Heterogeneous Effects of Child Development Accounts on Savings for Children’s Education

We examine effects of Child Development Accounts on savings for postsecondary education in a statewide experiment (N = 2,677), which automatically opened state-owned college savings accounts for treatment-group children, and encouraged their caregivers to open and save in participant-owned college savings accounts. The experiment achieves universal participation for children in the treatment group; almost all treatment-group children hold an account with more than $1,000 in college assets. Treatment participants we expect would hold their own participant-owned accounts without the intervention have $395 more in savings than their counterparts in the control group; those who are motivated by the intervention to hold a participant-owned account have mean deposits of $888. Those who are motivated by the intervention to save have mean deposits of $1,826. The intervention reduces the socioeconomic disparity in asset accumulation for children. The program has the potential to promote asset building for children’s education.