Briefing Paper

What do we want from the ‘asset-effect’? The search for an ‘asset-effect ’ has been one of the enduring preoccupations of research into wealth and welfare over the last decade. In this briefing I suggest that, even if there is such an effect, this is only the start of the debate. For believers in the asset-effect, wealth provides something ‘over and above ’ the instrumental goods it gives access to (Sodha and Lister, 2006). The most recent evidence has found an association – though not necessarily a causal relationship – between small amounts of assets early in life (roughly £1000 in 1980 prices) and improved outcomes in terms of employment, higher wages, and physical and mental health later in life (Karaginannaki and McKnight, 2013). And, in the US, evaluations of the Individual Development Accounts (a subsidised savings account for lower-income households) have also reported positive effects, creating a sense of security and confidence in the future (Assets for Independence, 2008). There are significant methodological issues with this evidence. Recent evidence reviews in the US have pointed to absence of robust longitudinal evidence and lack of causal evidenc