Economic Growth

Large-Scale College Savings Account Demonstration Announced

June 6, 2012
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Last week, the US Department of Education (ED) announced plans to pursue a College Savings Account Demonstration project, which will be implemented within the GEAR UP Program and designed to expand the policy toolbox to get more high school graduates to and through college.

GEAR UP is an existing program that focuses on promoting college readiness for lower-income students. It provides resources for academic and related support services and in recent years has been funded at over $300 million a year.

The proposed demosntration project will provide 10,000 high school students with savings accounts as well as financial education counseling and will also deploy a rigorous, randomized control design to test the impact of the intervention. This will allow the demonstration to inform strategies at the federal, state and local level.

Previously, we have highlighted research that suggests students with savings accounts are much more likely to enroll in college than students without accounts. Based on this work, Secretary of Education Arne Duncan joined the FDIC and the national Credit Union Administration in a commitment to increase the number of students with savings accounts. With this announced Demonstration, ED is making good on this commitment. Secreatary Duncan and his colleagues at ED see this as a key strategy for helping the country meet its ambitious college completion goals. By 2020, the US aims to have the most comptitive workforce in the world, as measued by the proportion of colelge graduates over the next decade.

Under the proposed Notice published last week, each participating student will receive $200 in seed funding to start the account, which the state will open automatically. Students will have an opportunity to earn an extra $10 per month in a dollar-for-dollar savings match program over the next four years. This will mean a student can save over $1,000 by the time they are ready for college.

ED will initially allocate $8.7 million worth of funds that are already appropriated to support the demonstration, and devote more to the multi-year research evaluation. Although the Notice is not final, I believe at least the following States are eligible: Arizona, California, Connecticut, Idaho, Kentucky, Montana, Nevada, North Carolina, South Carolina, South Dakota, Tennessee, Texas, and Washington.

At this point, ED is inviting feedback on their proposal. Comments are due by June 30th and a final Notice will describe the application process for states interested in competing to participate.

Achtung Baby: Germany Is Riskier than You Think

June 5, 2012

This presentation is posted with permission from World Economic Roundtable members from Carmel Asset Management.

Why a Grexit Would Make Lehman Look Like Childs Play

June 5, 2012

This post originally appeared at TF Market Advisors.

by Peter Tchir

The Future of Food: Five Frontiers

  • By
  • Elizabeth Weingarten,
  • New America Foundation
June 1, 2012 |

Generations of kids have grown up forbidden to taste chocolate cake batter. The rationale for this quasi- torture: fear of salmonella poisoning.

And at the current rate of food technology, the kids of 2040 may be eating healthier cookie dough, too—gooey hunks infused with nano-sized nutrients, with chocolate chips engineered to be less fattening.

But future children may never know what salmonella is: A Dutch company is currently developing a consumer spray to kill the bacteria on contact. Salmonelex may sit next to Windex on future kitchen counters.

The Invisible Wall against Social Protection Reform in China

May 29, 2012
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Recently, the city of Chongqing has become the center of media attention caused by the political scandal surrounding prominent party leader Bo Xilai – the former top official in the Chinese province of Chongqing. Even before the scandal, Mr. Xilai received both praise and opprobrium for his policies and his role in the region’s rapid economic growth.

Why Eduardo Saverin Has Company in Singapore

  • By
  • Parag Khanna,
  • New America Foundation
  • and Ayesha Khanna
May 24, 2012 |

It’s a cliché that the Pacific Ocean is displacing the Atlantic, that China will replace America at the top of the world’s hierarchy of power, and the East will surpass the West. The cliché is also wrong. The multipolar world we are entering will have no single winner, and the three-pillared West of the European Union, North America, and Latin America remains a triangular zone of peace and foundation of global stability.

What Economists Get Wrong About Science and Technology

  • By
  • Konstantin Kakaes,
  • New America Foundation
May 17, 2012 |

Robert Solow, winner of the 1987 Nobel Memorial Prize in Economic Sciences, is famous for, in the recent words of a high-ranking State Department official, “showing that technological innovation was responsible for over 80 percent of economic growth in the United States between 1909 and 1949.” Or as Frank Lichtenberg of Columbia University’s business school has written, “In his seminal 1956 paper, Robert Solow showed that technical progress is necessary for there to be sustained growth in output per hour worked.”

Why Corporate America Shrugged at the Wal-Mart Bribery Scandal

  • By
  • Steve LeVine,
  • New America Foundation
May 16, 2012 |

When the New York Times reported last month that Wal-Mart had brazenly been bribing government officials in Mexico, the public responded with anger. According to the Washington Post, the outcry forced the U.S. Chamber of Commerce to slow its campaign to water down the Foreign Corrupt Practices Act (FCPA), the 1977 law that bars payoffs to foreign decision-makers in exchange for business. The agitation also led to a 5 percent drop in the price of Wal-Mart stock.

War, Trade and Utopia

  • By
  • Barry C. Lynn,
  • New America Foundation
December 1, 2005 |

In the spring of 2001 Andrew Grove, the chairman of Intel, made a remarkable statement. Any conflict in or around the Taiwan Strait that resulted in a break in trade, he said, would result in the “computing equivalent of Mutually Assured Destruction.” The implication, at least for the vitally important electronics industry, was that the production systems of the United States and China had become entirely in- tertwined and interdependent. equally remarkable is how little attention this statement, by one of the world’s most well-known industrialists, has received in the four years since.

Savings Song Launches YouthSave's Financial Education Workshops in Colombia

May 11, 2012
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By Alejandra Montes Saenz, Save the Children Colombia

Cross-posted on YouthSave.org

As part of the overall Financial Capability strategy for Colombia, Save the Children has conducted several launch events in the same schools where the implementation of the financial capability workshops will take place. The overall goal of these events is to gather the students, teachers and school staff and encourage them to start thinking about the importance of saving as a mechanism for young people to achieve their goals and dreams. We used ‘edutainment’ strategies—different forms of entertainment to deliver educational messages—to develop a fun and interactive design for the youths’ first encounter to financial capability topics, so that positive expectations could be built around the upcoming financial capability workshops.

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