69 research outputs found
The Financial Capability and Financial Well-Being of Low-Income Entrepreneurs
Entrepreneurship can offer a path out of poverty, but do low-income entrepreneurs have the knowledge and resources they need to succeed?
Reporting on analyses of data from the Consumer Financial Protection Bureau’s 2016 National Financial Well-Being Survey, this brief suggests that many would-be entrepreneurs turn to alternative financial products in lieu of mainstream options and could benefit from comprehensive financial guidance designed to bolster financial capability
Building Financial Capability and Assets for Disadvantaged Entrepreneurs
Low wages and material need motivates many to supplement income through entrepreneurship, and policymakers intervened to support such efforts in the COVID-19 economy. What lessons can these supports offer for ongoing efforts to support disadvantaged entrepreneurs? Using data from the 2018 National Financial Capability Study, this brief examines the income volatility and emergency savings of disadvantaged entrepreneurs. The findings suggest the potential of long-term policy mechanisms to improve financial security
Household Assets and Health in China: Evidence and Policy Implications
China’s health care reform of the 1990s has not yielded much success. The market-oriented health system has resulted in declines in fairness of health services and efficiency of investment in the health sector. Further health care reform will be required. Among many options, asset-based policy has demonstrated some potential in domestic policy development. To provide evidence to inform health policy development in China, this study focuses on effects of household assets on health in China. Specifically, the current study examines how household assets may affect health status and how assets differ from income in predicting health status. Using a random sample of Chinese elderly, we find that asset holding in the form of household durables and household utilities has both direct and indirect effects on health status. Household assets directly affect access to medical care and indirectly affect health by influencing health behavior and psychological condition. In other words, in addition to economic effects, household assets appear to have behavioral and psychological effects on health. Interestingly, these effects appear to be associated with assets, but not with income. Implications for asset-building policy are suggested as a complement to existing health care models
Food Insecurity and Disability: Do Economic Resources Matter?
This research examines the relationship between work disability and food insecurity, and tests whether the positive association between disability and food insecurity is accounted for by two mechanisms: economic resources and/or competing consumption needs. a sample (N=6,997) is chosen from the 1999 Panel Study of Income Dynamics (PSID) with over 1,200 households headed by people with disabilities. Findings support both mechanisms but depending on the levels of food insecurity and the types of family economic resources, their success at explaining the relationship of disability with food insecurity varies. In addition, we find that household assets are more effective than income in protecting people with disabilities against food insecurity. Implications for disability policy and food assistance programs are discussed
SEED Deposit, Match Cap, and Net Savings Patterns: An Assessment of Institutional Incentives in the I Can Save Program
Incentive structures are key to the success of asset-building programs. a review of the existing literature reveals a lack of knowledge regarding the time dimension of incentive structures embedded in the asset-building programs. It is not clear how saving performance may change even when institutional settings stay the same over time. Using cash flow data from I Can Save, a small-scale Child Development Account demonstration project, this study closely examines how two institutional components, seed deposit and match cap, affect net savings over the four-year observation period. Results from the descriptive and multivariate analyses show that saving performance is a function of time in response to the institutional incentives, namely, seed deposit and match cap. The findings suggest that the effects of asset building programs can be time dependent, and the temporal aspect of program effects may have important implications for developing effective asset-building programs
Asset-Based Policy in Rural China: An Innovation in the Retirement Social Insurance Program
In response to the growing rural-urban inequality, China is undertaking a series of policy initiatives to promote rural development. In addition to redistributive policies aiming at social protection, asset-based policy, which integrates social protection and social investment, is another viable option for progressive rural development. In 1998, the Hutubi local government in the Xinjiang Uygur Autonomous Region of China implemented an innovative retirement program which allows account holders to use accounts as legal collateral to borrow small loans and invest in productive assets such as farming supplies and equipment, education, and small businesses. Using the data gathered by the program and in-depth interviews with program participants, this case study closely examines the Hutubi Program. Strengths and limitations of the loan program are discussed, followed by a closer look at the program’s key features that have effectively encouraged asset building in a rural community. The success of the Hutubi Program has implications for asset-based policy development in rural China
Parental Income, Assets, and Borrowing Constraints and Children\u27s Post-Secondary Education
This study is a test of two theoretical models linking parental economic resources to children’s post-secondary education, namely, short-term borrowing constraints and long-term family background. a series of structural equation models (SEM) are tested using data from a sample of young adults (N=650) in the Panel Study of Income Dynamics (PSID). To further understand the role of parental resources in children’s education, analyses are conducted for both income and assets, with assets measured by liquid assets and net worth. Findings indicate that both income and assets have consistent long-term associations with children’s college entry. When measures of household wealth are incorporated in the analysis, the hypothesis of short-term borrowing constraints is also supported. Implications for research and policy are discussed
Dual Incentives and Dual Asset Building: The Hutubi Rural Social Security Loan Program in China
The Hutubi Rural Social Security Loan program is a policy innovation in a rural area of China by loaning savings in social security accounts back to peasants for them to purchase assets for agricultural and other development. In contrast to the nationwide recession in rural social security, this program has shown its success in proliferating rural social security funds and retaining social security participants. With a focus on the administrative data of the loan program, this study aims to provide an in-depth understanding of the loan program and examine how asset building is possible for the poor when institutional incentives are offered. The findings show that when proper policy incentives are provided, poor peasants can build assets. The Hutubi program may be a good model for other rural areas in China and other developing countries
Financial Capability in Children: Effects of Participation in a School-Based Financial Education and Savings Program
A groundswell of interest in young people’s ability to understand and handle financial decisions has generated keen interest in financial knowledge and effectiveness of financial education. This study examines an innovative four-year school-based financial education and savings program, called “I Can Save” (ICS). Using a quasi-experimental design, the study examines quantitative and qualitative data to analyze program effects on financial knowledge. Children who participated in ICS scored significantly higher on a financial literacy test than comparison group students in the same school, regardless of parent education and income. Results suggest that children increase financial capability when they have access to financial education and it is accompanied by participation in meaningful financial services
Young Children\u27s Perceptions of College and Saving: Potential Role of Child Development Accounts
This paper explores young children\u27s perceptions and expectations about attending college, and the potential influence of a savings program on shaping children\u27s perceptions about paying for college. As part of a four-year study of a school-based college savings program called “I Can Save”, this paper uses qualitative evidence from interviews conducted in second and fourth grades with a diverse group of 51 children. Findings suggest that most of the children in the study have a general understanding of college and have begun a process of considering higher education. Further, children in “I Can Save” are more likely than a comparison group of children to perceive that savings is a way to help pay for college
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