Performance Improvement 2010. Examine Asset Development and Tax-System Incentives


Three ASPE studies focused on various aspects of poverty, asset building, and social policy.  In the first, a conceptual framework for asset accumulation over an individual's lifetime was created through the application of the life course perspective to asset building theory.  The report identified and explored five factors that are important in understanding the low levels of asset accumulation among low-income households: intergenerational transmission of assets; race and ethnicity; income; family structure; and life stages and the timing of life events.  (8888.4)

A second study examined what is known about the relationships between asset holding and economic well-being, social well-being and civic engagement, child well-being, and health and psychological well-being.  Research has demonstrated that asset holding and positive outcomes are correlated, but the research summarized by this report provides little evidence of a causal relationship.  Areas for further research are described in the report.  (8888.5)

The third study reviewed the definitions and measures of assets and asset poverty in existing theoretical and empirical studies.  The authors also offered suggestions for the development of better definitions and measures to inform future research and policy development.  (8888.6)

An ASPE study conducted by the Urban Institute explored the background and rationale for a non-custodial earned income tax credit (EITC).  The study examined three policy scenarios for a national non-custodial parent EITC based on the credits adopted by New York and Washington, D.C.  Under current federal income tax rules, low-income noncustodial parents are ineligible for EITC available to low-income families with children, even when they support their children through full payment of child support.  While the EITC and child support have successfully removed many low-income working families from poverty, the combined effect of taxes and child support payments can leave noncustodial parents working at or near the minimum wage with an income at or below the poverty level.  (9323

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