What If All Americans Started Saving From Birth?

Editor’s Note: This article previously appeared in a different format as part of The Atlantic’s Notes section, retired in 2021.

Michael Sherraden, the director of the Center for Social Development at Washington University in St. Louis, read our cover story and imagines what would happen if development accounts—ones that kids could draw on for major milestones—were established at birth and implemented as U.S. policy.

Enough monthly income is important, but owning assets is the key to family stability and development. Yet many Americans struggle to accumulate even modest assets. They live with no buffer against cuts in income and unexpected expenses.

Now imagine this scenario:

For every baby born in the United States, an account is opened with funding from multiple public, nonprofit, and private sources. Over the years, family members contribute to the accounts. Earnings gradually accumulate, and the accounts grow in value over time. When the babies grow into young adulthood, they use the accumulated assets to help pay for their postsecondary education. Later, they use them to buy a home. When they’re older, they use them in retirement.

Such accounts already exist: Child Development Accounts (CDAs). At the Center for Social Development, we are engaged in a large-scale policy test of these accounts, a statewide experiment in Oklahoma. Results are positive. Our research is informing policy in U.S. cities and states, and other countries have adopted CDAs. Singapore, for instance, announced an expansion of CDAs in March, with the equivalent of US$2,200 deposited automatically into accounts of every newborn.

Universal, automatic, and progressive CDAs could become national policy in the United States. Over time these accounts would lead to more inclusive and less unequal asset accumulation. U.S. families—and the nation as a whole—would do better.