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

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  • Friedline, Terri
  • Elliott, William
  • Chowa, Gina A.N.
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    Abstract

    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 33 (2013)
    Issue (Month): C ()
    Pages: 31-51

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    Handle: RePEc:eee:ecoedu:v:33:y:2013:i:c:p:31-51

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    Web page: http://www.elsevier.com/locate/econedurev

    Related research

    Keywords: Economic development; Educational economics; Educational finance; Human capital;

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    References

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    1. Brian K. Bucks & Arthur B. Kennickell & Kevin B. Moore, 2006. "Recent changes in U.S. family finances: evidence from the 2001 and 2004 Survey of Consumer Finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Mar, pages A1-A38.
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    Cited by:
    1. Friedline, Terri & Elliott, William, 2013. "Connections with banking institutions and diverse asset portfolios in young adulthood: Children as potential future investors," Children and Youth Services Review, Elsevier, vol. 35(6), pages 994-1006.
    2. Elliott, William & Sherraden, Michael, 2013. "Assets and educational achievement: Theory and evidence," Economics of Education Review, Elsevier, vol. 33(C), pages 1-7.

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