Publication year: 2011
Source: Children and Youth Services Review, Available online 21 September 2011
Terri Friedline
Parents transfer many forms of advantage to children based on their financial resources. Of interest is whether parents transfer educational and financial advantages and whether this occurs early in life. This paper examines financial advantage by asking whether children’sownsavings—apart from that of their parents—can be predicted by a separate measure of parents’ savings for their child. This study predicts children’s basic and college savings at ages 12 to 15 with separate samples from low-to-moderate- (LMI;N = 333) and high-income (HI;N = 411) households using Panel Study of Income Dynamics and Child Development Supplement data. Propensity score weighting and logistic regression results find that parents’ savings for their child is significant in both household types. Given this, policies that aim to include children in savings may help reduce transfers of financial advantage and, ultimately, educational advantage.
Highlights
► This study predicts children’s own savings, separate from savings held by parents, at ages 12 to 15. ► Longitudinal data from the Panel Study of Income Dynamics and Child Development Supplement is used. ► Descriptively, gaps in children’s savings exist along class lines. ► Children are significantly more likely to have their own savings when their parents have savings. ► Children whose parents have savings enjoy a financial advantage and early opportunities to save.