Research at CFED
The Financial Security of Households with Children
Millions of children are growing up in families facing economic hardship. Savings and asset ownership can provide a cushion to help get families through periods of unemployment, a medical emergency or other financial shocks. Not only can assets stabilize a family in the present, but growing evidence also shows that assets and financial stability have a powerful impact on the future economic prospects of children. In the newly released Assets & Opportunity Special Report: The Financial Security of Households with Children, CFED analyzes data on the net worth and asset poverty of households with children, and finds that many families are on financially shaky ground.
The reality for households with children is that their rates of asset poverty are higher than for households in general. More than one in four households with children are asset poor, and one in six lives in extreme asset poverty, i.e., they have zero or negative net worth. And for African American households with children, the rates are significantly higher; nearly half are asset poor and almost one-third live in extreme asset poverty. Key findings include:
- Households with children are more vulnerable to economic shocks than those without children: households with children own only 70 cents for every $1 in wealth held by all households.
- Wealth gaps by race, income and gender persist across all households, but are most significant for households with children.
- While net worth grew for most households in the years leading up to the recession, African American households and poor households with children fell further behind.
These realities are not intractable, and this report proposes several policy changes that would improve the situation. In order to ensure the future success of our children and our economy, we need to promote and adopt policies to increase the financial assets and income of families. We want children to get a good start on life – for their sake and ours.