The age old question, which comes first? A simultaneous test of children's savings and children's college-bound identity

This study has three goals: (1) to provide an extensive review of research on the assets/expectation relationship, (2) to provide a conceptual framework for how children's savings effects children's college-bound identity (children's college expectations are a proxy for children's college-bound identity), and (3) to conduct a simultaneous test of whether owning a savings account leads to college-bound identity or college-bound identity lead to owning a savings account using path analytic technique with Structural Equation Modeling (SEM). Our review reveals asset researchers theorize about college-bound identity in two distinct but compatible ways: college-bound identity as a “linking mechanism”, and college-bound identity as a mediator. However, there has been little theoretical development on the attitudinal effects of assets. In this study, we posit a conceptual framework for how children's savings affects children's college-bound identity. Findings from the simultaneous test of the assets/college-bound identity relationship suggest that savings has modest effect on college-bound identity and vice versa. A policy implication is that asset building policies that seek to build children's college-bound identity in addition to their savings may be more effective than policies that only seek to build children's savings.     

Parental Expectations and Educational Outcomes for Young African American Adults: Do Household Assets Matter?

African American children are more likely to be poor and live in households that are “asset poor,” with no or very little net worth. Using the Panel Study of Income Dynamics and its Child Development Supplement, this article explores whether living in a household with net worth above the sample median seems to promote educational success and the development of human capital over time, irrespective of income. Controlling for parental income and education, as well as gender, household wealth in the form of net worth was the best predictor of parental expectations, high school completion, and college enrollment for young African American adults. A brief discussion of possible asset-building policy options follows.     

Small-dollar children's saving accounts and children's college outcomes by race

This is paper three of four in the Small-Dollar Children Accounts series that studies the relationship between children's small dollar savings accounts and college enrollment and graduation. The series uses different subsamples to examine three important research questions: (a) Are children with savings of their own more likely to attend or graduate from college? (b) Does dosage (no account, only basic savings, savings designated for school of less than $1, $1 to $499, or $500 or more) matter? And (c) is designating for school more predictive of college enrollment or graduation than having basic undesignated savings alone? Using propensity score weighted data from the Panel Study of Income Dynamics and its supplements we created multi-treatment dosages of savings accounts and amounts to answer these questions separately for black (n = 404) and white (n = 453) children. White children's savings are not significantly related to their college outcomes. Differently, compared to black children without savings accounts, black children are three times more likely to enroll in college when they have school savings of less than $1 and six times more likely when they have school savings of $1 to $499. Further, black children with school savings of $1 to $499 are four times more likely to graduate from college and black children with school savings of $500 or more are three-and-a-half times more likely to graduate from college, compared to those with no savings account. We suggest Child Development Accounts (CDAs) may be a promising tool for helping black children get to and through college.     

Consolidated Measures of Activity among Older Adults: Results of a Three Data Set Comparison

This study explores the potential to consolidate a broad range of activity items to create more manageable measures that could be used in statistical modeling of multi-activity engagement. We utilized three datasets in the United States: Panel Study of Income Dynamics, Health and Retirement Study, and Midlife in the United States. After identifying activity items, exploratory and confirmatory factor analysis were used to empirically explore composite activity measures. Findings suggest that discrete activity items can be consolidated into activity domains; however, activity domains differ across datasets depending on availability of activity items. Implications for research and practice are further discussed.     

Explicit Versus Implicit Income Insurance

By supplementing income explicitly through payments or implicitly through taxes collected, income-based taxes and transfers make disposable income less variable. Because disposable income determines consumption, policies that smooth disposable income also create welfare improving consumption insurance. With data from the Panel Study of Income Dynamics we find that annual consumption variation is reduced by almost 20 percent due to explicit and implicit income smoothing. Consumption insurance is as important economically as private health or automobile insurance. Although taxes have become an increasingly important source of consumption insurance, the 2001 income-tax reform legislation should have little effect on implicit consumption insurance.     

Moving Out: Transition to Nonresidence Among Resident Fathers in the United States, 1968–1997

This article provides the first individual‐level estimates of the change over time in the probability of nonresidence for initially resident fathers in the United States. Drawing on the 1968–1997 waves of the Panel Study of Income Dynamics, we used discrete‐time event history models to compute the probabilities of nonresidence for six 5‐year periods. Our sample consists of men (N = 1,388) who are coresident with their biological children at the time of birth. We found that the observed probability of nonresidence doubled over the three decades of the study period, but not linearly. The risk increased substantially in the 1980s and then stabilized in the 1990s. Our multivariate models show that the stabilization was due to changes over time in characteristics such as income; had these remained constant, the likelihood of nonresidence would have increased throughout the study period. Both fathers’ and mothers’ incomes reduce the likelihood of paternal nonresidence, as do mothers’ employment hours.     

Probability of living through a period of economic instability

Welfare Based on Assets, a Way to Smooth Out Economic Instability and Develop Children's Human Capital is a four-part series of reports that focuses on the relationship between economic instability (i.e., income shocks, asset shocks, home loss, and asset poverty) and children's human capital development. Collectively, these reports build on the compelling observation that the pattern low-income families walk into is a present time oriented or consumption based pattern of behavior; in contrast, the pattern higher income families walk into is future oriented or asset based. In this first paper we find that between 2005 and 2009 the probability of a low-income child living through an income shock is between 43% (major shock) and 55% (minor shock). In contrast, the chance of a high-income child experiencing an income shock is between 6% (major shock) and 15% (minor shock) during the same period. We also find that the probability that a child will experience a net worth asset shock close to doubles for a child living in a black or low-income family between 2005 and 2009 when compared to 2000 and 2004. Policy implications are discussed.     

Small-dollar children's savings accounts and children's college outcomes

This is paper one of four in the small-dollar children's savings account series, which, studies the relationship between children's small-dollar savings accounts and college enrollment and graduation. This series of papers uses different subsamples to examine three important research questions: (a) are children with savings of their own more likely to attend or graduate from college? (b) does dose (i.e., having no account, only basic savings, savings designated for school [of less than $1, $1 to $499, or $500 or more]) matter? and (c) is having savings designated for school more predictive than having basic savings alone? Paper one of this series uses aggregate data from the newest wave of the Panel Study of Income Dynamics (PSID) and its supplements. Propensity score weighted findings suggest that children who have a small amount of money (e.g., less than $1 or $1 to $499) designated for school are 3 times and 2.5 times more likely, respectively, to enroll in and graduate from college, respectively, than children with no account. Findings also show that having savings designated for school might have a stronger effect on relationship with children's college outcomes than having basic savings that can be used for any purpose. The paper concludes by explaining how policies that create national children's savings programs might help cue a psychological process in which children form an identities as college-savers.     

Re-evaluating gender differences in self-rated health: The importance of cohort

Research examining gender differences in self-rated health (SRH) has typically not distinguished between age and cohort-related changes in the health of men and women over time. Using longitudinal data from the Panel Study of Income Dynamics, this study finds gender diffegrences in SRH may actually be an artifact of cohort. Prior to examining health across cohorts, women reported worse health than men. With the introduction of cohort to the models, no gender difference was found except in the earliest cohort (born 1924–1933). Historical context is therefore critical to understanding the health trajectories of women and men, which are not uniform across cohorts.     

A multi-group structural equation model (SEM) examining asset holding effects on educational attainment by race and gender

Little is known about the processes through which parents' and children's wealth may influence children's math and reading scores. Even less is known about how these processes may vary across race and gender. In this study we analyze Panel Study of Income Dynamics (PSID) data using multi-group structural equation modeling (SEM) to examine wealth effects by gender (male/female) and race (white/black). Results suggest that there are important statistical differences across race and gender. For example, we find that children's school savings predict math scores among white children but not black children. Net worth is a positive predictor of black males' math scores but a negative predictor of black females'. In the case of income, we find that it is directly related to black females' math scores but not black males'. In general, findings suggest that liquid forms of wealth (i.e., forms of wealth that are easily converted into cash) may be better predictors of children's academic achievement than net worth.