Financial Knowledge and Child Development Account Policy: A Test of Financial Capability





  • Jin Huang ( is an Assistant Professor at School of Social Work, Saint Louis University and Yunju Nam ( is an Assistant Professor at School of Social Work, University at Buffalo, State University of New York. Margaret Sherrard Sherraden ( is Professor at School of Social Work, University of Missouri-St. Louis. Support for the SEED for Oklahoma Kids experiment comes from the Ford Foundation, Charles Stewart Mott Foundation and Lumina Foundation for Education. We value our partnership with the State of Oklahoma, including State Treasurer Ken Miller, former State Treasurer Scott Meacham, Tim Allen, James Wilbanks, Kelly Baker, Derek Pate, Sue Mallonee, Tony Mastin and James Conway. We appreciate the contributions of Ellen Marks, Bryan Rhodes and Jun Liu at RTI International. The authors thank Margaret Clancy for her careful review and insightful comments on the manuscript. We are grateful to Michael Sherraden, Sandy Beverly and Mark Schreiner for their valuable discussions on the SEED OK project. The authors thank Youngmi Kim and Nora Wikoff for their support on data management. Erin Moriarity provided valuable research assistance. Carrie Freeman, Tiffany Trautwein and Julia Stevens provided editing assistance.


This study examines how study participants' financial knowledge and participation in a Child Development Account intervention affects 529 College Savings Plan account holding among caregivers of infants. The study uses data from the SEED for Oklahoma Kids (N = 2,651), a statewide randomized experiment using a probability sample of infants selected from birth records. Results of logit regression show that participants' financial knowledge is positively related to account holding in the treatment group but not in the control group. The interactive effects between financial knowledge and treatment status are statistically significant. This finding implies that the effect of financial knowledge on financial decisions related to college savings is moderated by institutional features, such as incentives, information and access. Results of this study support the propositions of financial capability and suggest that expanding financial capability requires both improved individual financial knowledge and supportive policy.