Chapter

Education Savings Incentives and Household Saving

Jennifer Ma

in College Choices

Published by University of Chicago Press

Published in print October 2004 | ISBN: 9780226355351
Published online February 2013 | e-ISBN: 9780226355375 | DOI: http://dx.doi.org/10.7208/chicago/9780226355375.003.0005
Education Savings Incentives and Household Saving

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The introduction of education savings programs is only one of the government's interventions in the capital market for higher education investments. Using wealth data from a survey of TIAA-CREF participants, this chapter examines whether education savings programs offset other household savings, controlling for saver heterogeneity. Results suggest that, in general, education saving does not seem to offset other forms of household saving. For households with a high likelihood of using education savings accounts, education saving seems to be positively correlated with other household assets. The chapter also describes the 529 plan and the recently renamed Coverdell Education Savings Account and provides a brief summary of the Education Individual Retirement Account (IRA) and 401(k) literature. Finally, it discusses the empirical strategies used to identify savers from non-savers.

Keywords: education savings programs; capital market; higher education; investments; household savings; 529 plan; Coverdell Education Savings Account; Individual Retirement Account; savers; non-savers

Chapter.  15289 words. 

Subjects: Higher and Further Education

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