Net Worth Poverty and Children’s Development

Project Description

This study examines how net worth poverty – or household’s whose wealth levels fall below one-quarter of the federal poverty line – is associated with children’s cognitive and behavioral development. Most children who are net worth poor are not income poor, meaning that these economically vulnerable group of children have been conventionally overlooked in conversations about poverty. Parents and families who experience wealth deprivation through net worth poverty may be unable to adequately invest in their children, may face increased stress and anxiety, and may have curtailed expectations and aspirations for their children’s life goals. In the event of an economic crisis—such as a lost income or medical emergency – parents may not have enough savings to meet the basic needs of their children. Our investigation contributes a new perspective on economic precarity of child households, on the ways in net worth complements and exacerbates the negative effects of income poverty, and on the role that anti-poverty policies play in supporting the overall economic health of child households.

Project Goals

Aim 1: Identify if net worth poverty is associated with children's cognitive development and behavioral outcomes, and if net worth poverty operates independently of income poverty.

Aim 2: Investigate how racial and ethnic disparities in net worth poverty are associated with racial and ethnic disparities in children's cognitive and behavioral outcomes.

Aim 3: Examine whether the EITC alleviates net worth poverty and thus reduces the negative consequences of net worth poverty on children's development beyond its influences on income poverty.

Related Findings and Resources