Publication Date



Raising asset limits and creating individual development accounts have been proposed in welfare reform. In part the rationale for these proposals is that assets have positive effects on attitudes and behaviors, including long-term planning, greater work effort, and improved social connectedness. The Panel Study of Income Dynamics (PSID), between 1968 and 1972, included a wide range of attitude and behavioral measures. In this study, data from the PSID are analyzed to test for the following: a) the effect of assets on attitudes and behaviors; b) the effect of attitudes and behaviors on assets; c) the effect of income on attitudes and behaviors; and d) the effect of attitudes and behaviors on income. A path analytic model is estimated using LISREL. Results indicate modest effects of some assets that are (a) consistently positive as predicted, and (b) overall as strong as the effects of income. Results support the proposition that assets have a positive effect on expectations and confidence about the future; influence people to make specific plans with regard to work and family; induce more prudent and protective personal behaviors; and lead to more social connectedness with relatives, neighbors, and organizations. These results suggest that policy demonstrations are desirable.

Document Type

Working Paper


Asset building


Inclusion in Asset Building

Original Citation

Yadama, G., & Sherraden, M. (1995). Effects of assets on attitudes and behaviors: Advance test of a social policy proposal (CSD Working Paper 95-2). St. Louis, MO: Washington University, Center for Social Development. Subsequent publication: Yadama, G., & Sherraden, M. (1996). Effect of assets on attitudes and behaviors: Advance test of a social policy proposal. Social Work Research, 20, 3-11.


IDA, individual development account, PSID, attitudes, policy, assets, asset effects