New Findings on How Wealth Shapes Opportunities for Children

A recently released study of income and child outcomes adds evidence to our understanding of the relationship between family income and wealth and child well-being. Findings from the study are troubling for Memphis. First, the authors find significant racial disparities in the wealth of families with young children. While 32% of white households with young children were income-poor and 14% had no assets, 69% of Latino and 71% of Blacks were income-poor and 40% had no assets.

While maternal education helps to overcome the effect of poverty on child outcomes, education is not a sure cure for poverty. While 95% of white mothers with some college have savings or investments, fewer than 71% of black mothers with some college have savings or investments. Put more starkly, the median wealth for single black mothers with school age children is zero, meaning that half have debt rather than assets.

The implications of differences in wealth on child outcomes are striking. While all children start out with fairly similar scores on standard measures of child development, by two years of age, disparaties emerge that are associated with race and family economic status. In fact, the study's authors find, if we hold family income and asset levels constant, the achievement gap between white and black children largely dissapears. In fact, both white and black children aged 3-12 in non-poor families with multiple assets earn equally impressive scores on measures of letter and word recognition. Their scores are markedly higher than children in families without assets, regardless of race.

In short, where concentrated pockets of racialized poverty are allowed to prevail, they contribute to related disparities in early brain development, school readiness, academic achievement, and health.

As the study's authors conclude: "Our quality of life and ability to secure a strong, common economic and social future depends upon our ability to invest wisely in our children now."