The 'assets effect': new research shows that having even a small nest egg of their own helps kids from modest backgrounds work harder to get to ahead.

• Author: Goldstein, Dana
• Position: THE FUTURE OF SUCCESS

Willie Elliott grew up in Beaver Falls, Pennsylvania, just as the steel mills were shutting down. His father, a train conductor and engineer, was frequently laid off; his mother worked as a waitress and in warehouses to help make ends meet. The family experienced several bouts of homelessness.

During his senior year, Elliott became a born-again Christian and dropped out of high school to launch a mission serving alcoholics. After two exhausting years, he decided to earn his GED and was accepted at Geneva College, a small Christian school where he studied philosophy and graduated. But from there his educational path and career faltered again. His parents told him they would help pay for him to attend law school, but they were evicted from their home shortly after he enrolled. Elliott ended up withdrawing from school and joining the military. By the time he earned his Master of Social Work and PhD from Washington University in St. Louis, he was nearly forty years old.

Today Elliott tests theories about what could make it more likely that kids coming up the hard way will succeed. One finding he and other academic researchers have confirmed may surprise you. When kids have even a small savings account in their name, it increases the chance they Hill persevere and do what it takes to get through college.

Among kids who expect to graduate from college, the income of their parents makes little difference in the chances that they will actually enroll. But whether or not they have a savings account in their own name makes an enormous difference. Those who have an account are about seven times more likely to attend college than similar youth who did not have an account. A savings account also increases the chance that they Hill persevere and do what it takes to get through college. Those with a savings account opened for them as children are about twice as likely as their peers without savings to have graduated or to be on course to graduate from a two- or four-year college by age twenty-three.

This correlation is particularly strong among young adults whose families earn less than $50,000. According to an upcoming paper by Elliott, Monique Constance-Huggins, and Hyun-a Song in the Journal of Family and Economic Issues, these students are three times more likely to be on course to graduate than their low- and moderate-income peers without any savings. Partly in response to such findings, in May the Department of Education announced the College...