Center on Assets, Education, and Inclusion

This paper explores predictors of young adults’ savings using propensity score analysis and logistic regression with separate, longitudinal samples of whites and blacks aged 17–23 from the Panel Study of Income Dynamics. We ask who saves among adolescents and young adults and whether the likelihood of having a savings account and the amount saved in young adulthood can be predicted by two factors: (1) having a savings account during adolescence and (2) having families who own assets. The majority of white (90%) and black (64%) young adults had savings; however, blacks saved about 3% the amount saved by whites, suggesting that young adults’ savings may be patterned after disparities in the distribution of assets and families may transfer a financial advantage to young adults. Logistic regression results find that among whites, future orientation was a significant predictor of having a savings account in young adulthood. A notable trend level finding was that white young adults were more likely to have a savings account when they had a savings account as adolescents. Among blacks, academic achievement and household size were significant predictors of having a savings account in young adulthood. If confirmed in future research, findings suggest that Children’s Development Accounts may be one way to reduce racial disparities in savings by intervening at a young age and providing universal accounts to improve savings across the life course.

This paper examines the progression of savings between adolescence and young adulthood. Using data from the Panel Study of Income Dynamics, we ask whether adolescents with a savings account and parents who have assets significantly predict having a savings account and the amount saved in young adulthood. Descriptive statistics reveal that adolescents have savings accounts more often when they are White, employed, and live in households where the head is married, has more education, and owns assets. Propensity score analyses provide evidence confirming that adolescents with savings accounts are more likely to have savings accounts as young adults. There is some evidence to suggest that adolescents whose parents have savings on their behalf and higher net worth are more likely to have more saved as young adults. Findings suggest that parents may play an important role in modeling saving habits to adolescents. Furthermore, if our findings regarding adolescents’ savings accounts are confirmed in future research, this study suggests that having a savings account in adolescence may lead to an increased likelihood of having a savings account in young adulthood.

Recent findings using traditional regression methods show that children's savings designated for school are associated with higher math scores. We build on this research by using Hierarchical Linear Modeling (HLM) to confirm that children with school savings have higher math scores than those without school savings. Moreover, we suggest children's school savings may have a stronger association with children's math scores than with either household wealth or children's savings not designated for school. Further, we find evidence that children's school savings mediates the relationship between household wealth and math scores. Policy implications for children living in low-wealth households are discussed.

National and international reports have established the legitimate use of child savings accounts (CSAs) as asset-building vehicles for youths. However, many U.S. programs report difficulty in recruiting parents for CSA programs and note the failure of some parents to take full advantage of the financial match available when they do participate. This article reports some of the findings from a mixed-method study that examines a group of African American parents' involvement with a U.S. child savings account program known as Saving for Education, Entrepreneurship, and Downpayment (SEED). The elements that parents perceive to be critical to a CSA program are identified and those elements are then examined as they relate to the SEED program. Analyses revealed six themes where elements that parents identified as important were also elements that were frequently demonstrated in the SEED program. However, the study uncovered serious challenges encountered by the SEED staff and lessons learned in the process. Findings present information that may help increase African American-American parent involvement in CSAs and other asset-building programs.

Increasingly, college graduation is seen as a necessary step toward achieving the American Dream. However, large disparities exist in graduation rates. For many families, the current family income is not enough to finance college. Therefore, many young adults have to rely on education loans, which may be difficult to repay, leaving them strapped with debt after leaving college. This study examines the potential role of assets and savings for promoting college progress among young adults. Overall, findings suggest that policies, such as Child Development Accounts (CDAs), that help parents and youth accumulate savings--especially savings for college--may increase college attendance and graduation completion rates.

This paper has two main goals. First, we provide a review of 34 studies on the relationship between assets and children's educational attainment. Second, we discuss implications for Child Development Accounts (CDAs) policies. CDAs have been proposed as a potentially novel and promising asset approach for helping to finance college. More specifically, we propose that CDAs should be designed so that, in addition to promoting savings, they include aspects that help make children's college-bound identity salient, congruent with children's group identity, and that help children develop strategies for overcoming difficulties.

This study has three goals: (1) to provide an extensive review of research on the assets/expectation relationship, (2) to provide a conceptual framework for how children's savings effects children's college-bound identity (children's college expectations are a proxy for children's college-bound identity), and (3) to conduct a simultaneous test of whether owning a savings account leads to college-bound identity or college-bound identity lead to owning a savings account using path analytic technique with Structural Equation Modeling (SEM). Our review reveals asset researchers theorize about college-bound identity in two distinct but compatible ways: college-bound identity as a "linking mechanism", and college-bound identity as a mediator. However, there has been little theoretical development on the attitudinal effects of assets. In this study, we posit a conceptual framework for how children's savings affects children's college-bound identity. Findings from the simultaneous test of the assets/college-bound identity relationship suggest that savings has modest effect on college-bound identity and vice versa. A policy implication is that asset building policies that seek to build children's college-bound identity in addition to their savings may be more effective than policies that only seek to build children's savings.

Despite the importance of higher education, Hispanic immigrant youth still have far lower college attainment rate than whites in the U.S. Existing studies show the significant role of household assets on educational attainment even after controlling for income. Thus, this study examines the role of homeownership and school savings on Hispanic immigrant youth's college attendance and graduation. Findings show that homeownership is a significant positive predictor of Hispanic immigrant youth's college attendance and graduation, but parent school savings is not a significant predictor. Policy and practice implications discussed.