Urban Wire Early-Life Wealth-Building Programs Could Narrow the Wealth Gap, But Their Success Hinges on Public Support
Samantha Atherton, Madeline Brown
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An image of college aged students in a classroom facing the profesor.

Building wealth is critical to weathering tough times, affording tuition to prepare for a better job, buying a home, and growing savings to retire on. But building wealth isn’t equally attainable for all.

Families with low incomes face systemic barriers to building wealth. And families of color with low incomes face these same barriers, compounded by structural racism. As a result, the racial wealth gap is wide; for each dollar of wealth held by white families, Black families have about 13 cents, and Latino families have 19 cents, on average.

Recently, early-life policies like children’s savings accounts (also known as child development accounts) and baby bonds have gained momentum as a strategy to help families with low incomes accrue wealth. They are public investments in savings accounts for babies that appreciate over time. When the recipient is 18, they can spend the accrued capital on postsecondary education, homeownership, and business investments.

Public support is critical to ensuring the success of these policies. But building that support can be challenging. Their long-term nature means they fall victim to shifting administrations and priorities, making them difficult to sustain in the long run. And funding for early-life wealth-building programs must cover not only the accounts themselves but also their administration, making them a significant investment. Garnering support for such an investment can be difficult.

In June, Urban privately convened state representatives from California, Connecticut, Delaware, Massachusetts, Nevada, Pennsylvania, Washington, and Wisconsin; researchers; and representatives from financial institutions to discuss early-life wealth-building policies. Here are a few strategies states can adopt to build and maintain support for these programs.

Establish a consistent message that identifies program priorities and appeals to the target audience

Convening attendees noted it’s important to communicate a program’s key policy elements in its messaging—while speaking to your target audience.

If the program’s goal is to mitigate racial wealth disparities, states can emphasize the elements that address the racial wealth gap. These might include a publicly funded substantial endowment, targeting toward children in families with little wealth or low incomes, automatic enrollment, progressive deposits, and individual recipients (adolescents, as opposed to their parents). A consistent message that centers racial wealth equity should be the through line in legislation, communications with the public, and implementation.

Because of political tensions and desires to also focus on other inequities such as gender or geographic wealth, some states elect a broader frame that doesn’t exclusively focus on racial equity. In Connecticut, policymakers presented the wealth gap and persistent poverty as an issue for everyone. They effectively communicated how the wealth gap and cycles of intergenerational poverty damage the economy and frame baby bond programs as a solution. Despite not explicitly mentioning racial equity as a goal, some of the aforementioned policy elements are included in Connecticut’s baby bonds programincluding (PDF) automatic enrollment for births covered by the state’s Medicaid system, individual recipients, and targeting for low-income families—and will help advance it.

Though that approach may help build support for the program, it comes with a risk: if states make the case that helping families with low incomes will improve economic outcomes for all, but then economic outcomes don’t improve (for any number of reasons, related to these programs or not), the programs may lose support. Considering a long history of families being blamed for experiencing poverty, critiques could mistakenly fall on the program beneficiaries, instead of broader economic forces.

Form interagency alliances

These programs’ success hinges on data collection and sharing for participants to be enrolled, money to be allocated and managed, and large-scale communications to ensure recipients receive the money upon adulthood. Establishing intergovernmental coalitions early in the policy development process can help meet programs’ administrative and financial requirements and ensure their success.

For example, automatic enrollment maximizes the inclusivity of any early-life wealth-building program. It ensures children don’t miss out because their families are unaware of the program or choose not to sign up because of administrative burdens or other factors. Complicated application procedures have deterred many eligible families from signing up for other programs, such as the Supplemental Nutrition Assistance Program. But automatic enrollment requires data sharing—typically between health and human services or education agencies and financial offices. Making all parties aware of the benefits of automatic enrollment can improve collaboration among the necessary agencies.

Engage the community

Engaging directly with community members is critical to building public support. Convening participants suggested state representatives can take the following steps to do so effectively:

  • Form alliances with community-based organizations that already have influence among residents to disseminate information and engage socioeconomically diverse communities. Some state representatives also suggested leveraging support from Black and Latinx caucuses, as they serve as community leaders and representatives of affected groups and can catalyze momentum.
  • Partner with educators, local organizations, and government agencies committed to college access. Julio Martinez, executive director at California’s ScholarShare Investment Board, shares, “We’ve engaged statewide education associations representing school superintendents, administrators, public information officers, counselors, and parents to share information about CalKIDS with their members.” Such partnerships create new channels to disseminate information, such as workshops, presentations, and digital communications. California also uses strategic paid marketing—on the radio, social media, and digital display ads—corresponding with notification letters mailed directly to eligible participants.

What now?

Early-life wealth-building programs could substantially narrow the wealth gap—and thus the racial wealth gap—in the long term. But garnering broad public support will be crucial to their sustainability. To ensure their success, states can apply the strategies above and seek to constantly learn from each other as programs gain traction.


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Research Areas Wealth and financial well-being
Tags Child support Children's budget Inequality and mobility Racial and ethnic disparities Racial barriers to accessing the safety net Racial wealth gap State programs, budgets Structural racism Wealth gap Wealth inequality Welfare and safety net programs
Policy Centers Research to Action Lab
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