Center on Assets, Education, and Inclusion

  1. Extending savings accounts to young people: Lessons from two decades of theory and research and implications for policy

    Citation

    Friedline, T. (2014). Extending savings accounts to young people: Lessons from two decades of theory and research and implications for policy. In R. Cramer & T. Williams Shanks (Eds.), The assets perspective: The rise of asset building and its impacts on social policy (pp. 203–223). New York, NY: Palgrave MacMillan.

    Authors

    Friedline, Terri

    Children's Savings Account Chapter Year 2014

  2. Households' net worth accumulation patterns and young adults' financial well-being: Ripple effects of the Great Recession

    We examined households’ dynamic patterns of net worth accumulation between 1999 and 2009 and asked whether these patterns related to the financial health of young adults growing up in those households. Two patterns of net worth emerged—the first remained high and stable and the second experienced a precipitous decline between 2007 and 2009. Young adults who grew up in households with high and stable net worth also experienced the greatest benefit in financial health. Given wealth losses in the wake of the Great Recession and the ripple effects those losses may have had—and may continue to have—on households and their children, policies that stimulate wealth accumulation may be feasible and timely strategies for improving financial health.

    Citation

    Friedline, T., Nam, I., & Loke, V. (2014). Households' net worth accumulation patterns and young adults' financial well-being: Ripple effects of the Great Recession? Journal of Family and Economic Issues, 35, 390-410.

    Authors

    Friedline, Terri, Nam, Ilsung, Loke, Vernon

    Wealth Transfer Journal Article Year 2014

  3. Investing in children: Child Development Accounts as an early childhood intervention

    Child Development Accounts (CDAs)—specially designed accounts opened in children’s own names—are a preventive, economic intervention that can complement investments made by existing early childhood interventions and advance their mission of helping children reach their full potential. Poverty is an inhibitor of children’s opportunities for educational and economic advancement. Federal, state, and local governments have dedicated substantial resources to mitigating the effects of poverty. CDAs are a complementary strategy with great potential but one that is underutilized. The positive outcomes of CDA ownership and development can be supported by appropriate policy design and by providing appropriate, intentional preparation to children about their CDAs.

    Citation

    Friedline, T., & Schuetz, N. (2014). Investing in children: Child Development Accounts as an early childhood intervention. Washington, DC: New America Foundation.

    Authors

    Friedline, Terri, Schuetz, Nik

    Children's Savings Account Brief Year 2014

  4. Savings from ages 16 to 35: A test to inform Child Development Account policy

    This study examines savings from childhood to young adulthood with a sample of 14,223 individuals from the 1996 Survey of Income and Program Participation (SIPP). We employed a cohort sequential accelerated latent growth model that combined a series of cohorts to represent a common developmental trajectory spanning 19 years—ages 16–35—and accounted for relevant covariates. Descriptively, the proportions of savings account ownership increased steadily between ages 16 and 30 and then leveled off. In other words, a critical time for intervention may occur between ages 16 and 30 when the proportion of account ownership is increasing. Proportions of savings accumulation also rose steadily, with a mean low of $636 between ages 16 and 20 to a mean high of $1,160 between ages 31 and 35. Gender, race, employment status, and household income and net worth were associated with initial variability in savings at ages 16–20 and rate of change in savings over time through age 35. Results can inform policies and programs that open savings accounts for children as a way of helping them remain financially secure across their life course.

    Citation

    Friedline, T., & Nam, I. (2014). Savings from ages 16 to 35: A test to inform Child Development Account policy. Poverty & Public Policy, 6(1), 46–70.

    Authors

    Friedline, Terri, Nam, Ilsung

    Children's Saving Account / Financial Inclusion Journal Article Year 2014

  5. The independent effects of savings accounts in children’s names on their savings outcomes in young adulthood

    A question of interest in children’s savings research asks whether there are unique effects on children’s later savings when savings accounts are opened in their names earlier in life, either independently from and or simultaneously with accounts in which parents save on children’s behalf. Using longitudinal data from the Panel Study of Income Dynamics, this study created a combined measure of children’s (ages 12–19) and parents’ savings account ownership to predict savings outcomes in young adulthood (ages 20–25). All possible combinations of children’s and parents’ account ownership were significantly related to young adults’ savings account ownership; however, only children’s savings account ownership was significantly related to savings accumulation. Implications for the independent effects of savings accounts in children’s names are discussed.

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    Citation

    Friedline, T. (2014). The independent effects of savings accounts in children’s names on their savings outcomes in young adulthood. Journal of Financial Counseling and Planning, 25(1), 69–89.

    Authors

    Friedline, Terri

    Children's Saving Account / Financial Inclusion Journal Article Year 2014

  6. Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation

    Citation

    Friedline, T., Johnson, P., & Hughes, R. (2014). Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation? Federal Reserve Bank of St. Louis Review, 96(4), 359-389.

    Authors

    Friedline, Terri, Johnson, Paul, Hughes, Robert

    Children's Savings Account Journal Article Year 2014

  7. Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation

    Understanding the balance sheets of today’s young adults—particularly the factors that set them on a path to financial security through asset diversification and accumulation—lends some insight into the balance sheets they will have when they are older. This study uses panel data from the Census Bureau’s 1996 Survey of Income and Program Participation to investigate the acquisition of a savings account as a gateway to asset diversification and accumulation for young adults. Two avenues were considered: The first emphasized ownership of a diverse portfolio of financial products, and the second emphasized the accumulated value of liquid assets. Almost half of the surveyed young adults owned a savings account (43 percent) and approximately 3 percent acquired a savings account over the course of the panel. (Older, nonwhite, or unemployed participants were significantly less likely to acquire an account.) Those who owned or acquired a savings account also had more diverse asset portfolios. Evidence suggests that young adults who acquire a savings account and diversify their asset portfolios may also accumulate more liquid assets over time, which can be leveraged in the future to strengthen their balance sheets.

    Citation

    Friedline, T., Johnson, P., & Hughes, R. (2014). Toward healthy balance sheets: Are savings accounts a gateway to young adults' asset diversification and accumulation? Federal Reserve Bank of St. Louis Review, 96(4), 359-389.

    Authors

    Friedline, Terri, Johnson, Paul, Hughes, Robert

    Financial Inclusion Journal Article Year 2014

  8. Young people are the front lines of financial inclusion: A review of 45 years of research

    Amidst concerns about percentages of households that remain unbanked or underbanked, policy endeavors have emerged to promote financial inclusion by making financial products such as savings accounts readily available. While these endeavors have primarily concentrated on households, young people may be the front lines of financial inclusion because they may be more likely to be banked in young adulthood and beyond when they start off with savings accounts earlier in life. This article addresses young people's financial inclusion by comprehensively reviewing 60 research studies on young people's savings, discussing the role of the family in young people's financial inclusion, discussing financial inclusion from an institutional perspective, presenting policy implications, and identifying gaps in knowledge and opportunities for research. Policies that open savings accounts for young people early in life may be a promising strategy for extending financial inclusion and preventing unbanked or underbanked status later in life.

    Citation

    Friedline, T., & Rauktis, M. (2014). Young people are the front lines of financial inclusion: A review of 45 years of research. Journal of Consumer Affairs, 48(3), 535-602.

    Authors

    Friedline, Terri, Rauktis, Mary

    Financial Inclusion Journal Article Year 2014

  9. Accumulating assets, debts in young adulthood: Children as potential future investors

    Child Development Accounts (CDA) aim to open savings accounts in childhood as a way to lay a foundation for building assets in young adulthood and beyond. Mainstream banks may be key partners in opening the accounts in which children can build assets. While children may have limited savings to invest initially, they may increasingly invest over time by accumulating assets and debts through mainstream banks. Mainstream banks may benefit from children's increasing investments. This paper uses propensity score weighted, longitudinal data from the Panel Study of Income Dynamics and its supplements to examine savings, assets, debt, and net worth accumulation of young adults and whether or not they accumulate more when they have savings accounts as children. Young adults accumulate a median of $1000 in savings accounts, $4600 in total assets, $965 in debt (excluding student loans), and $4000 in net worth (excluding student loans). Young adults accumulate more savings and total assets when they have savings accounts as children. They accumulate less debt and more net worth when their households accumulate high net worth.

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    Citation

    Friedline, T., & Song, H. (2013). Accumulating assets, debts in young adulthood: Children as potential future investors. Children and Youth Services Review, 35(9), 1486–1502.

    Authors

    Friedline, Terri, Song, Hyun-a

    Children's Savings Account / Financial Inclusion Journal Article Year 2013

  10. Children as potential future investors: Accumulating assets, accumulating debts in young adulthood

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    Citation

    Friedline, T., & Song, H. (2013). Children as potential future investors: Accumulating assets, accumulating debts in young adulthood (Report II of III). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri, Song, Hyun-a

    Children's Savings Account Report Year 2013

  11. Children as potential future investors: Accumulating assets, accumulating debts in young adulthood

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    Citation

    Friedline, T., & Song, H. (2013). Children as potential future investors: Accumulating assets, accumulating debts in young adulthood (Report II of III). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri, Song, Hyun-a

    Financial Inclusion Report Year 2013

  12. Children as potential future investors: Connections with banking institutions and diverse asset portfolios in young adulthood

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    Citation

    Friedline, T., & Elliott, W. (2013). Children as potential future investors: Connections with banking institutions and diverse asset portfolios in young adulthood (Report I of III). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri

    Children's Savings Account Report Year 2013

  13. Children as potential future investors: Connections with banking institutions and diverse asset portfolios in young adulthood

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    Citation

    Friedline, T., & Elliott, W. (2013). Children as potential future investors: Connections with banking institutions and diverse asset portfolios in young adulthood (Report I of III). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri

    Financial Inclusion Report Year 2013

  14. Children as potential future investors: Do mainstream banks augment children's capacity to save

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    Citation

    Friedline, T. (2013). Children as potential future investors: Do mainstream banks augment children's capacity to save? (Report III of III). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri

    Children's Savings Account Report Year 2013

  15. Children as potential future investors: Do mainstream banks augment children's capacity to save

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    Citation

    Friedline, T. (2013). Children as potential future investors: Do mainstream banks augment children's capacity to save? (Report III of III). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri

    Financial Inclusion Report Year 2013

  16. Connections with banking institutions and diverse asset portfolios in young adulthood: Children as potential future investors

    A central hypothesis of Child Development Accounts (CDA) suggests that savings accounts in childhood lay a foundation for connecting to mainstream banking institutions and diversifying asset portfolios in young adulthood and beyond. While children may have limited savings to invest initially, they are financial actors who may increasingly invest money into different types of savings products over time. This paper uses propensity score weighted, longitudinal data from the Panel Study of Income Dynamics and its supplements to examine the types of financial and nonfinancial assets owned by young adults and whether or not they are more likely to own these assets when they have savings accounts as children. The most commonly owned assets in young adulthood included savings accounts (89%), vehicles (54%) and credit cards (51%). Smaller percentages owned stocks (9%), bonds (6%), and homes (8%). On average, young adults owned two to three different assets. Having savings accounts in childhood was associated with being two times more likely to own savings accounts, two times more likely to own credit cards, and four times more likely to own stocks in young adulthood, compared to not having savings accounts in childhood. Young adults' ownership of more total financial assets was also associated with having savings accounts in childhood. Findings provide some supporting evidence of demand for children's savings accounts. Policy endeavors that remove barriers to account ownership may be advantageous for children and mainstream banks.

    Citation

    Friedline, T., & Elliott, W. (2013). Connections with banking institutions and diverse asset portfolios in young adulthood: Children as potential future investors. Children and Youth Services Review, 35(6), 994-1006.

    Authors

    Friedline, Terri, Elliott III, William

    Children's Savings Account / Financial Inclusion Journal Article Year 2013

  17. Designated education accounts can lead students to college

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    Citation

    Friedline, T. (2013, January 8). Designated education accounts can lead students to college. The Chronicle of Higher Education.

    Authors

    Friedline, Terri

    Children's Savings Account Op-Ed Year 2013

  18. Evaluation of the 2011 GEAR UP Priority: Lessons Learned About Integrating CSAs within GEAR UP

    The federally funded Gaining Early Awareness and Readiness for Undergraduate Program (GEAR UP) is one of the most widely known U.S. programs which attempts to increase college enrollment and completion rates among disadvantaged students. GEAR UP has three main aims specifically targeted toward disadvantaged students historically underrepresented in higher education: (1) to increase academic performance and preparation for higher education, (2) to increase the rates of high school graduation and participation in higher education, and (3) to increase students’ and families’ knowledge of higher education options, including academic preparation and financing.

    In 2011, an invitational priority was announced by the Department of Education (DOE) that encouraged grant applicants to include financial access and Children’s Savings Accounts (CSAs) in their programming for students and their families. In a September press release, DOE announced 66 new GEAR UP grantees from the 2011 application cycle. Nineteen grantees were state entities and 47 were community-education partnerships.

    In 2012, researchers from the Assets and Education Initiative (AEDI) at the University of Kansas launched a multi-method evaluation of 2011 GEAR UP grantees who accepted the invitational priority. AEDI combed through the GEAR UP applications and identified 33 grantees that explicitly stated in their abstracts the intention to open CSAs and/or teach financial education to students and their families. Among these 33 grantees, 25 programs completed AEDI’s initial survey. AEDI selected five programs to participate in a follow-up survey and in-depth interviews and focus groups during on-site visits. The study aimed to answer four primary research questions: (1) How well prepared do GEAR UP programs perceive themselves to be for planning and implementing CSAs? (2) What steps have GEAR UP programs taken to plan and implement CSAs? (3) What obstacles have GEAR UP programs encountered? and (4) What strategies have GEAR UP programs used to overcome obstacles that they encountered?

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    Authors

    Friedline, Terri, Scanlon, Edward, Johnson, Toni, Lewis, Melinda

    Children's Savings Account Report Year 2013

  19. Family assets, postsecondary education, and students with disabilities: Building on progress and overcoming challenges

    Students with disabilities are increasingly enrolling and participating in two-year, four-year, and other institutions of higher education. Federal policies and initiatives addressing the educational needs of students and adults with disabilities provided impetus for these increases. For example, mandates within the Individuals with Disabilities Education Act (2004) have resulted in K-12 public schools increasingly preparing students for postsecondary education. Nonetheless, students with disabilities continue to face financial challenges as well as low educational expectations in their pursuit of postsecondary education. Family assets may provide a framework for addressing these challenges and provide specific implications for policy as well as educational practice.

    Citation

    Cheatham, G., Smith, S. J., Elliott, W., & Friedline, T. (2013). Family assets, postsecondary education, and students with disabilities: Building on progress and overcoming challenges. Children and Youth Services Review 35(7), pp. 1078-1086

    Authors

    Cheatham, Greg, Smith, Sean J., Elliott III, William, Friedline, Terri

    Children's Savings Account Journal Article Year 2013

  20. How CSAs facilitate saving and asset accumulation (Chapter 5 - Brief)

    Traditional theories of savings would lead observers to believe that low-income children are unlikely to accumulate any assets, given their limited incomes and their parents’ limited ability to transmit financial knowledge and skills. However, empirical evidence and institutional theory suggest that low-income children can indeed save and that crafting structures that can facilitate their saving—including Children’s Savings Accounts (CSAs)—may help savings to serve as a pathway to economic mobility for these disadvantaged youth.

    Related items: Briefs:

    From a Debt-Dependent to an Asset-Based Financial Aid Model Institutional Facilitation and CSA Effects CSAs As An Early Commitment Financial Aid Strategy From Disadvantaged Student to College Graduates: The Role of CSAs Designing for Success Investing In Our Future Children’s Savings Accounts and a 21st Century Financial Aid System Executive Summary

    Building Expectations, Delivering Results: Asset-Based Financial Aid and The Future of Higher Education Infographics

    College Savings Accounts: More Degrees, Less Debt The Role of Institutional Facilitation in Academic Success Reports

    Examining The Canadian Education Savings Program and Its Implications for U.S. Child Savings Accounts (CSA) Policy

    Citation

    Elliott, W, Friedline, T., and Kakatoi, S. (2013). How CSAs facilitate saving and asset accumulation (Chapter 5 - Brief). In W. Elliott (Ed.), Giving children a financial stake in college: Are CSAs a way to help maximize financial aid dollars? (Biannual Report for the Assets and Education Field). Lawrence, KS: Assets and Education Initiative.

    Authors

    Elliott III, William, Friedline, Terri, Kakoti, Sally

    Children's Savings Account Brief Year 2013

  21. Preliminary data on GEAR UP's invitational priority: Financial access and college savings accounts

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    Citation

    Friedline, T., & Elliott, W. (2013). Preliminary data on GEAR UP's invitational priority: Financial access and college savings accounts (Report I of IV). Lawrence, KS: University of Kansas, School of Social Welfare, Assets & Education Initiative.

    Authors

    Friedline, Terri

    Children's Savings Account Report Year 2013

  22. Probability of living through a period of economic instability

    Welfare Based on Assets, a Way to Smooth Out Economic Instability and Develop Children's Human Capital is a four-part series of reports that focuses on the relationship between economic instability (i.e., income shocks, asset shocks, home loss, and asset poverty) and children's human capital development. Collectively, these reports build on the compelling observation that the pattern low-income families walk into is a present time oriented or consumption based pattern of behavior; in contrast, the pattern higher income families walk into is future oriented or asset based. In this first paper we find that between 2005 and 2009 the probability of a low-income child living through an income shock is between 43% (major shock) and 55% (minor shock). In contrast, the chance of a high-income child experiencing an income shock is between 6% (major shock) and 15% (minor shock) during the same period. We also find that the probability that a child will experience a net worth asset shock close to doubles for a child living in a black or low-incom

    Citation

    Elliott, W., Nam, I., and Friedline, T. (2013). Probability of living through a period of economic instability. Children and Youth Services Review, 35(3), p. 453-460.

    Authors

    Elliott III, William, Nam, Ilsung, Friedline, Terri

    Wealth Transfer Journal Article Year 2013

  23. Small-dollar children’s savings accounts and children's college outcomes by race

    This is paper three of four in the Small-Dollar Children Accounts series that studies the relationship between children's small dollar savings accounts and college enrollment and graduation. The series uses different subsamples to examine three important research questions: (a) Are children with savings of their own more likely to attend or graduate from college? (b) Does dosage (no account, only basic savings, savings designated for school of less than $1, $1 to $499, or $500 or more) matter? And (c) is designating for school more predictive of college enrollment or graduation than having basic undesignated savings alone? Using propensity score weighted data from the Panel Study of Income Dynamics and its supplements we created multi-treatment dosages of savings accounts and amounts to answer these questions separately for black (n = 404) and white (n = 453) children. White children's savings are not significantly related to their college outcomes. Differently, compared to black children without savings accounts, black children are three times more likely to enroll in college when they have school savings of less than $1 and six times more likely when they have school savings of $1 to $499. Further, black children with school savings of $1 to $499 are four times more likely to graduate from college and black children with school savings of $500 or more are three-and-a-half times more likely to graduate from college, compared to those with no savings account. We suggest Child Development Accounts (CDAs) may be a promising tool for helping black children get to and through college.

    Citation

    Freidline, T., Elliott, W., and Nam, I. (2013). Small-dollar children’s savings accounts and children's college outcomes by race. Children and Youth Services Review, 35 (3), p. 548-559.

    Authors

    Friedline, Terri, Elliott III, Willaim, Nam, Ilsung

    Children's Savings Account Journal Article Year 2013

  24. Testing an asset-building approach for young people: Early access to savings predicts later savings

    A major hypothesis of asset-building is that early access to savings accounts leads to continued and improved educational and economic outcomes over time. This study asks whether or not young adults (ages 18-22) in 2007, particularly among lower income households, are significantly more likely to own savings accounts and to accumulate more savings when they have access to savings accounts at banking institutions as adolescents (ages 13-17) in 2002. We investigate this question using longitudinal data (low-to-moderate income sample [LMI; N = 530]; low-income sample [LI; N = 354]) from the Panel Study of Income Dynamics and its supplements. Results from propensity score weighting and bivariate probit estimates support this hypothesis. Asset-building policies that extend early access to savings accounts may improve savings outcomes for young people from lower income households, which hopefully affords them with the economic resources needed to lead productive and satisfying lives.

    Citation

    Friedline, T., Elliott, W., and Chowa, G. (2013). Testing an asset-building approach for young people: Early access to savings predicts later savings. Economics of Education Review, 33(1), pp. 31-51.

    Authors

    Friedline, Terri, Elliott III, William, Chowa, Gina A.N.

    Children's Savings Account / Financial Inclusion Journal Article Year 2013

  25. “You pay your share, we’ll pay our share”: The college cost burden and the role of race, income, and college assets

    Changes in financial aid policies raise questions about students being asked to pay too much for college and whether parents’ college savings for their children helps reduce the burden on students to pay for college. Using trivariate probit analysis with predicted probabilities, in this exploratory study we find recent changes in the financial aid system place a higher responsibility on African American, Latino/Hispanic, and moderate-income students to pay for college themselves. We also find when parents open a savings account, start a state-sponsored savings plan, or open a college investment fund students are less likely to pay for college with student contributions. Therefore, we suggest in addition to grants and scholarships, policies that encourage accumulation of savings for college among minority and lower income families may help reduce the college cost burden they experience.

    Citation

    Elliott, W. and Friedline, T. (2013). “You pay your share, we’ll pay our share”: The college cost burden and the role of race, income, and college assets. Economics of Education Review, 33(1), pp. 134-153.

    Authors

    Elliott III, William, Friedline, Terri

    College Debt Journal Article Year 2013