The idea that family assets impart benefits to children—benefits beyond those related solely to income—has garnered the interest of policy makers and scholars. Theory suggests that assets reduce parental stress in part by providing a cushion that helps families cope with financial crises. The accumulation of assets may allow families to provide enrichment opportunities (e.g., summer camp) that they could not finance out of income alone. Under the right conditions, homeownership may increase household stability and even provide children access to good schools and neighborhoods. Asset holding may increase future orientation and change parents’ attitudes and expectations about their children’s future. For example, a family with assets for a child’s college education may view the child as “college bound,” and this perception may make the family more supportive of her or his education in the precollege years.

               In the United States, there are great racial and income disparities in wealth holdings. Asset poverty, the inability to meet basic needs if family income is lost, particularly affects households with children. If a loss of income were to occur, more than half of U.S. families with children lack the liquid assets to support the family at the poverty level for 3 months. Although support exists for asset-building policies, current policies disproportionally favor high-income households. For example, tax deductions are offered for home mortgage interest, but these deductions do not benefit renters or low-income households with limited tax liability.  A recent report indicates that the bottom 60 percent of taxpayers received only 4 percent of federal spending on asset-building programs in one budget cycle.

In response to this disparity, the asset-building field has designed and tested several programs designed to help low- and moderate-income families save and build assets. This paper systematically reviews empirical evidence on the relationship between assets and child outcomes. It then examines policy demonstrations that promote asset-building among low-income families. Specifically, we examine evidence from (1) such national data sets as the Panel Study of Income Dynamics and the National Longitudinal Survey of Youth; and (2) quasi-experimental and randomized controlled trials, such as the Community Advantage Program, the Saving for Education, Entrepreneurship, and Downpayment (SEED) program, and SEED for Oklahoma Kids.

               We find evidence that assets and asset-building interventions may improve child outcomes.  However, the evidence is preliminary; data from national data sets have some noteworthy limitations, and most demonstrations are still in their early phases.  The most consistent finding from longitudinal studies is that accounts and assets may influence such educational outcomes as college enrollment and graduation.  Evidence suggests that assets can also influence child behavior and health, but the findings emerges only from a few studies—primarily studies of homeownership.  Moreover, demonstration research shows that existing infrastructure can be expanded to provide accounts and assets to all. This finding is important if creating a more inclusive ownership society is a desirable goal. Additional, long-term research is needed, and evaluations of several promising programs are underway.