Terri Friedline

Predicting Savings From Adolescence to Young Adulthood: A Propensity Score Approach

This paper examines the progression of savings between adolescence and young adulthood. Using data from the Panel Study of Income Dynamics, we ask whether the likelihood of having a savings account in young adulthood and the amount of savings can be significantly predicted by two factors: having a savings account during adolescence and having parents who own assets. Descriptive statistics reveal that adolescents with savings accounts are more often White, employed, and live in households in which the head is married, has more education, and owns assets. Propensity score analyses confirm that young adults are more likely to have a savings account when they have a savings account as adolescents. Some evidence suggests that adolescents whose parents have savings on their behalf and have higher net worth are more likely to have higher amounts of savings as young adults. Findings suggest that parents play an important role in modeling saving habits for adolescents. Further, our findings suggest that having a savings account in adolescence leads to an increased likelihood of having a savings account in young adulthood; however, this finding requires confirmation in future research.

Transforming wealth: Using the inverse hyperbolic sine (IHS) and splines to predict youth’s math achievement

The natural log and categorical transformations commonly applied to wealth for meeting the statistical assumptions of research may not always be appropriate for adjusting for skewness given wealths unique properties. Finding and applying appropriate transformations is becoming increasingly important as researchers consider wealth as a predictor of well-being. We present an alternative transformation-the inverse hyperbolic sine (IHS)-for simultaneously dealing with skewness and accounting for wealths unique properties. Using the relationship between household wealth and youths math achievement as an example, we apply the IHS transformation to wealth data from US and Ghanaian households. We also explore non-linearity and accumulation thresholds by combining IHS transformed wealth with splines. IHS transformed wealth relates to youths math achievement similarly when compared to categorical and natural log transformations, indicating that it is a viable alternative to other transformations commonly used in research. Non-linear relationships and accumulation thresholds emerge that predict youths math achievement when splines are incorporated. In US households, accumulating debt relates to decreases in math achievement whereas accumulating assets relates to increases in math achievement. In Ghanaian households, accumulating assets between the 25th and 50th percentiles relates to increases in youths math achievement.

Preventive Policy Strategy for Banking the Unbanked: Savings Accounts for Teenagers?

Concern over percentages of unbanked and underbanked households in the United States and their lack of connectedness to the financial mainstream has led to policy strategies geared toward reaching these households. Using nationally-representative longitudinal data, a preventive strategy for banking households is tested that asks whether young adults are more likely to be banked and own a diversity of financial assets when they are connected to the financial mainstream as teenagers. Young adults are more likely to own checking accounts, savings accounts, certificates of deposit, and stocks when they had savings accounts as teenagers. Policy implications are discussed.

Coming Up Short: Family Composition, Income, and Household Savings

Objective: Existing research on savings and liquid-asset accumulation is largely quantitative and focuses on descriptions of how income inequality leads to the ability or inability to save. What has been left out of this body of research is an in-depth exploration of the role family composition may play in the way that households accumulate liquid assets. The purpose of this research is to understand how lower and higher income single- and two-parent families characterize reasons for saving, obstacles to saving, and strategies to save. Method: A diverse sample of 42 parents of kindergarteners were asked questions about household saving at 2 time points. Results: Compared to other family types, lower income single mothers report little savings and aspirations toward very short-term savings horizons as a result of persistent income shortfalls. Unlike two-parent households, lower-income single mothers discussed their reasons for avoiding mainstream financial institutions and opting to use cash instead. Conclusions: To alleviate economic inequality and improve households’ ability to withstand financial volatility, social work practice and policy should consider implementing interventions that are responsive to the unique experiences of poverty by family composition.

The Potential for Savings Accounts to Protect Young-Adult Households from Unsecured Debt in Periods of Macroeconomic Stability and Decline

The effects of different types of debt can vary widely: some debt is considered productive by advancing financial health, while other debt can be unproductive, pushing financial health out of reach. A savings account may be associated with young-adult households’ reduced reliance on unproductive debt and their increased access to productive debt that can facilitate wealth building. This article tests the association between a savings account and debt in the lives of American young adults during periods of macroeconomic stability and decline. Owning a savings account in 1996 was associated with a 14 percent decrease (

Educational and Financial Institutions Partnering to Implement CSAs: Evaluation of Financial Partners’ Perspectives from the 2011 GEAR UP Invitational Priority

844) in young-adult households’ accumulated unsecured debt, while closing an account in 2008 was associated with a 12 percent increase (

Taking stock of ten years of research on the relationship between assets and children's educational outcomes: Implications for theory, policy and intervention

1,320) in this type of debt. Thus, a savings account may help young adults invest in their debt by entering better, healthier credit markets and protecting them from riskier ones, especially during bad economic times.

Math Achievement and Children’s Savings: Implications for Child Development Accounts

Educational and financial institutions are increasingly partnering to open Children’s Savings Accounts (CSAs); however, little is known about these partnerships’ effectiveness for planning and implementing CSAs. A 2011 invitational priority from the Department of Education encouraged partnerships between Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) programs and financial institutions to open CSAs for low-income students, which provided an opportunity to evaluate these partnerships. In-depth interviews with 10 personnel from 6 financial institutions who partnered with 4 GEAR UP programs revealed that partnerships with stakeholders, time spent on planning, and strategies for overcoming barriers were important for implementing CSAs. Lessons for practice and policy are discussed.