Investing in Children: Child Development Accounts as an Early Childhood Intervention

This paper builds a case for Child Development Accounts (CDAs) as an early childhood intervention with the potential to complement existing early child intervention programs. It suggests that CDAs provide opportunities for families to make economic investments in their children, and combining these accounts with other early childhood interventions like pre-kindergarten or preschools may prepare children for success, especially those living in poverty. The paper evaluates the potential of CDAs as a tool to mitigate the adverse effects of poverty and reviews their ownership and development. It concludes with policy design considerations for developing CDAs as an early childhood intervention. Key policy considerations include:

• Open CDAs in children’s names to cue their ownership over accounts;
• Leverage language to message and market CDAs, making the future feel more proximal;
• Allow CDAs to facilitate saving toward short- and long-term goals;
• Integrate desired rules or norms about saving into CDAs as part of their messaging;
• Incorporate observable characteristics to make CDAs understandable to young children;
• Incorporate cues into CDAs that can prime saving behaviors, making it easier for children to store and retrieve information about saving;
• Design CDAs to grow with children’s saving needs across the life course.