Israel’s parliament has passed a law funding long-term savings accounts for all newborns, based on a proposal developed by Michal Grinstein-Weiss, PhD, professor at the Brown School at Washington University in St. Louis and associate director of the Center for Social Development (CSD), and on research efforts led by Michael Sherraden, PhD, the George Warren Brown Distinguished University Professor and director of CSD.
Under the new law, Israel’s child accounts, known as CDAs in the United States, would be established for all newborns in Israel. The law allows recipients to access funds at age 18 for education, small business enterprise, marriage or homeownership. At age 21, the funds will be accessible with no restrictions.
“This is an important policy innovation and a great step toward achieving a better future and reducing income and assets inequalities in the long run,” Grinstein-Weiss said.
About a third of Israeli children live below the poverty line. The new accounts will build on Israel’s existing child allowance. Each child will receive 50 shekels each month, equivalent to $13.20, for long-term savings. The money will be in addition to the amount received for his or her regular child allowance and go to the child’s mother starting January 1, 2017.
Read the full story in The Source: CSD’s work leads to Israel adopting child savings accounts