These publications are part of a series. Learn more about the national impact of baby bonds, and how federal baby bonds policy could impact Atlanta, Baltimore, Boston, and Oakland by reviewing modeling specific to those cities.

In recent years, excitement around legislation that would create “baby bonds,” or progressive, publicly funded child trust accounts, has grown at local, state, and federal levels. Our new research dives into the perspectives of young people on baby bonds, how they may want to spend funds, and how they think the program could be successful. 

Why This Matters

A few scholars have evaluated the potential for baby bonds to reduce the significant racial wealth gap. But until this point, no research on baby bonds has engaged directly with those who would receive baby bonds: young people. Local leaders, program administrators, and advocates could benefit greatly from better understanding the challenges that young adults face when trying to build wealth and access the supports they need for baby bonds programs to be impactful.

What We Found/Key Takeaways

Across Atlanta, Baltimore, Boston, and Oakland, we heard unique perspectives from potential baby bonds recipients:

• Young adults’ preferences for how to spend a baby bond change depending on the amount they might receive. With a baby bond of $50,000, more than half of participants said they would want to use a baby bond on a home purchase. At all proposed amounts more than half of participants would not want to spend funds on postsecondary education and more than 25 percent would invest in entrepreneurship.
• There was near universal agreement across focus group participants in every city that baby bonds recipients should have access to financial advising or guidance, with many participants citing a lack of financial knowledge as a barrier to wealth-building.
• Young adults highlighted the historical and structural barriers to wealth building in their respective cities. Atlanta participants highlighted the historical roots of racial disparities in wealth and opportunity in the city; Boston participants focused on segregation in housing and education; Oakland participants noted how historical lending discrimination created disparities in neighborhood resources; and Baltimore participants focused on unequal distribution of capital for small businesses and homeownership across the city.
• Engaging young people in research and policy design in early-life wealth building work is key to successful policy implementation. Young adults raised critical questions about the nuances of how baby bonds would be implemented; for example, many were curious about how baby bonds would impact one’s eligibility for means-tested programs like the Supplemental Nutrition Assistance Program and federal student loans. Some participants also expressed wariness about the program, while others were concerned with how such a program would be effectively communicated to recipients and their families. Engaging young people, especially those from historically disadvantaged communities, in early stages of future research and policy design can help ensure that policy recommendations are effective not only in theory, but also on the ground.

How We Did It

We conducted interviews with nonprofit and community leaders in all four cities and held focus groups with 59 low-income young adults (ages 18 to 24). We asked community leaders and young adults to tell us about the barriers and opportunities they saw in their city, and to detail how they would spend baby bonds of different amounts. We also learned about the concerns that people had about baby bonds and the support that they would want in place alongside accounts. In our focus groups, we shared local data on racial disparities in wealth and opportunity in an effort to arm the young adults—experts in the lived experience of local wealth realities—with data and facts that they could reflect on, provide context for, and even question.