Concept and proposal
Sherraden (1991) argued that income support helps consumption, but assets let people plan and invest in education, business and housing. He proposed Individual Development Accounts (IDAs), matched savings accounts for low-income households. South Korea's youth savings accounts follow similar logic, and the idea connects to the social investment state.
Housing and assets
Kemeny (2005) described a 'really big trade-off' in which high home ownership coexists with weaker welfare states. Doling and Ronald (2010) traced the turn to housing as old-age security, and Ansell (2014) showed rising house prices reduce owners' support for social insurance. Grinstein-Weiss and colleagues (2013) found IDAs raised postsecondary enrolment for some groups.
Critiques
Finlayson (2009) argued it shifts risk from the state to individuals and deepens dependence on financial markets. Watson (2009) showed its fragility when house prices fell in the financial crisis. Critics also warn of a Matthew effect favouring those who already have assets, and similarities to neoliberal welfare.
FAQ
- What is asset-based welfare in simple terms?
- Helping people build savings or housing so they can prepare for the future themselves, rather than only giving monthly income.
- What is an Individual Development Account?
- A matched savings account where the government or an agency adds money when low-income people save.
Sources reviewed: 2026-10-26
References
- Sherraden, M. (1991). Assets and the poor: A new American welfare policy. M. E. Sharpe. The classic proposal for asset building among the poor.
- Kemeny, J. (2005). "The really big trade-off" between home ownership and welfare: Castles' evaluation of the 1980 thesis, and a reformulation 25 years on. Housing, Theory and Society, 22(2), 59–75. On the trade-off between home ownership and welfare.
- Finlayson, A. (2009). Financialisation, financial literacy and asset-based welfare. The British Journal of Politics and International Relations, 11(3), 400–421. A critique from a financialisation perspective.
- Watson, M. (2009). Headlong into the Polanyian dilemma: The impact of middle-class moral panic on the British government's response to the sub-prime crisis. The British Journal of Politics and International Relations, 11(3), 422–437. Shows its risks during the sub-prime crisis.
- Doling, J., & Ronald, R. (2010). Home ownership and asset-based welfare. Journal of Housing and the Built Environment, 25(2), 165–173. Housing as a basis for welfare in later life.
- Grinstein-Weiss, M., Sherraden, M., Gale, W. G., Rohe, W. M., Schreiner, M., & Key, C. (2013). Long-term effects of individual development accounts on postsecondary education: Follow-up evidence from a randomized experiment. Economics of Education Review, 33, 58–68. Long-term results of a randomised IDA experiment.
- Ansell, B. (2014). The political economy of ownership: Housing markets and the welfare state. American Political Science Review, 108(2), 383–402. Rising house prices reduce support for social insurance.