Center on Assets, Education, and Inclusion

  1. 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

  2. Smart Way to Save for College

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    Citation

    Cartwright, M. and Lewis, M. (June 10, 2014). Smart Way to Save for College. The Hill.

    Authors

    Cartwright, Matt, Lewis, Melinda

    Children's Savings Account Op-Ed Year 2014

  3. Solving the paradox of high college expectations: The role of children’s savings accounts

    Citation

    Elliott, W. (2014). Solving the paradox of high college expectations: The role of children’s savings accounts. In R. Cramer & T. Williams Shanks (Eds.), The assets perspective: The rise of asset building and its impacts on social policy. New York, NY: Palgrave MacMillan.

    Authors

    Elliott III, William

    Children's Savings Account Chapter Year 2014

  4. Student loan debt: Can parent's college savings help?

    Postsecondary education costs in the United States today are rising with an increasing shift from societal responsibility to individual burden, thereby driving greater student borrowing. Evidence suggests that (i) such student debt may have undesirable educational effects and potentially jeopardize household balance sheets and (ii) student loans may better support educational attainment and economic mobility if accompanied by other, non-repayable financial awards. However, given declines in need-based aid and falling state support for postsecondary costs, policymakers and parents alike have failed to produce a compelling complement to debt-dependent financial aid that is capable of improving outcomes and forestalling assumption of ever-increasing student debt for a majority of U.S. households. This article, which relies on longitudinal data from the Educational Longitudinal Study, finds parental college savings may be an important protective factor in reducing debt assumption. However, several other factors increase the likelihood students will borrow: perceiving financial aid as necessary for college attendance, expecting to borrow to finance higher education, having moderate income, and attending a for-profit college. After controlling for student and school variables, the authors find that parental college savings increase a student’s chance of accumulating lower debt (less than $2,000) compared with students lacking such savings. Policy innovations to increase parental college savings—such as children’s savings accounts—could be an important piece of the response to the student debt problem in the United States.

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    Citation

    Elliott, W., Lewis, M., Nam, I., & Grinstein-Weiss, M. (2014). Student loan debt: Can parent's college savings help? Federal Reserve Bank of St. Louis, Review, 96 (4), 331-57.

    Authors

    Elliott III, William, Lewis, Melinda, Nam, Ilsung, Grinstein-Weiss, Michal

    College Debt Journal Article Year 2014

  5. Student loans: Are we getting our money’s worth?

    Citation

    Elliott, W. (2014). Student loans: Are we getting our money’s worth? Change: The Magazine of Higher Education, 46(4), 26-33.

    Authors

    Elliott III, William

    College Debt Journal Article Year 2014

  6. The American dream and moving up

    Citation

    Elliott, W. (February, 2014). Op-Ed. The American dream and moving up. Spotlight on Poverty and Opportunity.

    Authors

    Elliott III, William

    Wealth Transfer Op-Ed Year 2014

  7. The effect of wealth inequality on higher education outcomes: A critical review.

    American society reflects considerable class immobility, much of which may be explained by the wide gaps in college completion rates between economically advantaged and disadvantaged groups of students. First, we discuss the factors that lead to unequal college completion rates and introduce assets as an explanation often ignored by stratification scholars. We then discuss how a legacy of wealth inequality has led to wealthy students having an advantage at the financial aid bargaining table over low-income and minority students. We conclude by discussing how asset-building policies such as children’s savings accounts offer a potential policy strategy to alter the distributional consequences of the current financial aid system and help level the playing field.

    Citation

    Rauscher, E. and Elliott, W. (2014). The effect of wealth inequality on higher education outcomes: A critical review. Sociology Mind, 4, 282-297.

    Authors

    Rauscher, Emily, Elliott III, William

    Wealth Transfer Journal Article Year 2014

  8. 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

  9. The Student Loan Problem in America: It is Not Enough to Say, "Students Will Eventually Recover"

    According to Shapiro, the American Dream “is the promise that those who work equally hard will reap roughly equal rewards” (Shapiro, 2004, p. 87); that is, the American Dream holds that this country is a meritocracy where effort and ability are the primary determinants of success. Institutions provide the economic conditions that make it possible for people to believe that their hard work and ability will determine their success or failure. This task is facilitated by Americans’ strong desire to feel as though their destiny can be controlled and that institutions will ‘echo’ their own contributions, rather than work against them.1 Primed to look for evidence of this ‘effort plus ability equals outcomes’ equation, Americans cling to this ideal, even as it recedes in reality for many. There is no evidence that Americans today are less capable or less committed than in previous generations, in the aggregate. Instead, particularly in today’s highly specialized, technology driven, global world, the upward mobility that animates the American Dream is only possible if effort and ability are combined with institutional might.

    Related items: Briefs

    Student Loan Debt Threatens Household Balance Sheets Status Quo: Divergent Financial Aid Systems Yield Disparate Outcomes High-Dollar Student Debt May Compromise Educational Outcomes Before College: Building Expectations and Facilitating Achievement Executive Summary

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Infographics

    Today: Two Paths To Higher Ed Student Loan Debt: Consequences Tomorrow . . . And For Years to Come Reports

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity Unequal Outcomes: Student Loan Effects on Young Adults’ Net Worth Accumulation

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    Citation

    Elliott, W. and Lewis, M. (2014). The student loan problem in America: It is not enough to say, “students will eventually recover.” Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William, Lewis, Melinda

    College Debt Report Year 2014

  10. 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

  11. 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

  12. Unequal Outcomes: Student Loan Effects on Young Adults' Net Worth Accumulation

    Most people do not dream of going to college and becoming rich; that is, higher education is, for most, a path to the American Dream of middle-class financial security and upward mobility, not a perceived ticket to great riches. Generally, when people dream of being rich, they think of being a professional athlete, an actor, a singer, or entrepreneur, or winning the lottery. People may dream of getting rich, but it is not this illusion of quick fortune that animates individual actions nor characterizes the American ideal. Instead, Americans expect and work toward the opportunity to become middle-class through education, and it is this promise that underscores our vision of ourselves and our presumed ‘contract’ with the institutions that govern U.S. society. In recognition of the role that educational attainment plays in opening the door to this archetypal middle-class ideal, U.S. policy decided some time ago that children’s work would be school work. Children and their parents believe that the reward for innate intellectual ability and expended academic effort will be a chance to reach, not ease and opulence, but security and upward progress. U.S. policy affirms that education is the primary path for achieving the American Dream. Therefore, quick climbs from rags to riches are presumed to be quixotic, fleeting, and not necessarily even desirable. In contrast, the denial of a fair shot to enter and stay in the middle class through education imperils the foundation on which our collective identity rests and threatens to rewrite the American narrative of ‘success’ through effort and ability, mediated through attainment of education.

    Related items: Briefs

    Student Loan Debt Threatens Household Balance Sheets Status Quo: Divergent Financial Aid Systems Yield Disparate Outcomes High-Dollar Student Debt May Compromise Educational Outcomes Before College: Building Expectations and Facilitating Achievement Executive Summary

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Infographics

    Today: Two Paths To Higher Ed Student Loan Debt: Consequences Tomorrow . . . And For Years to Come Reports

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover”

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    Citation

    Elliott, W., Lewis, M., Johnson, P. (2014). Unequal outcomes: Student loan effects on young adults’ net worth accumulation. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William, Lewis, Melinda

    College Debt Report Year 2014

  13. 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

  14. Accounts, assets, expectations, and achievements: How Child Development Accounts may increase college success

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    Citation

    Beverly, S. G., Elliott, W., & Sherraden, M. (2013). Accounts, assets, expectations, and achievements: How Child Development Accounts may increase college success (CSD Perspective 13-27). St. Louis, MO: Washington University, Center for Social Development.

    Authors

    Beverly, Sondra G., Sherraden, Michael

    Children's Savings Account Perspective Year 2013

  15. 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

  16. Are Student Loans are Widening the Wealth Gap: Time to Focus on Equity

    According to Dr. Thomas Shapiro, the American dream “is the promise that those who work equally hard will reap roughly equal rewards” (Shapiro, 2004, p. 87). Higher education is widely regarded as a vehicle for sustaining this dream. This belief in the potential of education to act as an equalizer is supported by research, which consistently shows that a person who attains a four-year college degree earns more than a person who does not attain a four-year degree. Indeed, there is considerable evidence that educational achievement is the primary way that Americans born in poverty may leave it. Stories of those who escape poverty through education serve to support a reassuring narrative: providing access to higher education is all that is needed to keep the American dream vibrant.

    There have always been holes in this vision of American success, but today more than ever, higher education’s role as a force for equity has deteriorated, such that college may serve more to perpetuate the status quo than to create ladders of opportunity. Tracing and naming the factors that contribute to the erosion of higher education’s equalizing role is an essential step in reinvigorating the American dream. Uncovering those factors begins with an honest conversation about student debt.

    Related items: Briefs

    Student Loan Debt Threatens Household Balance Sheets Status Quo: Divergent Financial Aid Systems Yield Disparate Outcomes High-Dollar Student Debt May Compromise Educational Outcomes Before College: Building Expectations and Facilitating Achievement Executive Summary

    The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Infographics

    Today: Two Paths To Higher Ed Student Loan Debt: Consequences Tomorrow . . . And For Years to Come Reports

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Unequal Outcomes: Student Loan Effects on Young Adults’ Net Worth Accumulation

    Read Publication

    Authors

    Elliott III, William, Lewis, Melinda

    College Debt Executive Summary Year 2013

  17. As I see it – Declaring a new war on poverty

    Citation

    Elliott, W. (November, 2013). Op-Ed. As I see it – Declaring a new war on poverty. Kansas City Star/joco 913.

    Authors

    Elliott III, William

    Wealth Transfer Op-Ed Year 2013

  18. Assets and educational achievement: Theory and evidence

    This special issue of Economics of Education Review explores the role of savings and asset holding in post-secondary educational achievement. Most college success research has focused on income rather than assets as a predictor, and most college financing policy has focused on tuition support and educational debt, rather than asset accumulation. Nevertheless, there is compelling evidence that household asset holdings, especially savings for education, may have a pronounced positive influence, independent from income, in post-secondary educational success. Moreover, the fundamental reality is that savings plays a role, even though sometimes small, in college financing for most households. For these empirical and practical reasons, it may be important to pay greater attention to savings and asset holding for education in the future than we have in the past. The articles in this volume contribute empirical evidence, theoretical understanding, and potential policy directions regarding saving, asset holding, and educational achievement.

    Authors

    Sherraden, Michael

    Children's Savings Account Journal Article Year 2013

  19. Before College: Building Expectations and Facilitating Achievement

    By giving students and families a clear strategy for how to overcome cost barriers, college savings increase the likelihood of enrollment. The prospect of significant borrowing, on the other hand, does little to orient students towards college as a likely part of their futures.

    Even small levels of savings make enrollment more likely. Specifically, 45% of low or moderate-income students with no account, 71% with more than $1 of school savings, and 72% of students with school savings of $500+ enroll in college.

    On the longer-term challenge of equipping students to succeed, CSAs also show promise, largely through reinforcing a college-saver identity (expects to graduate and sees savings as a strategy for paying for college) that increases engagement and builds expectations.

    Conversely, going through school without assets can compromise achievement. Spells of asset poverty prior to age 11 have a particularly negative effect on academic achievement.

    Related items: Briefs

    Student Loan Debt Threatens Household Balance Sheets Status Quo: Divergent Financial Aid Systems Yield Disparate Outcomes High-Dollar Student Debt May Compromise Educational Outcomes Executive Summary

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Infographics

    Today: Two Paths To Higher Ed Student Loan Debt: Consequences Tomorrow . . . And For Years to Come Reports

    Student Loans are Widening The Wealth Gap: Time to Focus on Equity The Student Loan Problem in America: It is Not Enough to Say, “Students Will Eventually Recover” Unequal Outcomes: Student Loan Effects on Young Adults’ Net Worth Accumulation

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    Authors

    Elliott III, William, Lewis, Melinda

    College Debt Brief Year 2013

  20. Building expectations, delivering results: Asset-based financial aid and the future of higher education

    The price of higher education has increased dramatically in recent decades as higher education financing has shifted from a collectively funded public good to reliance on individual and family contributions. This cost burden has implications for education’s ability to serve as an equalizing force in the U.S., but asset-based financial aid models may have the potential to transform our financial aid system. While high student loan debt may hinder college completion and even serve as a deterrent to enrollment among some disadvantaged students, promoting asset development may reduce the need for loans and improve educational outcomes. Policies that combine smaller student loans with asset-based approaches could create a financial-aid model that builds college readiness among low-income students, improves their access to college, and increases their chances of success in higher education and of financial security post-graduation.

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    Institutional Facilitation and CSA Effects CSAs As An Early Commitment Financial Aid Strategy From Disadvantaged Student to College Graduates: The Role of CSAs How CSAs Facilitate Saving and Asset Accumulation 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

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

    Citation

    Elliott, William (Ed.), (2013). Building expectations, delivering results: Asset-based financial aid and the future of higher education. In Biannual report on the assets and education field. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Elliott III, William

    Children's Savings Account Brief Year 2013

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

    The Biannual Report on the Assets and Education Field, Building Expectations, Delivering Results, brings together a wide body of research to demonstrate the potential that CSAs have for transforming the way that students pay for, and prepare for, college. By changing the timing of aid delivery and strengthening household finances in the years leading up to college, an asset-based financial aid system need not cost more than our current system, either. This transformation could, in turn, restore the promise of economic mobility for a generation of talented but disadvantaged young people.

    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 How CSAs Facilitate Saving and Asset Accumulation Designing for Success Investing In Our Future Children’s Savings Accounts and a 21st Century Financial Aid System ​Infographics

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

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

    Citation

    Assets and Education Initiative. (2013). Building Expectations, Delivering Results: Asset-Based Financial Aid and the Future of Higher Education. In W. Elliott (Ed.), Biannual report on the assets and education field. Lawrence, KS: Assets and Education Initiative (AEDI).

    Authors

    Rauscher, Emily

    Children's Savings Account Report Year 2013

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

    American society reflects considerable class immobility, much of which is due to the wide gap in college completion rates between advantaged and disadvantaged groups of students. In the introduction we discuss the factors that cause unequal college completion rates, introduce assets as an explanation stratification scholars often ignore, and then outline the remainder of this report.

    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 How CSAs Facilitate Saving and Asset Accumulation 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

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    Authors

    AEDI

    Children's Savings Account Executive Summary Year 2013

  23. Can CSAs help resolve the expectation-attainment paradox? Developing a college-saver identity in children

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    Citation

    Elliott, W. (2013). Can CSAs help resolve the expectation-attainment paradox? Developing a college-saver identity in children (CSD Fact Sheet 13-30). St. Louis, MO: Washington University, Center for Social Development.

    Authors

    Elliott III, William

    Children's Savings Account Fact Sheet Year 2013

  24. 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

  25. 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