. childcare subsidies associated with self‐reported neglect among low‐income mothers? (ii) What individual types of self‐reported neglect are significantly reduced by receipt of childcare subsidy? Using negative binomial regression examining the relationships among mothers who were income‐eligible for childcare subsidy, we found that childcare subsidy was associated with lower levels of supervisory neglect, indicating an important role of subsidy in the lives of low‐income families.     

Saving Performance in Individual Development Accounts: Does Marital Status Matter?

Research indicates that marriage has a large effect on reducing the risk of poverty and is associated with a higher probability of attaining affluence over the life course when compared with nonmarriage. Using data from the American Dream Demonstration (N =2,364), this study compares savings performances of married and unmarried low‐income participants in a matched savings program—Individual Development Accounts. The results indicate that both married and unmarried low‐income participants can save in Individual Development Accounts. After controlling for program and other participant characteristics, there were no significant differences in savings between married and unmarried participants. We further examined possible factors that are associated with Individual Development Account savings performance for these two groups.     

Ineligible to Save? Asset Limits and the Saving Behavior of Welfare Recipients

ABSTRACT

This article explores how asset limits used to determine eligibility for the Temporary Assistance for Needy Families (TANF) program influence the saving behavior of program participants. The qualitative evidence presented in this study serves to explain how asset limit policy may contribute to the low rate of savings and bank account ownership among the welfare population. From these conversations, it is clear that the existence of asset limits—or, just as importantly, the perception that these limits exist—negatively impacts the saving behavior of TANF recipients.     

Identifying the Effects of Income on Children's Development Using Experimental Data

Prior research suggests that poverty can be detrimental to low‐income children's development. Is this relation capturing the effects of poverty or the effects of other characteristics of low‐income families associated with poverty? Can low‐income children benefit from increases in income? In this paper, an instrumental variables estimation strategy is used with data on nearly 900 children from a random assignment evaluation of a pilot welfare reform program in Minnesota in order to answer these questions and to identify the causal effects of income on children's development. There are some suggestions that increased income improves the development of low‐income children, at least with regard to their school engagement and positive social behavior. Results are discussed with regard to their implication for analysis, as well as research and policy.     

In Search of Housing: Urban Families in Rural Contexts*

Researchers have been following a trend posited by the renowned anthropologist Janet Fitchen, which examines the increasing movement of low‐income people to rural communities drawn not necessarily by labor market forces, but by the characteristics and amenities found in rural towns. This study adds to that literature by focusing on the ways in which public housing availability, changes in housing policy, and rural economic restructuring create opportunities for low‐income families to relocate from urban to rural communities in search of affordable housing. Data collected from an ethnographic sample addressed the following questions: (1) what motivates individuals and families to leave their urban neighborhoods and relocate to rural towns and (2) what challenges do individuals and families have in sustaining stable housing in rural communities? Two main sets of literature relevant to this discussion include studies of patterns of residential mobility and explanations of rural economic restructuring. Both form the conceptual approach of this article by offering a framework to better understand the housing choices and behaviors of low‐income families and the contexts in which these actions are situated.     

Educational Status and Savings Performance in Individual Development Accounts

Abstract

This study examines the relationship between education and savings performance in Individual Development Accounts (IDAs), a matched savings program for the poor. Based on economic and institutional theories of savings, we further investigate whether the relationship between education and savings is mediated by income, intended uses of IDAs, or program factors. The data of this study are from the American Dream Demonstration (N = 2,150), the first national demonstration of IDAs. The results indicate that education was positively related to savings after controlling for program factors and other individual characteristics. Household income and two program factors, monthly savings target and financial education, partially mediated the relationship between education and savings outcomes. These results provide some support for both economic and institutional theories of savings among low-income people. The findings also may help design and implement more effective savings programs for the low-income population and its varying segments.     

Food Self‐provisioning in Europe: An Exploration of Sociodemographic Factors in Five Regions

This article presents the results of an international comparative study on food self‐provisioning, an activity still widespread in the countries of the Global North. We collected the data in a sociological survey done in 2010 as a part of the household energy use research project GILDED. We selected a region with urban and rural areas as a case study in each of the five EU countries, including Scotland, the Netherlands, Germany, the Czech Republic, and Hungary. Our article raises two main research questions: (1) What is the level of food self‐provisioning in the regions? (2) Who participates in it? Additionally, we inquired into the motivations of self‐provisioners using the results of analyses of sociodemographic and food consumption habits for their interpretation. We found that the level of self‐provisioning varies considerably among the regions. Its share ranges from 13 percent in Dutch urban areas to 58 percent in German rural areas. The effects of some sociodemographic and geographic factors differ significantly among the countries. However, we can summarize that living in one's own property, living in a house or in a rural area, having a partner or children, being retired, or having a low income increases the probability of food self‐provisioning.     

Program Knowledge and Racial Disparities in Savings Outcomes in a Child Development Account Experiment

This study investigated whether participants’ program knowledge was associated with savings outcomes in Child Development Accounts and whether differences in program knowledge explained racial and ethnic disparities in savings outcomes. We used data collected from White, Black, American Indian, and Hispanic treatment participants in the SEED for Oklahoma Kids (SEED OK) experiment (N?=?1126). Analysis results indicated that knowledge of SEED OK program features was low, especially among members of minority groups. Logit and Tobit regressions showed that program knowledge was positively related to the likelihood of holding a SEED OK account and to individual savings amounts. Gaps in program knowledge were associated with racial disparities in savings outcomes. If Whites and minorities had the same levels of program knowledge, gaps in savings outcomes would have significantly narrowed. The findings call for the development of policy designs and communication tools to enhance knowledge of program features among households with Child Development Accounts, especially racial- and ethnic-minority households.     

How parents decide to participate and save in their children's asset-building accounts: Implications for practice, policy, and theory

Asset-based social welfare programs focus on helping low to moderate income citizens accumulate wealth in the form of home ownership, savings, small businesses, and higher education. Individual development accounts, savings accounts in which account holders' deposits are matched, are a vehicle often used in these programs. In a national demonstration of children's savings accounts (individual development accounts for children) parents participated in focus groups to discuss how they decided to enroll in this asset-building program, how they decided to open accounts for their children, and how they saved in these accounts. Findings from this study have implications for assetbuilding policy and practice, and institutional theories of saving.     

Financial Strain and Participation in the Supplemental Nutrition Assistance Program

Participation in the Supplemental Nutrition Assistance Program (SNAP) has increased over the past decade. Although poverty and sudden financial shock faced by households via unanticipated adverse events, such as sudden loss of income, are among major contributors, the findings of our study suggest that having an adequate stock of savings and financial assets might reduce the probability of household SNAP participation. Using data from the Panel Study of Income Dynamics, we tested whether a household’s emergency savings, asset poverty, and debt burden could predict SNAP participation separately from the effects of income and program participation. Results demonstrate that a household’s lack of emergency savings and asset inadequacy increased the probability of its SNAP participation. Implications for financial practitioners and policy makers are discussed.     

Retirement plans, personal saving, and saving adequacy

This Issue Brief addresses three questions raised by recent trends in personal saving: How are national savings measured and what is the meaning of the trends in measured personal saving rates, given what is included and what is not included in those measures? What is the effect of retirement saving programs--in particular, 401(k) plans and individual retirement accounts (IRAs)--on personal saving levels? What are the implications of existing saving behavior for the retirement income security of today's workers? The National Income and Product Accounts (NIPA), the most commonly referenced gauge of personal saving, is a widely misunderstood measure. One could argue that a complete measure of saving would include increases in wealth through capital gains, but NIPA does not factor accrued and realized capital gains on stocks and other assets into the saving rate. By one measure, accounting for capital gains results in an aggregate personal saving rate of 33 percent--more than double the rate of four decades ago. A major policy question is the impact of tax-qualified retirement saving plans (i.e., IRAs and 401(k) plans) on personal saving rates. Empirical analysis of this issue is extremely challenging and findings have been contradictory. These programs now represent an enormous store of retirement-earmarked wealth in tax-deferred vehicles: Combined, such tax-deferred retirement accounts currently have assets of about $4 trillion. Ninety percent of IRA contributions are now the result of "rollovers" as employees leave employer plans, like 401(k) plans. While leakage from the system remains a challenge, the majority of the assets in the system can be expected to be available to fund workers' retirements. One could argue that, from a retirement income security perspective, workers in general are better off because IRA and 401(k) programs exist. Surely, many of the dollars in these programs would have been saved even without the programs; but they would not necessarily have been earmarked for retirement and been available to fund retirement expenses. As rollovers become larger, this "partnership" of employment-based qualified plans and IRAs will grow even more important. The evidence indicates that many groups of American workers appear unlikely to be able to afford a retirement that maintains their current lifestyle (at least not without working more years than currently planned). Consensus does not exist on how many workers are at risk or the typical magnitude of their retirement saving shortfall. There is a consensus, however, that a substantial number of individuals are at risk. This is not surprising--despite the fact that the 70 percent of workers are saving for retirement--since relatively few workers know how much it is that they need to accumulate to fund their retirement.     

Does Prior Banking Experience Matter? Differences of the Banked and Unbanked in Individual Development Accounts

Using data from the 4-year American Dream Demonstration, this study compares saving performance and program participation of banked (n = 1,538) and unbanked participants (n = 466) enrolled in 14 IDA programs. The study shows banked participants had $2.74 higher average monthly net deposit (p < 0.05); 5% higher deposit frequency (p < 0.001); and 42% less odds of drop out than unbanked participants (p < 0.001). Moreover, program characteristics such as financial education, monthly saving targets, peer group meetings, and direct deposit are important predictors of program performances. Individual characteristics such as race/ethnicity, home ownership, and income are significantly associated with program performance.     

Heterogeneous Effects of Child Development Accounts on Savings for Children’s Education

We examine effects of Child Development Accounts on savings for postsecondary education in a statewide experiment (N = 2,677), which automatically opened state-owned college savings accounts for treatment-group children, and encouraged their caregivers to open and save in participant-owned college savings accounts. The experiment achieves universal participation for children in the treatment group; almost all treatment-group children hold an account with more than $1,000 in college assets. Treatment participants we expect would hold their own participant-owned accounts without the intervention have $395 more in savings than their counterparts in the control group; those who are motivated by the intervention to hold a participant-owned account have mean deposits of $888. Those who are motivated by the intervention to save have mean deposits of $1,826. The intervention reduces the socioeconomic disparity in asset accumulation for children. The program has the potential to promote asset building for children’s education.     

TIMING IS MONEY: DOES LUMP‐SUM PAYMENT OF THE EARNED INCOME TAX CREDIT AFFECT SAVINGS AND DEBT?

Earned income tax credit (EITC) benefit income is paid out in a lump‐sum around tax time. We investigate whether savings and debt among EITC‐eligible families reflect the timing of payments. Using nationally representative, individual‐level data on self‐reported debt and savings outcomes, we search for differences in monthly behavior between EITC‐eligible and ‐ineligible households. We find evidence that credit card and unsecured debt holding among EITC‐eligible families reflects the timing of the EITC, with low debt levels at tax time relative to other months. Debt holding among ineligible families with children does not exhibit a similar pattern. We find limited evidence of intrayear patterns in savings behavior among EITC‐eligible families. (JEL D14, I38, H23)     

Decomposing the Black-White Wealth Gap: The Role of Parental Resources, Inheritance, and Investment Dynamics

Much research has shown that even after controlling for income, African Americans suffer from drastically lower net worths than their white counterparts; these differences in net worth have important implications for the overall well‐being of blacks and whites. If not directly from labor market disadvantages–i.e., income differentials–then from what does this racial gap in wealth arise? The current study assesses two complementary accounts of this race difference in asset holdings. The first, the historical legacy thesis, suggests that net wealth differences in the current generation are largely a result of discrimination in past generations; that is, they can be traced to the “head start” that whites have enjoyed in accumulating assets and passing them on. The second theory, the contemporary dynamics thesis, holds that current dynamics of institutional racism in the housing and credit markets are more responsible for the gap. The current study tests the relative impact of multi‐generational forces and contemporary property and credit dynamics by using two‐generational data from the Panel Study of Income Dynamics. It finds that parental wealth and income levels and inheritance all have a significant impact on the wealth levels of the current generation net of respondent socioeconomic characteristics; however, parental wealth and inheritance fail to explain the black‐white gap. Further, this study shows that even predicting net worth from that same family's net worth five years prior (also controlling for savings during the interim), there remains a significantly negative effect of African American race. However, breaking out initial net worth into asset types shows that it may be different investment types and returns that explain the difference in asset accumulation over a five‐year period.     

Gambling and the Older Chinese in Canada

In Canada, there is a lack of research on gambling among the older adults from ethnic minority groups, especially the older Chinese. In this study, two research questions were used to examine gambling among the older Chinese: (1) What is the pattern of gambling among the older Chinese in Canada? (2) What are the predictors associated with gambling among the older Chinese in Canada? The data for this study were collected as part of a multi-site study on health and well-being of 2272 older Chinese in Canada. Four main questions related to gambling were used in this study. Among the 2257 participants who answered the questions on gambling, 26.6% of them reported that they gambled. Results of the hierarchical logistic regression analysis showed that being male, having lived in Canada longer, having a higher level of social support, having more service barriers, and having a stronger level of Chinese ethnic identity would increase the probability for an older Chinese to participate in gambling. Conversely, having a post-secondary and above level of education and having a higher level of life satisfaction would reduce one’s probability of gambling. Although city of residency was also significant in predicting gambling, further analysis showed that its effect was actually caused by other factors including services barriers, social support, life satisfaction, Chinese ethnic identity, and education.     

A post-crisis assessment of retirement income adequacy for Baby Boomers and Gen Xers

DETERMINING THOSE "AT RISK" OF INSUFFICIENT RETIREMENT INCOME: The analysis in this paper was designed to answer two questions: 1) What percentage of U.S. households became "at risk" of insufficient retirement income as a result of the financial market and real estate crisis in 2008 and 2009? 2) Of those who are at risk, what additional savings do they need to make each year until retirement age to make up for their losses from the crisis? The results are from the 2010 EBRI Retirement Security Projection Model by the Employee Benefit Research Institute. KEY FINDINGS: Range at risk: The percentage of households that would not have been "at risk" without the 2008-2009 crisis but that ended up "at risk" varies from a low of 3.8 percent to a high of 14.3 percent. 50-50 chance of adequacy: Looking at all Early Boomer households that would need to save an additional amount (over and above the savings already factored into the baseline model), the median percentage of additional compensation for these households desiring a 50 percent probability of retirement income adequacy would be 3.0 percent of compensation each year until retirement age to account for the financial and housing market crisis in 2008 and 2009. 90 percent chance of adequacy: Looking at all Early Boomer households that would need to save an additional amount (over and above the savings already factored into the baseline model), the median percentage of additional compensation for these households desiring a 90 percent probability of retirement income adequacy would be 4.3 percent of compensation. Range of adequacy: Looking only at Early Boomer households that would need to save an additional amount (over and above the savings already factored into the baseline model), that had account balances in defined contribution plans and IRAs as well as exposure to the real estate crisis in 2008 and 2009 shows a median percentage for of 5.6 percent for a 50 percent probability and 6.7 percent for a 90 percent probability of retirement income adequacy.     

Is Communication a Mechanism of Relationship Education Effects Among Rural African Americans?

Enhancing communication as a means of promoting relationship quality has been increasingly questioned, particularly for couples at elevated sociodemographic risk. In response, the current study investigated communication change as a mechanism accounting for changes in relationship satisfaction and confidence among 344 rural, predominantly low‐income African American couples with an early adolescent child who participated in a randomized controlled trial of the Protecting Strong African American Families (ProSAAF) program. Approximately 9 months after baseline assessment, intent‐to‐treat analyses indicated that ProSAAF couples demonstrated improved communication, satisfaction, and confidence when compared with couples in the control condition. Improvements in communication mediated ProSAAF effects on relationship satisfaction and confidence; conversely, neither satisfaction nor confidence mediated intervention effects on changes in communication. These results underscore the short‐term efficacy of a communication‐focused, culturally sensitive prevention program and suggest that communication is a possible mechanism of change in relationship quality among low‐income African American couples.     

The impact of collectivism on savings behavior: a case study of Mexican-Americans and non-Mexican Latinos

This interdisciplinary study combines anthropological and economic theories and methods to understand how Mexican-Americans’ collectivist cultural values affect their savings behavior and their preparation for retirement. Mexican-Americans are the fastest growing immigrant group in the United States and they are both younger and expected to live longer than other groups. Yet they are the most insecure in relation to funding retirement. Even when Mexican-American workers are eligible to participate in retirement savings plans at work, they have low participation rates. We analyze data from a Chicago area survey in light of broader anthropological and economic scholarship to argue that Mexican-Americans’ collectivist values influence the choices they make about how to build assets and resources differently from other Latino groups. Latinos are a diverse group by national origin, citizenship and immigration status, characteristics that strongly influence their employment prospects, asset building and retirement savings and security. Financial policy makers need to understand the heterogeneity of financial behavior within the Hispanic community. The collectivist informal economy of Mexican immigrants and their children is at odds with the formal defined contribution retirement savings system, which is geared toward both autonomous individuals and higher-income workers who benefit from the program’s tax deductions. Since these plans penalize participants who withdraw funds before retirement age, they can be deleterious to those who expect both to loan funds to and to borrow money from members of their collectivist social networks.