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Article Excerpt
INTRODUCTION
Despite increases in rates of income in the 1990s, U.S. women continue to lag behind U.S. men economically. (1) American women in the 1990s made just 73% the earnings of their male counterparts. (2) A recent Census Bureau study found that despite "record highs" in earnings and bachelor's degrees, American women were far more likely than men to be living in poverty. (3) In 2002, 13.3% of American women lived below the poverty line, as compared to 10.9% of men. (4) In addition, over one-third of female-headed households lived in poverty. (5) In part, this may be because many working women occupy lower-paid positions than their male counterparts. For example, the largest field in which women are employed is "administrative and clerical." (6) Further, though shifts in welfare laws have increased women's participation in the workforce, it is not clear they have improved women's economic standing. In fact, the average wage for those women most impacted by welfare reform--never-married mothers--is only about $14,000 per year. (7)
Women not only disproportionately face poverty in actual dollars, but poverty in assets as well. According to Michael Sherraden, author of Assets and the Poor: A New American Welfare Policy, assets include: savings accounts, real property, and human capital (including education and experience). (8) A recent study by the Levy Economics Institute revealed that of all family types, "female-headed families with children" had the highest rates of asset poverty, followed by "families with children" in distant second. (9) Also, a recent initiative spearheaded by Brandeis University noted the disparity of women's asset wealth:
[M]any women in America have not yet gained the assets--the quality jobs, human capital, savings and investments, and other capacities and resources--that are essential to economic security and opportunity. For women, traditional policies may have resulted in more participation in economic life, but many have yet to make it into the economic mainstream. Asset development is the means by which to craft a new and compelling social vision. (10)
It is against this backdrop that women's important stake in programs and policies focused on the development of assets becomes clear.
The asset development strategies that have emerged over the past several years might serve as part of the answer to the problem of women's poverty. The assets included in these strategies include both economic assets such as owning a home and having a bank account, as well as less tangible assets such as a college degree. (11) This Note is limited to the application of these strategies to women in the context of Individual Development Accounts ("IDAs"). Part I provides background on the contours of women in poverty in the United States, along with a brief overview of previous strategies aimed at alleviating poverty. Part II provides a history of IDAs, with an explanation of how IDAs traditionally operate and potential avenues of expansion. Part III lays out current federal and state IDA policy. Part IV highlights current IDA initiatives targeting women. The Note concludes with recommendations for areas of further research.
I. WOMEN'S POVERTY
The United States Census Bureau began publishing statistics on poverty in the late 1950s. Since that time, women have constituted a disproportionate share of those in poverty, increasing from the 1950s through the 1980s, when they made up 62% of all poor adults. (12) Commentators have suggested reasons for women's disproportionate representation among the poor, such as "carry[ing] the major burden of childrearing," and "limited opportunities ... in the labor market." (13)
Because women have higher rates of poverty than men, American initiatives aimed at alleviating poverty have particularly impacted women. Thus, the development of public assistance in the 1930s (14) was particularly salient for women. Public assistance programs in the United States have changed drastically over time, however, facing a massive overhaul in the 1980s, (15) and transitioning to welfare-to-work in 1996. (16) The 1996 law removed many from the welfare rolls, although significant poverty persisted (17) and women remained the majority of the poor.
II. AN ASSET-BASED SOLUTION
Strategies to alleviate poverty, like welfare, and now welfare-to-work, have been criticized for leaving individuals vulnerable to slipping back into poverty. For example, because never-married mothers earn just $14,000 per year, many women are in a particularly precarious situation. Based on these low earnings, if a woman were to miss work for an emergency or other mishap and lose her job, poverty for her and her family is a very likely consequence.
A recent alternative approach to the poverty problem attempts to alleviate poverty through assets in Individual Development Accounts ("IDAs"). The IDA concept was introduced in 1991 by Michael Sherraden in Assets and the Poor: A New American Welfare Policy. (18) The welfare system uses income as a strategy to try to help the poor, although, as Sherraden has pointed out, welfare has failed to actually decrease poverty. (19) To get at the "underlying level of poverty," Sherraden advocated not an income-based approach like welfare, but an asset-based approach. (20) According to Sherraden, the United States government and private organizations have previously used asset-based strategies to impact specific populations or social problems with great success. (21) Examples include strategies to promote retirement savings through 401(k) accounts, 403(b) accounts, and Individual Retirement Accounts ("IRAs"). (22) Among the most successful and recognized asset-development program is the GI Bill. (23) Following World War II, the GI Bill provided veterans with financial support toward post-secondary education and homebuying. (24) The legislation resulted in nearly eight million veterans receiving "vocational training," another two million going to college, and four million veterans buying homes with GI Bill "mortgage subsidies." (25) Considering both public and private policies, Sherraden concludes that "asset accounts ... are the...
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