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When Traditional Asset Building Is Not Enough

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Document date: July 16, 2008
Released online: July 16, 2008

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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This paper is a response to New Safety Net Paper 7, "Enabling Families to Weather Emergencies and Develop: The Role of Assets," by Signe-Mary McKernan and Caroline Ratcliffe.


McKernan and Ratcliffe’s paper highlights the need to change budget priorities and focus more on helping low-income families gain assets. The authors’ engaging analysis is particularly important for policymakers as well as policy analysts, contributing to what we know about asset building among the low income, consequences of the problem, and potential policy solutions. Their cost-benefits analysis is particularly effective because often policy development and implementation-enforcement are a compromise between budget priorities and values, without rigorous evaluation. This is a thoughtful, practical proposal of how to extend traditional asset policies to low-income households.

While ambitious along traditional lines, McKernan and Ratcliffe’s policy agenda proposes minimal moral imperatives but some pragmatic policies that have a chance of being supported in this political climate (though would still be considered by some to be too proactive and interventionist). Research and practice suggest that this is not enough to pull low-income households out of debt and into asset stability. By focusing on increasing savings levels and vehicle ownership among low-income families, McKernan and Ratcliffe do not sufficiently address the consumption needs and constraints, and savings limitations on low-income people. They also do not disaggregate their policy analyses or prescriptions by race or gender. The low income are not a homogeneous group, though most face similar constraints. McKernan and Ratcliffe’s policy menu, therefore, is missing additional strategies, such as collective ownership, to remedy such challenges as income and savings constraints, institutional racism, and racial and gender discrimination.

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Topics/Tags: | Employment | Families and Parenting | Poverty, Assets and Safety Net


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