Association for Public Policy Analysis & Management

Background: Early savings and asset accumulation strategies are increasingly becoming recognized as potential tools to promote youth development in resource-limited countries. However, the paucity of evidence of a causal relationship between early savings and developmental outcomes such as educational, psychosocial, health, and financial well-being remains a critical gap. Research on the real impacts of asset holding among young people is still in the early stages of development. In resource-limited countries, the few empirical studies on youth savings have been limited to research designs that do not allow for adequate testing of potential causal relationships. In response to these knowledge gaps, the Ghana YouthSave Experiment was initiated to establish a rigorous foundation upon which one can begin to explore fully the ways that young people respond to opportunities to create savings, and how savings shape their well-being. Clarity on the effects of youth’s own savings on their developmental outcomes has important implications for adjustments to current regulations on youth savings accounts to better support the well-being of low-income youth.

Methods: The Ghana YouthSave Experiment was a pre- and post-test nested randomized experiment with 6,252 sixth to eighth graders in Ghana. Baseline data were collected in 2011 and endline data in 2014. In this study, we used descriptive analyzes and simple difference-in-difference approach to assess the treatment effects. We calculated the change score (i.e., the difference between baseline and endline scores), and used the appropriate bivariate tests to assess statistically significant differences in the change score between the treatment and control groups.

Results: Results show significant, sizable treatment effects on youth’s saving patterns and performance. Youth in treatment schools performed better in terms of account opening, depositing, and savings. Overall, the treatment youth performed better than the control youth across psychosocial (i.e., aspirations, expectations) and education outcomes (i.e., academic performance, school attendance), although there were relatively stronger treatment effects on psychological outcomes than behavioral outcomes. Also, the intervention had modest effects on health outcomes; the treatment youth were less likely to report engaging in risky sexual behaviors.

Conclusion: This study demonstrates the potential of youth savings opportunities to lead to better developmental outcomes for youth. This finding has implication for the integration of financial capability programs in youth development policies in Ghana and other sub-Saharan African countries. The experimental evidence of impacts provides fundamental insights into the appeal of youth savings accounts as an economic and social development tool. Regulatory frameworks that will allow independent operation of youth savings accounts within reasonable parameters may hold promise for not only fostering youth financial inclusion in sub-Saharan Africa but also promoting youth development.