OECD Forum on Mexico: Policies to Promote Growth and Economic Development Mexico City 3 November 2004. Ray Boshara New America Foundation Washington, DC 202-986-2700 [email protected] What is Asset Building?.
“Lack of income means you don’t get by; lack of assets means you don’t get ahead”
See Michael Sherraden, Assets and the Poor (1991)
Income -> Work -> Assets
Passive -> Active
Programs -> Accounts
Placed-based -> Citizen-based (portable)
- Assets are well-suited to 21st Century economy and new social contract that combines “choice and responsibility”
- Challenge remains to preserve some traditional social insurance programs, where certain risks may need to be pooled.
1. Can the poor save in IDAs?
“Savings by the poor are modest, ranging from $18 to $38 per month in net savings…” (USA, UK, Canada, Taiwan)
2. What effect do IDAs have on savings and asset accumulation?
“Access to the IDA program had a significant influence on the savings and asset accumulation of those served by the Tulsa IDA program…” (USA, experimental research)
Better labor market experience, marriages, health, health behaviors, political interest
Better cognitive development, physical health, and socio-emotional behavior, even among very income-poor families
Single mothers’ assets are positively associated with children’s educational attainment
IDAs (more likely to):
Work or stay employed, and work more hours
Make educational plans for self and children
Feel more economically secure
Feel confident about the future
Feel in control of their life
Create greater future orientation
See more clearly and better visualize a future
More likely to save for their futureResearch on “Asset Effects”(Research organized and summarized by Sherraden, 2004)
Asset policies hold the potential to:
* Transform passive welfare and states to active social investment states
* Result in better economies and better citizens, thus providing a greater return on scarce public dollars
* Reduce inequality and social exclusion, thus resulting in greater social cohesion
LEED Programme, OECD, Paris
Center for Social Development, Washington University in St. Louis, USA
Asset Building Program, New America Foundation, USA
Asset Building Clearinghouse: www.AssetBuilding.org