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Abstract
This report synthesizes current research and other available information on the assets and liabilities of low-income households into a variety of portraits. These data allow practitioners and researchers to begin to form a comprehensive representation of the balance sheets of low-income households and sets the stage for future research and policy discussion around the finances of low-income households.
Introduction
Economic security throughout the life course is intrinsically linked to both income and asset ownership. The majority of current social policies focus primarily on income supports and social services. However, building assets can also help individuals, families, and communities expand their economic horizons.
America has a longstanding history of promoting ownership, as reflected in existing policies to promote home and business ownership, investment, and saving. New opportunities for people to save and become asset owners will likely increase the number of individuals and families able to build assets and improve the economic security of all Americans. Greater inclusivity and accessibility of traditional approaches to expanding ownership may make it easier for lower and middle income families to save. Still, while theory and evidence suggest that improved asset-based policies may promote development of low-income individuals and families, and perhaps communities and society as a whole, research in this area of asset development is in its infancy. There is still much to learn.
Poor Finances: Assets and Low-Income Households is a series of reports on poverty, asset building, and social policy. The purpose of the series is to assess the nascent state of knowledge and policy development and to synthesize recent progress in these areas. Specifically, the reports in the series will
- evaluate what is known regarding the measures, distributions, determinants, and effects of asset holding,
- develop a portrait of the assets of low-income households,
- develop conceptual frameworks for viewing assets and liabilities,
- assess the strengths and weaknesses of data sources on assets and liabilities,
- chart directions for future research,
- examine the effects of means-tested program policies on asset building, and
- inform subsequent discussions of public policy.
While the focus of this series of reports is on asset accumulation and asset-based policies for low-income individuals and families, the conceptual frameworks developed are not limited to low-income populations. This broad approach is an effective way to identify the overall critical issues that relate to asset holding for all populations. Where appropriate, however, various reports point out when the framework specifically applies to low-income, minority, and single parent households. This distinction is important because these subgroups are particularly vulnerable to low asset accumulation. The definition of low-income used in the series of reports is necessarily imprecise. The reports reflect a broad literature synthesis and definitions of low- income are not uniform across studies, surveys, or public programs. However, low-income can be broadly thought of as affecting households in the bottom income quintiles.
This report in the series, “The Balance Sheets of Low-Income Households: What We Know about their Assets and Liabilities,” synthesizes current research and other available information on the assets and liabilities of low-income households into a variety of portraits. These data allow practitioners and researchers to begin to form a comprehensive representation of the balance sheets of low-income households
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Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
