Saving for the Future

Trends, Patterns and Decision-Making Processes Among Young Americans

by Sarah Outcault

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This dissertation explores financial decision-making and outcomes among young adults in the United States in order to inform policies that promote saving and financial security. The study presents a five-phase conceptual model of the financial decision-making process and describes the influence of individual-level and environmental factors. Following the model, three empirical studies are presented. The first describes how financial portfolios have changed over the last five decades and finds that wealth, inequalities and financial risk have risen among young households. The second empirical study applies statistical and network analysis techniques to describe patterns in financial portfolios, finding that young households accumulate financial accounts in a particular order in accordance with emergence of financial needs over the life course. The third empirical study describes the process by which young adults save for the future, using data collected from a series of semi-structured interviews. Together, the findings of all three empirical studies suggest that despite large variations in outcome, the process by which young adults build their financial portfolios is largely the same.

Table of Contents

  • Chapter One


  • Chapter Two

    Overview and background

  • Chapter Three

    Trends in financial outcomes among young adults in the U.S.

  • Chapter Four

    Analyzing the patterns in financial account-holding among young Americans: A network analysis approach

  • Chapter Five

    The process of saving money

  • Chapter Six

    Synthesis of key results

  • Chapter Seven

    Policy implications

  • Appendix A

    Technical Appendix for Chapter 3

  • Appendix B

    Technical Appendix for Chapter 4

  • Appendix C

    Technical Appendix for Chapter 5

Research conducted by

This document was submitted as a dissertation in June 2012 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Gery Ryan (Chair), Joanne Yoong, and Angela Hung.

This report is part of the RAND Corporation Dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

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