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PREDICTING SAVINGS FROM ADOLESCENCE TO YOUNG ADULTHOOD: EARLY ACCESS TO SAVINGS LEADS TO IMPROVED SAVINGS OUTCOMES

Friedline, Terri (2012) PREDICTING SAVINGS FROM ADOLESCENCE TO YOUNG ADULTHOOD: EARLY ACCESS TO SAVINGS LEADS TO IMPROVED SAVINGS OUTCOMES. Doctoral Dissertation, University of Pittsburgh. (Unpublished)

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Abstract

Young people’s savings has received attention for its unique effects on educational outcomes, namely college attendance and graduation. Young people are three to six times more likely to attend and graduate from college when they have savings accounts of their own compared to those without savings accounts, even when considering household income and assets. Given these findings, researchers and policymakers are offering up young people’s savings as a solution for mitigating the effects of parents’ and households’ financial resources on educational outcomes.

For the most part, research focuses on young people’s savings as a predictor, giving less consideration to variables that predict their savings. This distinction is relevant given the potential for selection bias in how young people come to have savings. Young people’s savings may be another manifestation of households’ financial resources, meaning that young people have savings accounts more often when their parents and households have greater financial resources. Along these lines, questions of interest include whether young people’s financial outcomes, and ultimately their educational outcomes, can be improved by extending access early in life to basic financial services like savings accounts.

This dissertation tests predictors of young people’s savings—including having savings accounts and median amount saved (±$600)—between adolescence and young adulthood using a longitudinal sample (N = 694) from the Panel Study of Income Dynamics (PSID) and its 2002 Child Development (CDS) and 2007 Transition into Adulthood (TA) Supplements. Propensity score weighting accounts for observed selection into groups of adolescents with and without savings accounts.

As the evidence stands, early access to savings leads to improved financial outcomes. Results indicate that young adults are almost two-and-a-half times more likely to have savings accounts and almost two times more likely to have savings above the median when they have savings accounts as adolescents. Young adults are more likely to have savings accounts and more money saved when their heads of households have more education and prestigious occupations, and parents have savings on adolescents’ behalf (e.g., 529 savings plans, Roth IRAs). Policy innovations that extend access to savings accounts may be a novel way to improve young people’s outcomes.


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Details

Item Type: University of Pittsburgh ETD
Status: Unpublished
Creators/Authors:
CreatorsEmailPitt UsernameORCID
Friedline, Territlf13@pitt.eduTLF13
ETD Committee:
TitleMemberEmail AddressPitt UsernameORCID
Committee CoChairElliott, Williamwelliott@ku.edu
Committee CoChairKoeske, Garygkoeske@pitt.eduGKOESKE
Committee MemberRauktis, Mary Bethmar104@pitt.eduMAR104
Committee MemberChowa, Ginachowa@email.unc.edu
Date: 10 April 2012
Date Type: Publication
Defense Date: 17 February 2012
Approval Date: 10 April 2012
Submission Date: 2 April 2012
Access Restriction: No restriction; Release the ETD for access worldwide immediately.
Number of Pages: 183
Institution: University of Pittsburgh
Schools and Programs: School of Social Work > Social Work
Degree: PhD - Doctor of Philosophy
Thesis Type: Doctoral Dissertation
Refereed: Yes
Uncontrolled Keywords: Children; Savings; Panel Study of Income Dynamics; propensity score analysis
Date Deposited: 10 Apr 2012 14:13
Last Modified: 15 Nov 2016 13:57
URI: http://d-scholarship.pitt.edu/id/eprint/11642

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