Assetbuilding

Assetbuilding refers to policy approaches and individual strategies aimed at increasing the accumulation of financial and productive assets by households. Assets can include liquid savings, retirement accounts, home equity, education and vocational training, and social or human capital. The goal is to improve economic security, resilience to shocks, and opportunities for upward mobility, particularly for low- and middle-income families who may have limited access to wealth.

Common instruments include matched savings programs such as Individual Development Accounts, which provide government or philanthropic matches for assets saved for specific goals like education, home purchase, or small business development; tax-advantaged accounts and credits; employer-sponsored retirement and savings plans; and education savings accounts. Financial education and credit-building services are often offered in conjunction with asset-building programs to improve saving habit formation and financial management.

Evidence on asset-building programs shows mixed results. Some programs increase saving rates and asset holdings in targeted populations, and may improve long-term financial security, but effects on broader income mobility and wealth accumulation are less clear and depend on program design, economic conditions, and follow-up. Costs, administrative complexity, and potential crowding-out of other forms of financial support are common concerns among critics.

Asset-building is part of broader financial inclusion and social policy. It interacts with income growth, housing markets, and public safety nets. Proponents emphasize wealth inequality reduction and intergenerational mobility, while critics caution against overemphasizing asset ownership in the presence of insufficient income and argue for robust income support and universal services.