Teaching Children to Save: What is the Best Strategy for Lifetime Savings?
38 Pages Posted: 19 Nov 2013 Last revised: 2 May 2015
Date Written: October 1, 2013
Abstract
We study the effect of alternative parental teaching strategies on the propensity to save and the amount saved during adulthood. Using a panel dataset from the Dutch DNB Household Survey we find that parental teaching to save increases the likelihood that an adult will save by 16%, and the saving amount by about 30%. The best strategy involves a combination of different methods (giving pocket money, controlling money usage, and giving advice about saving and budgeting). The effect of parental teaching is persistent with age, but decays at elder age for the propensity to save.
Keywords: saving, teaching to save, children, pocket money
JEL Classification: J13, D12
Suggested Citation: Suggested Citation
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