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Objective: This article summarizes the design, implementation, and early findings of a statewide randomized experiment of Child Development Accounts (CDAs). The SEED for Oklahoma Kids experiment (SEED OK) is testing a concept for a universal, progressive asset-building policy with potential for national application. CDAs can start as early as birth, providing structured opportunities (e.g., financial access, information, incentives) to encourage asset accumulation for postsecondary education and other developmental purposes. Theory and evidence suggest that CDAs can improve educational outcomes, especially among disadvantaged youth. Method: Participating in a rigorous randomized controlled design, primary caregivers of children born in Oklahoma in 2007 completed a baseline telephone survey before random assignment to the treatment group (n = 1,358) or control group (n = 1,346); these caregivers completed a follow-up survey 4 years later. For children in the treatment group, the SEED OK experiment automatically opened an Oklahoma 529 College Savings Plan (OK 529) account with a $1,000 initial deposit. In addition, low- and moderate-income families in the treatment group were eligible for a savings match for deposits to their own OK 529 accounts. Results: Findings indicate that CDAs can be implemented universally in a full population to increase the accumulation of college assets. The CDA in SEED OK greatly reduces disparities in OK 529 asset accumulation associated with socioeconomic characteristics. The CDA also has positive effects on parental educational expectations for children, maternal depressive symptoms, and children’s social-emotional development. Conclusions: In contrast to college savings programs that require parents to open an account, SEED OK’s universal, automatic, and progressive CDA model gives all children the opportunity to benefit from college-account and asset ownership.

Child Development Accounts (CDAs) are savings or investment accounts for long-term developmental goals, including postsecondary education and home purchase. Many proponents envision CDAs as universal (i.e., for all children), progressive (i.e., greatest subsidies for the poorest children), and lifelong. Under most proposals, the federal government would automatically open accounts for every child in the United States at birth, with an initial deposit made to each account. Contributions made to accounts of children from low-income households would receive matched funds from public and/or private sources; deposits by family members and others would be encouraged, and withdrawals for purposes other than specific developmental purposes would be discouraged (Sherraden, 1991, 2014; see also Cramer & Newville, 2009; Goldberg, 2005). The emphasis on universality and progressivity sets CDAs apart from Individual Retirement Accounts, 401(k) plans, and some 529 college savings plans.

Policies that support asset accumulation for low- and moderate-income families are important for a number of reasons. First, the value of family assets varies markedly by family income, and extreme inequality exists in this area. Data from the Survey of Consumer Finances have indicated that, in 2013, households in the lowest income quintile had a median net worth of about $6,400, whereas the fourth income quintile had median net worth of $161,300, and that figure was more than $1 million for those in the highest income decile. The median net worth of non-Hispanic White families ($142,000) was almost 8 times that of non-White or Hispanic families ($18,100; Bricker et al., 2014). In 2007, well more than half (68%) of families in the bottom income quintile did not have enough liquid assets to sustain themselves at the federal poverty level for 3 months (Ratcliffe & Vinopal, 2009). In 2009, almost one-fourth of Hispanic and African American households had no assets except for a vehicle, whereas the same was true for only 6% of White households (Kochhar, Fry, & Taylor, 2011).

The scarcity of financial assets in low-income families and some families of color is problematic because assets can protect families from crises if financial shocks occur. Assets also enable families to take advantage of opportunities that they cannot afford to finance out of regular income. Moreover, assets can shape attitudes; for example, some have argued that having assets can cause people to have hope, future orientation, and self-efficacy (Sherraden, 1991; Shobe & Page-Adams, 2001). These attitudinal changes can lead to behavioral changes that ultimately improve outcomes for children. A large body of evidence has shown that, as compared with other children, children in families with assets and children whose parents are homeowners have more positive outcomes. Research has also shown that assets improve child outcomes, in part, by increasing parents’ expectations for their children’s educational attainment (Grinstein-Weiss, Williams Shanks, & Beverly, 2014). Certainly, attitudes shape asset ownership as well. In one simultaneous test, assets not only influenced but were also influenced by attitudes and behaviors (Yadama & Sherraden, 1996). Qualitative research has shown that assets have meaning and exert influence beyond the value of the goods and services they can purchase, and that they could even be “transformative” (Shapiro, 2004, p. 2; see also Edin, 2001).

Sherraden and others have observed that much asset accumulation occurs because policies facilitate and subsidize saving and asset accumulation, not necessarily because individuals actively save (Sherraden, 1991, 2014; see also Beverly et al., 2008). Many middle- and upper-income families benefit from tax deductions for contributions to retirement plans and for home mortgage interest payments. Workers in “good” jobs (i.e., those with employer sponsored programs that facilitate saving) often qualify for employer matches on the workers’ contributions to their workplace retirement program, or workers can arrange for payroll deduction to make saving automatic. However, tax-preferred saving vehicles benefit few lower-income families because these families do not have income-tax liability, and the employers of many low-income workers do not subsidize or facilitate saving. One recent study estimated that 84% of federal expenditures on employer-based retirement savings plans and individual retirement accounts go to taxpayers in the two highest income quintiles, whereas taxpayers in the lowest income quintile receive less than 1% (Steuerle, Harris, McKernan, Quakenbush, & Ratcliffe, 2014). Moreover, the asset tests used to determine eligibility for many public benefit programs penalize saving by low-income families (see, e.g., Nam, Ratcliffe, & McKernan, 2008).

Several research and policy demonstrations—led in large part by social workers—have emanated from the desire to distribute public resources more equitably and to give all families the opportunity to benefit from asset accumulation. These demonstrations study and ultimately inform programs and policies that help low-income families accumulate assets. In recent years, particular support has grown for initiatives that build assets through CDAs. CDA programs have been created in Singapore, Canada, the United Kingdom, and several other countries (Loke & Sherraden, 2009). In the United States, CDA programs have been established in Maine, Nevada, Connecticut, and Rhode Island, as well as in localities such as San Francisco, CA, and Wabash County, IN.

Thus far, most CDA initiatives have emphasized saving for postsecondary education and vocational training. A key supposition of the initiatives is that having CDAs increases the likelihood of college attendance and completion by raising the educational expectations of youth and their parents, and thereby, increasing engagement and investment in education (Beverly, Elliott, & Sherraden, 2013; Elliott, Choi, Destin, & Kim, 2011). If CDAs generally make parents more hopeful about their children’s future, then CDAs might also increase parental well-being, motivate parents to make investments in their children, and improve parent–child interaction. All of these effects could improve child development outcomes.

The impacts of CDAs are likely to be stronger when CDA asset levels are higher. However, regardless of the amount of money in the account, CDAs can positively influence attitudes and behaviors, even when the account is opened automatically and children receive automatic deposits. As Beverly et al. (2013) argued, the existence of a program that provides college accounts and assets clearly communicates that college is important and that youth are expected to go to college; this message might be especially effective if the federal government were to automatically open and contribute to a CDA for every child. In addition, a college savings account makes saving easier because families have a designated place to save for college whenever they are able and motivated to save. Dedicating funds for postsecondary education might make the goal of a college education more salient, and account statements could serve as regular reminders of the importance of saving for education (Gray, Clancy, Sherraden, Wagner, & Miller-Cribbs, 2012). We believe that having a college savings account and assets for college are desirable policy objectives, even if families do not “do” anything to receive these benefits. Automatic CDAs with automatic deposits might have particularly strong effects on low-income families, which otherwise might view college as unaffordable and unattainable.

This article discusses the design, implementation, and early findings of a large randomized CDA experiment. SEED for Oklahoma Kids (SEED OK) began in 2007 as a large-scale policy test of universal, automatic, and progressive CDAs in a full population (Mason, Nam, Clancy, & Sherraden, 2014; Zager, Kim, Nam, Clancy, & Sherraden, 2010). SEED OK is the first test in the United States of Sherraden’s policy concept for universal, progressive, and potentially lifelong accounts that start as early as birth (Sherraden, 1991; Sherraden & Clancy, 2005). The experiment was motivated by three primary questions. First, can a universal policy of asset-building accounts be successfully implemented? That is, can accounts be opened for and held by all or nearly all in the target population? Second, can CDAs promote asset accumulation for children? Third, can CDAs affect the attitudes and behaviors of parents and children, influencing their subsequent cognitive, behavioral, and educational outcomes?

The SEED OK experiment is a partnership of the state of Oklahoma (Treasurer’s Office, Department of Health, Department of Human Services, Tax Commission, and Oklahoma 529 College Savings Plan), the Center for Social Development at Washington University in St. Louis, and RTI International. The SEED OK experiment was approved by the institutional review boards of all participating organizations.

Research Design and Methods

Sampling and Random Assignment

The sampling frame for SEED OK consisted of the birth records for all children born in Oklahoma in April through June and in August through October of 2007. (The second sampling period was necessary because the response rate in the first period was lower than expected.) Researchers oversampled African American, American Indian, and Hispanic infants, identifying 7,115 infants in total. The caregivers of 2,704 infants (SEED OK children) agreed to participate in the study and completed baseline interviews by telephone (response rate of 38%). Study participants were located by a survey research firm, provided their child’s Social Security number (required for the SEED OK account), and completed the telephone survey. Thus, the study participants differ from nonparticipants. To assess the extent of bias from caregiver self-selection into participation, Nam, Kim, Clancy, Zager, and Sherraden (2013) compared the birth records of participants’ children with the records of nonparticipants’ children. These records include information on the caregivers, enabling a direct comparison. Participants and nonparticipants were similar on most available variables, and the remaining differences were small. Weight variables were created to adjust for oversampling of minority groups and observed participation bias (Marks, Rhodes, & Scheffler, 2008). However, if participants differed systematically from nonparticipants in ways not captured by birth records, postsurvey adjustment with weight variables might not have eliminated bias due to selection into the study. Self-selection affects external validity but not the comparisons between treatment and control groups—that is, the impact analysis.

After study participants completed the baseline survey, the caregivers (and their infants) were randomly assigned to either the treatment or control group. For simplicity, we refer to all study participants as mothers, even though the sample included one father and five nonparents. Children in the treatment group (n = 1,358) received the CDA in SEED OK, and children in the control group (n = 1,346) did not. The use of random assignment enables researchers to attribute differences in outcomes to the CDA rather than to individual characteristics. Statistical analyses using chi-square tests (for categorical variables) and F tests (for continuous variables) showed that the baseline socioeconomic characteristics of the treatment group did not differ significantly from those of the control group (Kim & Nam, 2009). This finding indicated that random assignment created two comparable groups (see Table 1). Notably, both random assignment to treatment and control groups and sampling from a full state population are uncommon practices in social research, and these study elements make SEED OK an unusually rigorous policy test.

Table 1. 

Baseline Sample Characteristics by Treatment Status (N = 2,704)

 Treatment (n = 1,358) Control (n = 1,346)
Characteristicn%Weighted % n%Weighted %
SEED OK caregivers       
 Married76756.559.2 74555.460.7
  Below high school33424.623.8 33825.122.6
  High school42331.233.4 44433.034.4
  Some college34025.022.7 34325.525.5
  4-year college or above26019.220.1 21916.317.5
  Missing1.1.1 2.2.2
 Employed60944.944.5 61145.446.5
SEED OK children       
 Male72053.053.6 71553.152.5
  Non-Hispanic White63346.665.5 59043.865.1
  African American22716.79.0 24516.79.0
  American Indian25318.711.4 26619.811.4
  Asian151.11.3 11.81.4
  Hispanic23016.913.0 23417.413.1
Household characteristics       
 Number of children       
  143031.733.7 45734.037.0
  247234.833.7 45233.633.1
  3 or more43432.031.0 42131.328.9
  Missing221.61.7 161.2.9
 Homeownership (yes)52338.542.0 51138.041.9
 Welfare participation (yes)59443.740.3 59944.541.4
  <200%92568.165.7 94069.866.3
  200–400%23817.518.2 22316.618.0
  >400%13810.212.4 13410.013.1
  Missing574.23.8 493.62.7
 Mean (SD)Weighted Mean (SD) Mean (SD)Weighted Mean (SD)
Age of SEED OK caregivers (years)25.6 (5.6)25.6 (5.5) 25.5 (5.5)25.6 (5.6)
Age of SEED OK children (months)54.5 (2.2)54.0 (2.2) 54.6 (2.3)54.0 (2.3)
Household size4.2 (1.2)4.2 (1.2) 4.2 (1.2)4.1 (1.2)

NoteSEED OK = SEED for Oklahoma Kids. No treatment–control difference is significant at the .05 level. Participants completed the baseline survey between late 2007 and early 2008.

a Relative to 2007 federal poverty line.

View Table Image


The CDA in the SEED OK experiment was built on the existing Oklahoma 529 College Savings Plan (OK 529). Similar to other 529 plans, the OK 529 was created to encourage families to save for postsecondary education. The plan offers a small selection of funds with varying levels of risk. Contributions up to $10,000 per year (or $20,000 for married couples filing jointly) can be deducted from state income taxes, and qualified withdrawals are exempt from federal and state taxes.

As shown in Figure 1, the CDA in SEED OK involves two types of OK 529 accounts: (a) accounts opened automatically for SEED OK treatment children and (b) accounts that mothers (treatment or control) could open for their children. Unless a treatment-group mother opted out (which occurred in one case for religious reasons), every child in the treatment group received an OK 529 account automatically opened with an initial deposit of $1,000. (For simplicity, we say that a child holds or owns an account if she or he is the beneficiary.) We call these automatically opened OK 529 accounts SEED OK accounts, and these accounts hold deposits and incentives provided as part of the SEED OK CDA. Funds in these accounts are to be used for children’s postsecondary education expenses. For each calendar quarter, the OK 529 sends an account statement for SEED OK accounts to each treatment child.

Figure 1. 
Figure 1. 

SEED for Oklahoma Kids experimental design.

The second type of account can be opened by mothers for SEED OK children. These individual OK 529 accounts hold savings set aside by family and friends. For administrative reasons discussed by Nam et al. (2013), deposits made by individuals are kept separate from most deposits made by SEED OK. The ideal CDA program would automatically open a single account to hold public, private, and individual contributions, so parents would not need to open individual accounts; however, this ideal was not possible in SEED OK. To encourage treatment mothers to open their own OK 529 accounts for their infants, the CDA in SEED OK offered a time-limited $100 account-opening incentive. The OK 529 requires a minimum initial deposit of $100. Because this requirement could have prevented some mothers from opening accounts, SEED OK deposited the required $100 initial contribution for treatment participants who opened an OK 529 account for a SEED OK child by April 15, 2009. Treatment participants who opened accounts after that date had to provide the initial deposit themselves.

For about 4 years, low- and moderate-income treatment families with individual OK 529 accounts were eligible for 1:1 or 0.5:1 matches on their contributions to these OK 529 accounts. Households with an annual adjusted gross income less than 150% of the estimated median in Oklahoma ($29,000) were offered a 1:1 match: Every dollar deposited was matched with one dollar, up to $250 per calendar year. Households with an adjusted gross income between 100% and 150% of the state median (between $29,000 and $43,499) were eligible for a 0.5:1 match: Every dollar deposited was matched with 50 cents, up to $125. The state determined savings-match eligibility through official state records, so parents did not have to submit tax returns or self-certify their adjusted gross income (Zager et al., 2010).

Mothers in the treatment group received letters, postcards, and brochures that described both types of OK 529 accounts, introduced SEED OK financial incentives, and communicated messages about the importance of education. Mothers occasionally received small gifts (e.g., storybooks or educational music compact discs) for treatment children. The Oklahoma state treasurer’s office sent the mailings on behalf of SEED OK researchers. (Communications with treatment families are summarized in Gray et al., 2012, Appendix A.) SEED OK materials were provided almost exclusively by mail because the intent was to reach treatment families without exposing the control group to any aspect of the treatment. Distributing SEED OK information by mail probably suppressed participation. For example, mothers who moved during the experiment might not have received all communications, and some mother might not have read or understood the written materials (Gray et al., 2012). A universal CDA policy implemented statewide or nationally could use multiple media outlets (e.g., television and the Internet) and multiple messengers (e.g., public officials, social workers, and businesses) to encourage people to save for college.

In sum, the SEED OK experiment gave treatment children an automatically opened OK 529 account with an automatic $1,000 initial deposit, and gave treatment mothers information about the OK 529 and financial incentives to open and save in an OK 529 account for their young children. These components together make up the CDA in SEED OK. This CDA has many of the characteristics recommended by CDA proponents: automatic account opening and initial deposits, restrictions on the use of funds, and progressive matches. A centralized savings platform—a 529 college savings plan, in this case—facilitates the use of these CDA features (Clancy, Sherraden, & Beverly, 2015).

Although individual OK 529 accounts are publicly accessible through the state’s plan, mothers in the control group did not receive any information from SEED OK about OK 529 accounts and were not offered any SEED OK financial incentives. Children in the control group were not eligible for the automatic SEED OK account with initial deposit.

Sources of Data and Methods of Analysis

As noted above, 2,704 mothers completed the SEED OK baseline survey between fall 2007 and spring 2008, soon after their children were born. In the spring of 2011, when children were about 4 years old, 2,272 (84%) of these mothers completed a follow-up telephone survey. In addition, 60 mothers completed face-to-face semistructured interviews when their children were between 2 and 3 years old (between mid-2009 and late 2010; Gray et al., 2012). These mothers (40 from the treatment group and 20 from the control group) were recruited from 295 SEED OK mothers in a subsample randomly extracted from the mothers who completed the baseline survey, after researchers stratified the sample by race in order to oversample non-Whites (Gray et al., 2012). In addition to survey and interview data, SEED OK has data from children’s birth records and receives quarterly account data for all OK 529 accounts with SEED OK children as beneficiaries. Because the account data are transmitted directly from the OK 529 program manager, TIAA-CREF, the quality and reliability of these data are high.

Most analyses summarized in this article use weighted data. As noted above, these weights adjust for oversampling of minority groups and observed participation bias. In analyses that used data from the follow-up survey, weights also adjust for sample attrition (Schreiner, 2012). Unless otherwise noted, the results of all statistical tests reported in this article are significant at the .05 level or lower.

Summary of Early SEED OK Findings

Several studies from SEED OK have examined savings outcomes (e.g., OK 529 account holding, savings, and asset accumulation). Other studies have begun to investigate whether the CDA in SEED OK affects parental attitudes and child development. These studies used data collected when the children were younger than 5 years old, and some used data collected when the children were younger than 2 years old. Thus, the results highlighted here are short-term findings. In future studies of SEED OK, researchers will measure the impact of the CDA on longer term financial, cognitive, and educational outcomes.

Impact on Accounts, Assets, and Savings for Children’s Postsecondary Education

Any OK 529 account holding and total OK 529 assets

We begin by examining findings related to the holding of any OK 529 account and total OK 529 assets (see Table 2). The measure of account holding included the automatically opened SEED OK accounts (for treatment children) as well as individual OK 529 accounts (available to treatment and control children). The measure of total OK 529 assets included the value of individual deposits to OK 529 accounts and, for treatment children, the value of the initial $1,000 deposit into SEED OK accounts, the account-opening deposit incentive, and match money. The amount of total OK 529 assets was the sum of all deposits less withdrawals, excluding investment earnings (i.e., interest and market gains/losses). These measures do not include accounts and assets outside of the OK 529, and researchers did not examine the effect of the CDA on net worth. For treatment children, account holding and the value of assets are closely linked to the intervention, but this link does not diminish the importance of these outcomes. The outcomes described here were observed after the intervention and are expected to influence parental attitudes and behaviors, and eventually, children’s attitudes, behaviors, and educational outcomes.

Table 2. 

Any OK 529 Account Holding and Total OK 529 Assets by Treatment Status

 Treatment (n = 1,358)Control (n = 1,346)
Percentage with any OK 529 account99.92.4
Percentage with any OK 529 assets99.92.1
Average per-child asset amount across all OK 529 accounts$1,130.00$76.00

Source. Adapted with permission from Beverly et al. (2015).

NoteOK 529 = Oklahoma 529 College Savings Plan. Outcomes were measured as of September 30, 2010, about 30 months after the intervention began. Accounts include state-owned SEED OK and private OK 529 accounts. Assets include SEED OK incentives and deposits made by parents and others to OK 529 accounts. The amount of total OK 529 assets equals deposits less withdrawals, excluding investment earnings. Chi-square and t-tests were used to examine between group differences in the treatment and control groups; all differences were significant at the .01 level.

View Table Image

As of September 30, 2010 (i.e., approximately 30 months after the intervention began), all but one treatment child (whose mother opted out) had an OK 529 account and some assets in that account. Results for the control group showed that, in the absence of the CDA, only 2% of young children had an OK 529 account and assets (Beverly, Kim, Sherraden, Nam, & Clancy, 2015; Nam et al., 2013). The average value of total OK 529 assets—calculated across all SEED OK children, not only those with assets—was much higher among treatment children ($1,130) than among control children ($76; Beverly et al., 2015). These differences were statistically significant. The effect of the CDA on total OK 529 assets was also statistically significant in a regression analysis controlling for other factors (Nam et al., 2013). As intended, the CDA in SEED OK had a large effect on whether a participant had an OK 529 account and assets as well as on the total value of OK 529 assets.

Individual OK 529 account holding and savings

Next, we examine findings related to opening and saving in individual OK 529 accounts (see Table 3). Savings in these individual accounts come from deposits to OK 529 accounts by parents and others, but not from deposits made by SEED OK. The amount of savings was the sum of deposits less withdrawals, excluding investment earnings. Although SEED OK measured the savings in individual accounts and saving behavior matters for CDAs, such behavior was not the primary focus. By design, SEED OK is a population-level intervention, and individual behavior was not the principal criterion for assessing impact (Sherraden, 2014).

Table 3. 

Individual OK 529 Account Holding and Savings by Treatment Status

 Treatment (n = 1,358)Control (n = 1,346)
Percentage with individual OK 529 account*17.32.4
Percentage with savings in individual OK 529 account*8.52.1
Average savings amount in individual OK 529 account$109.00$76.00

Source. Adapted with permission from Beverly et al. (2015) and Beverly, Kim, et al. (2014).

NoteOK 529 = Oklahoma 529 College Savings Plan. Outcomes were measured as of September 30, 2010, about 30 months after the intervention began. Individual savings come from deposits made by parents and others to OK 529 accounts. Amount equals deposits minus withdrawals and does not include investment earnings. Amount is calculated across all treatment and control children; that is, the calculated amount is not limited to children with savings. Chi-square and t-tests were used to examine between group differences of treatment and control groups.

*Treatment–control difference is significant at p < .01.

View Table Image

About 30 months after the intervention began, treatment children (17.3%) were 7 times more likely than control children (2.4%) to have an individual OK 529 account opened by family members or friends. Treatment children (8.5%) were 4 times more likely than control children (2.1%) to have savings in an individual OK 529 account. These differences were statistically significant. On average, treatment children had more individual savings than control children, but the difference was not statistically significant (Beverly, Kim, et al., 2014, 2015). In results from multivariate analysis, the CDA in SEED OK increased the probability of having an individual OK 529 account by 20 percentage points and increased the amount of individual savings in OK 529 accounts by 40% (Nam et al., 2013). A clear pattern emerges from these findings: The CDA in SEED OK increases the likelihood that individual OK 529 accounts are opened for children and that savings are set aside in these accounts. Although the treatment group had a greater amount of individual savings, the difference between the treatment and control groups was not statistically significant.

Savings outcomes among advantaged and disadvantaged children

Because CDAs explicitly aim to reduce asset inequality and to help disadvantaged youth attend and complete college, SEED OK researchers assessed the intervention’s effects among disadvantaged households. In much SEED OK research, children are considered to be disadvantaged if they are African American, American Indian, or Hispanic; if they come from a low-income household; if their parents have low levels of education, are unbanked, are renters, or receive public assistance; or if the primary language in the home is not English. Certainly, not all children in these groups are disadvantaged, but, on average, children in these groups have fewer assets and are less likely to complete college.

By design, the automatic features of the CDA in SEED OK virtually eliminated differences by race/ethnicity and socioeconomic characteristics in ownership of OK 529 accounts and assets. After 30 months, the CDA has increased account and asset ownership rates in some disadvantaged groups from 0% to 100%. For these two outcomes (account ownership and asset holding) the CDA had strong, positive impacts on disadvantaged children because—without the CDA—these children were extremely unlikely to have accounts and assets (Beverly et al., 2015; Nam et al., 2013).

The automatic initial deposit also offsets the effects of disadvantage on asset amounts. After 30 months, advantaged children had significantly more OK 529 assets than disadvantaged children because they had more individual savings. This pattern was found in the treatment group despite the fact that the CDA offered extra savings incentives to low-income treatment families. However, variation in asset amounts by socioeconomic characteristics was much smaller among treatment children than among control children (Beverly et al., 2015; Nam et al., 2013). Again, the automatic features of the CDA in SEED OK had greater positive effects among disadvantaged children.

Two studies examined the role of mothers’ financial knowledge, a characteristic that is strongly associated with socioeconomic advantage. As compared with mothers who possessed a low level of financial knowledge at the baseline, mothers with a high level of financial knowledge were more likely to have opened individual OK 529 accounts for their young children (Huang, Nam, & Sherraden, 2013) and had more personal savings in those accounts (Huang, Nam, Sherraden, & Clancy, 2014). However, in both cases, the effect of financial knowledge was greater for those with the CDA. These findings might indicate that the CDA had a greater impact on financial outcomes that require individual action for those with greater financial knowledge. (For other outcomes, the automatic components of the CDA in SEED OK had a greater impact on those with less financial knowledge.) The findings might also indicate that the presence of institutional supports (e.g., incentives, subsidies, and facilitation) is critical if individuals are to translate financial knowledge into “recommended” financial behaviors.

Another indicator of socioeconomic disadvantage is material hardship. A recent analysis by Wikoff, Huang, Kim, and Sherraden (2015) found that, nearly 4 years after the SEED OK experiment was initiated, children in families experiencing material hardship were less likely than other children to have individual OK 529 accounts. However, across all levels of material hardship, treatment children were more likely than control children to have individual OK 529 accounts. The incentives provided by the CDA in SEED OK appeared to buffer the effect of hardship on 529-plan participation, especially participation by families experiencing low or moderate levels of hardship.

As the summarized evidence shows, college savings initiatives that rely on family resources and individual behavior strongly favor advantaged children. In contrast, the progressive and automatic components of the CDA favor disadvantaged children, especially the automatic opening of SEED OK accounts and the automatic $1,000 initial deposit. These features make the CDA inclusive and represent an important step toward leveling the playing field.

Impacts on the Nonfinancial Outcomes of Parents and Children

Early evidence from the SEED OK experiment has suggested that the CDA has positive effects on parents and children. As previously noted, an important hypothesis is that CDAs raise parents’ expectations for their children’s education. Preserving high expectations and raising low expectations are essential if CDAs are to improve long-term academic outcomes. Kim, Sherraden, Huang, and Clancy (2015) examined the CDA’s impact on mothers’ educational expectations for SEED OK children. The researchers’ measure of expectations captured change between the baseline and the follow-up survey, which was conducted when children were about 4 years old. Kim and colleagues found that, as compared with mothers in the control group, a significantly greater percentage of mothers in the treatment group reported their educational expectations for their child remained stable or increased. Further, Kim and colleagues reported that the CDA in SEED OK reduced by nearly 3 percentage points the probability that mothers’ expectations declined between surveys. Moreover, another study by those authors provided evidence that the CDA in SEED OK raised parental expectations by prompting mothers to open their own OK 529 account for their young children (Kim, Huang, Sherraden, & Clancy, 2014). This finding suggests the CDA in SEED OK offers families a way to begin early preparations for future college expenses (Kim et al., 2014).

If CDAs change maternal attitudes about the future, as has been suggested by theory and some early evidence, then CDAs might also influence maternal mental health. Huang, Sherraden, and Purnell (2014) found that the CDA in SEED OK reduced depressive symptoms among mothers. Measured about 4 years after the start of the SEED OK intervention, the effect is similar in size (.11) to the effect of Early Head Start (.10; Chazan-Cohen et al., 2007). The impact of the CDA on mothers’ depressive symptoms was greater among several disadvantaged subgroups (e.g., low-income mothers and less educated mothers). Another study found that the CDA in SEED OK reduced depressive symptoms more among mothers experiencing material hardship than among mothers who were not experiencing such hardship (Huang, Kim, Sherraden, & Clancy, 2014a). In addition, research has suggested that the CDA reduces maternal depressive symptoms regardless of whether a mother has opened and saved in an OK 529 account for her child (Huang, Sherraden, & Purnell, 2014).

Changes in parental attitudes might improve parent–child interactions, and therefore, have positive effects on child development. Several studies have demonstrated that the CDA in SEED OK positively affected the social-emotional development of children at about 4 years of age, especially in some disadvantaged groups. For example, Huang, Sherraden, Kim, and Clancy (2014) found that the CDA significantly improved social-emotional development for children whose mothers possessed low levels of education, had low income, received public assistance, or rented their homes. The effect sizes for these subsamples were between .20 and .25, roughly similar to at least one study’s estimates of the effect of the Head Start program on social-emotional development (U.S. Department of Health and Human Services, 2010; estimated effect sizes range from .10 to .21). However, the effect of the CDA on social-emotional development was not statistically significant in separate racial and ethnic subgroups (i.e., White, African American, American Indian, Hispanic), perhaps due to inadequate statistical power.

In other studies, Huang, Kim, Sherraden, and Clancy compared children from single-parent headed homes with children from homes with two caregivers, and demonstrated that the CDA in SEED OK had a greater impact on the social-emotional development of children from households headed by single mothers (Huang et al., 2014b). Further, these researchers found that the CDA in SEED OK has had a greater impact on the social-emotional development of children in households that experienced material hardship than on children in households without material hardship (Huang et al., 2014c). The CDA positively influenced children’s social-emotional development regardless of whether mothers had opened and saved in an OK 529 account (Huang, Sherraden, Kim, et al., 2014).

Although researchers hypothesized that the CDA in SEED OK enhances child development, in part, by improving parent–child interaction, one study provided only weak support for this hypothesis. When children were about 4 years old, mothers in the treatment group reported less parenting stress and better parenting practices than mothers in the control group, but the effects were significant at the .05 level for just 1 of 7 measures: the number of times the mother had screamed at her child in the previous 3 days (Nam, Wikoff, & Sherraden, 2014).

Overall, the impact of the CDA on nonfinancial outcomes followed a pattern similar to the impacts on accounts and assets for college. The CDA improved a number of financial and nonfinancial outcomes, but the positive effects of the CDA were often greater for disadvantaged parents and children than for counterparts in advantaged households. Early evidence has suggested that the CDA has positive effects on two nonfinancial outcomes (i.e., maternal depressive symptoms and children’s social-emotional development), regardless of whether parents had opened or saved in an individual OK 529 account. The pattern is clear: The automatic components of the CDA are essential to the positive effects revealed thus far, and these automatic components are especially critical for children from disadvantaged households.

Themes from Extended Interviews with SEED OK Mothers

As previously noted, qualitative interviews with 60 mothers were conducted when SEED OK children were between 2 and 3 years old. Most of these mothers lived in households with low or moderate incomes (i.e., 72% had household income at or below $50,000). Poverty rates in Oklahoma are higher than national averages, and the rates among Oklahoma children younger than 5 years tend to be higher than the rates among Oklahoma children in all other age groups (U.S. Census Bureau, 2012, Table 709, p. 463).

The interviews demonstrated that mothers of young children recognized the value of saving. The mothers reported their most common motives for saving were short-term goals such as covering bills, responding to emergencies, meeting children’s needs, and saving for a “rainy day” (Gray et al., 2012, p. 30). Nearly all mothers expressed the hope that their children will attend college but also noted multiple barriers to educational attainment. Most identified barriers were social in nature (e.g., adverse influence from peers, falling in love, and having children). Mothers recognized that a college education is expensive. Almost half said they planned to finance their children’s education partly with savings, but few had started to save for educational expenses. Some treatment mothers identified challenges that deterred them from opening their own OK 529 accounts. These included lack of surplus income, lack of information on the accounts and incentives, and misunderstanding of the features of the OK 529 account. Mothers also noted that their children’s college years were far in the future (Gray et al., 2012).

Treatment mothers understood that the funds in the automatic, state-owned SEED OK account could be used only for their children’s postsecondary education. A number of mothers seemed to be more hopeful about their children’s future because of the SEED OK account and the $1,000 deposit. Some mothers said that the initial deposit indicated that someone outside the family cares about their children’s future, and several expressed a belief that the account offers “a sense of security—a little bit of relief that something has begun” (Gray et al., 2012, p. 55). For some mothers, receiving regular account statements and program materials helped them to “see their children as college bound” (Gray et al., 2012, p. 76). Even though the primary components were automatic, the CDA in SEED OK seems to have changed the attitudes of some parents in ways that might improve children’s educational outcomes (Gray et al., 2012).

Effect of SEED OK Research on State and National Policy

Policy makers have used findings from the SEED OK experiment to make existing asset-building policies more effective, sustainable, and inclusive as well as to inform the design and implementation of new policies. Perhaps the most prominent example is the Harold Alfond College Challenge in Maine. From 2008 to 2013, the College Challenge offered $500 toward future college expenses to every state resident newborn enrolled by a family member in the state’s 529 college savings plan by age 1 year. Under this voluntary “opt-in” structure, about 40% of newborns were enrolled in the program and received the grant. In 2014, citing SEED OK research, the chair of the Harold Alfond Foundation Board of Trustees announced that all Maine newborns would be automatically enrolled in the College Challenge and would receive the $500 grant. Research from SEED OK directly influenced the decision to adopt this opt-out structure, and Maine created the nation’s first universal, statewide, at-birth CDA policy (Clancy & Sherraden, 2014).

CDA initiatives in several other states haves been informed by research from the Center for Social Development at Washington University in St. Louis, including work conducted in the SEED OK experiment. For example, all children born to or adopted by families in Rhode Island and Connecticut are eligible for a $100 deposit into their state’s 529 plan. Parents can enroll children in Rhode Island’s CollegeBoundbaby program simply by checking a box on the Office of Vital Records birth work sheet. In Connecticut, the state 529 plan is offered by the Connecticut Higher Education Trust, or CHET. Parents who wish to enroll their child must open an account and opt into the CHET Baby Scholars program, but the state provides a match on parent contributions. Connecticut also excludes the value of funds in state 529 accounts from calculations to determine financial aid at state colleges and eligibility for other state-funded, means-tested programs. Nevada automatically establishes a 529 college savings account with $50 for all public-school kindergarten students. Almost 67,000 children had received funds in a Nevada College Kick Start account by the end of 2014 (Deputy Treasurer for College Savings L. English, personal communication, March 25, 2015).

At the federal level, CDAs have been proposed several times, most prominently through the America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act (New America Foundation, 2013). These policy discussions were recently renewed (King, 2014), and researchers at the Center for Social Development are advising congressional committees on CDA policy. Research from SEED OK will inform federal initiatives to make 529 policies more inclusive.


When their children are born, most parents want and expect the child to go to college, but some parents’ expectations wilt over time (Elliott & Beverly, 2011). Many parents do not open college savings accounts for their young children because they have little or no surplus income to save. Others lack confidence in financial institutions or their own financial knowledge. Some choose to wait until their children are older, and others simply procrastinate (Gray et al., 2012). Therefore, college savings initiatives that rely predominantly on family resources and individual behaviors will inevitably favor advantaged children.

In contrast to college savings programs that require parents to open an account, SEED OK’s universal, automatic, and progressive CDA policy model gives all children access to an account and the opportunity to accumulate assets. This distinction is important because the theory and early evidence summarized in this article have suggested that having a college savings account with modest assets can change parents’ attitudes and behavior as well as their children’s early development. In turn, these early positive outcomes might have persistent benefits, shaping longer-term outcomes such as cognitive and educational outcomes.

The design of the SEED OK experiment included important research features such as probability sampling from a full state population, random assignment to treatment and control groups, and the use of multiple research methods, thus making SEED OK an unusually rigorous demonstration and policy experiment. Even at this early stage of research, findings from SEED OK are informing policy and the design of college savings plans at the state and federal levels. As time passes and SEED OK children age, there will be opportunities to address many additional questions. We are particularly interested in whether rates of college enrollment and completion among youth will be influenced by the assets accumulated in the CDA and any changes in attitudes, behaviors, and child outcomes. Future research is planned to examine the various components of the CDA in greater detail. For example, does having a CDA affect attitudes, behaviors, child development, and educational outcomes only when accumulated assets exceed a particular threshold? Do the effects of active account holding and saving differ from the effects of passive account holding and asset accumulation? Thus far, it appears that positive outcomes are not contingent upon large amounts of assets and are not necessarily associated with the amount of savings contributed by parents and others, but these questions deserve additional consideration with data from a longer period. Because SEED OK oversampled African Americans, American Indians, and Hispanics, researchers will be able to investigate important questions about variations by race in successes and disparities. Therefore, SEED OK will contribute to social science knowledge in ways that extend beyond asset building policy per se: The findings will enable us to ask whether a CDA policy intervention can begin to address, even in a small way, deeply embedded social and economic divisions.

If research continues to link CDAs to meaningful, positive outcomes, then the policy challenge will be to make CDAs universally available on a large scale. Research from SEED OK demonstrates that it is possible to implement a universal CDA policy, and some states have begun this journey. It is noteworthy that all of these large CDA initiatives use 529 college-savings plans. The 529 platform makes it possible for a CDA policy to include important features that are not feasible on a large scale with bank savings accounts. Such a policy could be truly universal, serving all children from the time of their birth. Accounts could be opened automatically, and contributions could be made through direct deposit. Access to the funds would be restricted so that the assets are used only for educational expenses or specified developmental needs, and the assets would grow over time. Through use of a centralized accounting system, the policy would ensure that high-value accounts subsidize lower value accounts and that fees remain low. The system would enable account beneficiaries to distribute funds for designated purposes (Clancy et al., 2015).

Another challenge will be to engage parents and children in the process of planning for postsecondary education. CDAs are more likely to improve educational outcomes when families are actively involved in saving, monitoring asset accumulation, incorporating CDAs in conversations about financial management, and considering the accounts in making plans for education and other life goals. In messages disseminated through media, schools, churches, and other organizations, youth and adults should be encouraged to take an interest and participate in CDAs. In addition, general work remains to be done in the area of financial capability: Households need access to financial institutions and sound financial information, yet American households’ often have low financial capability (Birkenmaier, Sherraden, & Curley, 2013). Social workers have made recent advances in this area, generating a body of work on financial capability and asset building. That work is gaining momentum in the profession, and researchers are developing curricula to train helping professionals in financial matters (e.g., Birkenmaier et al., 2013; Morrow-Howell & Sherraden, 2015; Sherraden, Birkenmaier, & Collins, 2015). The Center for Social Development is working with Historically Black Colleges and Universities, tribal colleges, and Hispanic-serving institutions to develop a financial-capability and asset-building curriculum that reintroduces this content into professional social work training.

We do not yet know whether CDAs will lead to improved educational outcomes or other positive social developments over the life course. However, the great benefit of a carefully designed and well-implemented experiment is that knowledge payoffs can continue far into the future.

Major funding for SEED OK comes from the Ford Foundation. Center for Social Development research in SEED OK has been supported by the Ford Foundation, the Charles Stewart Mott Foundation, and the Lumina Foundation for Education. The authors are grateful for our partnership with the state of Oklahoma through Ken Miller, State Treasurer; Scott Meacham, former State Treasurer; Tim Allen, Deputy Treasurer for Communications and Program Administration; and James Wilbanks, former Director of Revenue and Fiscal Policy. We appreciate the contributions of staff at RTI International, especially those of Ellen Marks and Bryan Rhodes. TIAA-CREF, the Oklahoma 529 College Savings Plan Program Manager, also has been a valuable partner. The authors are grateful for the editorial support of Chris Leiker and Tiffany Trautwein, and the helpful comments from three anonymous reviewers.


Michael Sherraden is the George Warren Brown Distinguished University Professor and founding director of the Center for Social Development, Washington University in St. Louis.

Margaret Clancy is the policy director of the Center for Social Development, Washington University in St. Louis.

Yunju Nam is an associate professor in the School of Social Work at the University at Buffalo, State University of New York.

Jin Huang is an assistant professor in the College for Public Health & Social Justice, Saint Louis University.

Youngmi Kim is an assistant professor in the School of Social Work, Virginia Commonwealth University.

Sondra G. Beverly is a senior scholar with the Center for Social Development, Washington University in St. Louis.

Lisa Reyes Mason is an assistant professor in the College of Social Work, the University of Tennessee.

Nora Ellen Wikoff is a lecturer in criminology in the School of Law, University of Manchester.

Mark Schreiner is a senior scholar with the Center for Social Development, Washington University in St. Louis.

Jason Q. Purnell is an assistant professor in the George Warren Brown School of Social Work, Washington University in St. Louis.

Correspondence regarding this article should be sent to Dr. Michael Sherraden, Washington University in St. Louis, One Brookings Drive, Campus Box 1196, St. Louis, MO 63130, or via e-mail to