From pre-school to college enrollment: Long term outcomes from MI-SEED

• In Event: Designing Early Wealth-Building Policy for Equity, Scale, and Impact

Abstract

Envisioned as a way to improve well-being through financial stability, child savings accounts (CSAs) have been linked to important educational outcomes for children, including the adoption of a “college-bound” identity. Much of the US-specific research on CSAs started with the Saving for Education, Entrepreneurship, and Downpayment (SEED) initiative that implemented CSAs in 12 sites across the country and eventually launched an experimental design in Oklahoma (SEED OK). In 2004, the MI-SEED program was designed as a quasi-experimental comparison of seven treatment and seven control Head Start centers. Caregivers with children enrolled in treatment Head Start centers were offered a CSA with an initial $800 deposit, matched by a $200 state deposit, and were also encouraged to take advantage of a 1-to-1 match for additional personal savings, up to maximum of $1,200. Importantly, a comparison group of parents and children were recruited from these same Head Start centers. The comparison group did not receive financial education and counseling, but in some instances did choose to open CSAs independent of this study. Educational outcomes for youth in the treatment and comparison groups were tracked beginning in 2008 and continuing through high school graduation and post-secondary enrollment. If possession of a CSA improves college-bound identity, then we expected to see it in high school-level assessments and eventual post-secondary enrollment. Using 11th grade M-STEP results for 273 MI-SEED participants, we observe that among high school graduates CSA account holders were significantly more likely to be proficient in social studies than non-account holders (Χ=6.9, p=.008). CSA account holders were also percentage-wise more likely to be proficient in science (20%) than non-account holders (15.1%), but this difference was not significant. Higher assessment scores may be an indicator of a “college-bound” identity, which we then observed in the likelihood of enrolling in post-secondary education. Examining 2020 state education data, CSA account holders were significantly more likely to enroll in post-secondary education than non-account holders (Χ=4.2, p=.039). Our results suggest that providing youth CSAs at a young age, seeding this with an initial deposit, and encouraging families to use this financial instrument, may help shape their later adolescent identity, as not only youth who see themselves as going to college, but perform as such as well.

Author

• Trina R Shanks, University of Michigan Ann Arbor
  Presenting Author