Linking Savings to Youth Development: What Matters?

New work from the University of North Carolina uses analysis
of treatment youth in YouthSave’s Ghana Experiment to identify demographic and
behavioral factors that differentially characterize youth with more positive
development outcomes. Although this analysis cannot establish causality, the
data indicate that youths’ age, household living conditions, and the amount of
money they reported belonging to them at baseline were the three
characteristics most associated with positive or negative outcomes on a range
of dimensions. In terms of behavior, while simply opening an account was
associated with some positive youth development outcomes, opening and
depositing was associated with a greater number of such outcomes.

Youth from households with better living conditions did
better than those with poorer living conditions on indicators including
commitment to school, future orientation, and parental connection. This was
true despite the fact that youth living in the best conditions were 58% less
likely to deposit into the savings account
under study, than youth in the worst conditions. The positive associations
between better living conditions and youth development outcomes were consistent
across age, gender, geographical location and asset ownership.

In addition, youth with more money that belonged to them at
baseline had more positive outcomes than youth with less money, across age groups,
living conditions, and geographic locations. (“Money that belonged to youth”
was defined as the amount of money in a youth’s possession, regardless of where
the money was stored or whether or not it was considered savings.) In terms of
financial capability, youth with more money at the outset had higher savings
and were more likely to open a savings account, to make deposits in their
accounts, to save regularly, and to have savings goals. Similarly, having more
money was associated with desirable youth development outcomes, such as higher
level of future orientation and healthier parent-youth relationships.  

Age showed a split trend, positively associated with
financial capability but negatively associated with other youth development
outcomes. Among treatment youth in the Ghana experiment, compared to younger
youth, older youth both experienced more increase in money belonging to them
and saved more (two different variables in the research). Conversely, older
youth experienced lower scores for commitment to school and orientation toward
success, and higher uncertainty for the future, compared to younger youth.

Finally, more positive outcomes were associated with usage
(i.e., opening + depositing) than access alone (i.e., opening accounts only). This
was true for financial capability outcomes (money that belongs to youth,
savings amount) and youth development outcomes (orientation toward success,
commitment to school, academic planned effort). Only one outcome was positively
associated with opening an account alone: lower uncertainty of the future.

These findings suggest factors to consider in determining
which populations of youth might most benefit from savings programs and
policies, which would need additional supports, and of which kind. The apparent
influence of material circumstances at both the household and youth levels,
plus the greater benefits accrued by youth who not only opened but deposited
into their accounts, suggest that in addition to providing information and
tools to encourage youth to engage in desirable savings behaviors, youth
livelihoods interventions should offer opportunities that allow poor youth to
access additional financial resources. A multi-level approach that provides new
knowledge, increases motivation, and builds tangible resources may lead to more
meaningful impacts on youth financial capability and development. Findings also
suggests these types of additional supports may be particularly important to
provide for maturing adolescents, in order to ensure that their outlook on the
future stays positive.

By Rani Deshpande, Gina Chowa, and Rainier Masa