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Material hardship and 529 college savings plan participation: the mitigating effects of Child Development Accounts

Wikoff, Nora; Huang, Jin; Kim, Youngmi; Sherraden, Michael

Authors

NORA WIKOFF NORA.WIKOFF@NOTTINGHAM.AC.UK
Assistant Professor in Quantitative Methods

Jin Huang jhuang5@slu.edu

Youngmi Kim ykim@vcu.edu

Michael Sherraden sherrad@wustl.edu



Abstract

Experience of material hardship can adversely affect a family’s ability to make long-term investments in children’s development. We examine whether material hardship is associated with one indicator of such investments: participation in a tax-advantaged college savings plan (529 plan). Data for this study come from the SEED for Oklahoma Kids (SEED OK) experiment, an intervention that offers Child Development Accounts with financial incentives to encourage the accumulation of college savings for children from the time of their birth. Results show that material hardship is negatively associated with 529-plan participation, and this association varies by treatment status. At all levels of material hardship, treatment-group mothers are more likely to hold accounts than control-group mothers. These findings suggest that CDAs can be a useful policy tool to support families’ financial preparation for college.

Journal Article Type Article
Publication Date Mar 31, 2015
Journal Social Science Research
Print ISSN 0049-089X
Electronic ISSN 1096-0317
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 50
APA6 Citation Wikoff, N., Huang, J., Kim, Y., & Sherraden, M. (2015). Material hardship and 529 college savings plan participation: the mitigating effects of Child Development Accounts. Social Science Research, 50, doi:10.1016/j.ssresearch.2014.11.017
DOI https://doi.org/10.1016/j.ssresearch.2014.11.017
Keywords Assets, Child Development Accounts, College savings, Economic resources, Economic well-being, Material hardship
Publisher URL http://www.sciencedirect.com/science/article/pii/S0049089X14002233
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf
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