Savings of Young Parents

47 Pages Posted: 26 Dec 2000

See all articles by Ricardo Cossa

Ricardo Cossa

Charles River Associates

Erin L. Krupka

affiliation not provided to SSRN

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Date Written: December 2000


In this paper, we examine household savings using data from the National Longitudinal Survey, Cohort 1997 (NLSY97). This data set provides detailed information about assets and liabilities of parents with teen-age children and allows researchers to examine patterns of accumulation at early stages of the life cycle. In our empirical work, we have first to deal with several problems in measuring wealth. While many respondents report owning assets and liabilities, they often do not report their values. This problem is severe, in particular among financial assets. It is also difficult to devise an appropriate measure of accumulation when examining young parents, since assets and liabilities display different degrees of liquidity. To get around the non-response problem, we impute the missing values for assets and liabilities. This allows us to calculate household wealth for the whole sample. We examine household wealth holdings by considering several measures of accumulation: total (non-pension) net worth, financial net worth, and retirement savings. We study their distribution across different demographic groups and show that many households, in particular those headed by young parents (younger than 35), minorities, and individuals with low educational attainment, display very little accumulation. Many have no financial assets and their total net worth is also low. Housing equity is the main asset in many household portfolios and often the only asset families own. Overall, there is much heterogeneity in wealth holdings not only across but also within demographic groups. This suggests that many factors are at play in shaping the wealth accumulation of parents with young children.

Keywords: Wealth, Motives to Save, Parents with Teenage Children

JEL Classification: D31, D91

Suggested Citation

Cossa, Ricardo D. and Krupka, Erin L. and Lusardi, Annamaria, Savings of Young Parents (December 2000). FRB of Chicago Working Paper No. 00-23. Available at SSRN: or

Ricardo D. Cossa

Charles River Associates ( email )

Chicago, IL
United States
312-619-3303 (Phone)

Erin L. Krupka

affiliation not provided to SSRN

Annamaria Lusardi (Contact Author)

George Washington University - Department of Accountancy ( email )

George Washington University School of Business
Washington, DC 20052
United States


National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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