Asset Building Financial Inclusion Working Paper

Two Accounts for Why Adolescent Savings Is Predictive of Young Adult Savings: An Economic Socialization Perspective and an Institutional Perspective

Economic socialization and the institutional theory of saving offer different accounts for why adolescents’ savings predicts savings in young adulthood. Economic socialization theory emphasizes the role that the family plays in whether or not youth develop a future time orientation and a habit of saving. Conversely, an institutional theory is built on the premise that acquisition of financial knowledge and resources are strongly influenced by structural failures related to social class and race. Using longitudinal data (N = 694) from the Panel Study of Income Dynamics (PSID) and its supplements, this paper asks whether having savings as an adolescent (ages 13 to 17) predicts having savings as a young adult (ages 18 to 22). Policy implications are discussed using both approaches and conclusions are drawn about how the approaches can be combined to create a saving intervention for adolescents.


Elliott, W., III, Webley, P., & Friedline, T. (2011). Two accounts for why adolescent savings is predictive of young adult savings: An economic socialization perspective and an institutional perspective (CSD Working Paper No. 11-34). St. Louis, MO: Washington University, Center for Social Development.