The saving behaviour of children: analysis of British panel data

Summary

We explore the influences on the saving behaviour of children aged 11 to
15 using panel data drawn from the British Household Panel Survey Youth
Questionnaire. Our empirical findings suggest that parental
allowances/pocket money exert a moderating influence on the probability
that a child will save, whilst hours of paid work undertaken by the
child are positively associated with the probability that a child will
save. The saving behaviour of parents, however, does not appear to
influence the saving behaviour of their offspring. In contrast,
financial optimism on the part of parents does appear to lower the
probability that their children will save. In addition, our empirical
analysis reveals some interesting differences relating to the
determinants of the saving behaviour of boys and girls as well as
evidence of state dependence in the saving behaviour of children.