Early savings for children's higher education: A comparison between savers and non-savers in a Child Development Account program ☆ David Okech a, ⁎, Todd D. Little b , Trina Williams-Shanks c a School of Social Work, University of Georgia, GA, USA b Director of Center for Research Methods and Data Analysis, University of Kansas, KS, USA c University of Michigan School of Social Work, MI, USA abstract article info Article history: Received 3 December 2010 Accepted 30 March 2011 Available online 3 April 2011 Keywords: Accounts Children Development Savings Services This study examined economic pressure, parenting stress, and personal mastery factors among N = 235 lower income parents who had the opportunity to save for their children's future higher education in a children's development account program. Bivariate analyses and structural equation modeling (SEM) were used to test the differences between early savers and non-savers. There were some sociodemographic differences between the groups; however, the overall SEM was invariant between the groups. Data suggest that specific case management services may be critical to help lower-income parents save for their children. Further research needs to identify institutional aspects and household characteristics that explain saving among this poorer households. Published by Elsevier Ltd. 1. Introduction Saving for children's college education is a profound challenge for most households in the United States. In nearly all countries, college education is one of the greatest vehicles for upward social mobility. Compared to their counterparts from higher income households, children from lower income households are less likely to have funds to pay for their college education. According to the National Center for Education Statistics, only 44% of U.S. children in the lowest income quintile were able to enroll in college compared to 80% of those in the upper quintile (NCES, 2003). If future income and asset gaps are to be reduced and social mobility enhanced for children from lower income households, then ensuring that these children have resources to attain a college education is an important task for parents and society at large. Initiatives designed to help lower income families save and build assets for developmental uses such as higher education, homeowner- ship and entrepreneurship have been implemented in a number of countries. Many of these follow Sherraden's (1991) groundbreaking proposal for a system of universal savings accounts (opened at birth) with progressive funding. Asset building accounts for children and youth are frequently known as Child Development Accounts (CDAs), and can be either universal or targeted to children from lower income households or communities. CDAs may be established by govern- ments or private institutions for children to provide structure and support for their parents to build assets for their higher education, home purchases, or starting small businesses. Such accounts often start with an initial deposit from a private or public funding source, are eligible for matching funds, managed by a financial institution, sheltered from means-testing, and are tax benefited. Typically, youth are able to access such accounts at 18 years of age (Locke & Sherraden, 2006). Furthermore, since one of the primary uses of CDAs is to fund post-secondary education, Rist, Brooks and Keeley (2005) pointed out that CDAs must minimize the negative consequences of account ownership on college financial aid eligibility for asset-poor households. Another term assigned to such accounts is child savings accounts, although in this paper, we used CDAs. The study presented herein is part of a national policy, practice and research demonstration of CDAs currently underway in the United States. This demonstration is known as Saving for Education, Entrepre- neurship, and Downpayment (SEED). The SEED research design involves multiple methods, one of which is a quasi-experimental demonstration and impact assessment site at a large community-based agency in Michigan (Adams, 2008; Adams, Williams Shanks & Marks, 2008). As part of the larger SEED demonstration project, this study builds on other empirical work demonstrating how the institutional theory saving actually works with poor families who save specifically for younger-aged children. Its objectives were to: 1) compare character- istics of parents who made early deposits into CDAs for their pre- school children, with peers who did not make such deposits, and 2) Children and Youth Services Review 33 (2011) 1592–1598 ☆ We thank Professors Michael Holosko and Thomas Holland of the University of Georgia School of Social Work for their support with this manuscript and Dr. Sondra G. Beverly for reading and providing helpful hints in framing the manuscript. ⁎ Corresponding author. Tel.: + 1 706 542 5431; fax: + 1 706 542 3282. E-mail address: dokech@uga.edu (D. Okech). 0190-7409/$ – see front matter. Published by Elsevier Ltd. doi:10.1016/j.childyouth.2011.03.025 Contents lists available at ScienceDirect Children and Youth Services Review journal homepage: www.elsevier.com/locate/childyouth