Net worth poverty and child Well-being: Black-White differences.
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2025-02
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Abstract
Net worth poverty, defined as having wealth (assets minus debts) that is less than one-fourth the federal poverty line, can have negative associations with children's development. Net worth poverty can reflect the lack of assets or the presence of debts, with the former posing greater developmental risks than the latter. Structural inequalities and racial discrimination have led to higher rates of asset poverty for Black than White families, suggesting that net worth poverty may pose disproportionate risks for Black children. To inform this hypothesis, this study examines how net worth poverty and its subcomponents of asset and debt poverty relate to Black and White children's academic and behavioral outcomes. Data come from the Panel Study of Income Dynamics and its Child Development Study, which includes 3,164 Black and 3,578 White children aged 3-17 observed between 2002 and 2019. Regression models estimated the association between poverty (measured as net worth, income, assets, or debt) and four child outcomes: reading and math achievement and externalizing and internalizing behavior scores. In models that control for income poverty, among White children, net worth poverty, as well as asset and debt poverty, was associated with worse outcomes. Contrary to expectations, using the same set of covariates, net worth poverty among Black children was not a significant predictor of outcomes. For this racial group, asset poverty was negatively related to outcomes, but effects were roughly half the size as those found for White children. Additionally, debt poverty among Black children was not associated with either positive or negative effects. The small effect of asset poverty, when coupled with the lack of effects for debt poverty, mechanically explains why net poverty was not detrimental for Black children. This study underscores the importance of wealth deprivation in studies of poverty and shows that the negative effects of net worth poverty differ between White and Black children.
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Gibson-Davis, Christina, Lisa A Keister and Lisa A Gennetian (2025). Net worth poverty and child Well-being: Black-White differences. Children and youth services review, 169. p. 108047. 10.1016/j.childyouth.2024.108047 Retrieved from https://hdl.handle.net/10161/33703.
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Christina M. Gibson-Davis
Christina M. Gibson-Davis is a professor in the Sanford School of Public Policy, Duke University, with a secondary appointment in sociology. Her research interests center around social and economic differences in family formation patterns. Her current research focuses on the how divergent patterns of family formation affect economic inequality.
Lisa A. Keister
Lisa A. Keister is professor of sociology and public policy at Duke University and an affiliate of the Duke Network Analysis Center and the Duke Population Research Initiative. Her current research focuses on organization strategy, elite households, the processes that explain extremes in wealth and income inequality, and on group differences in the intergenerational transfer of assets. She has been focusing on the causes and consequences of net worth poverty recently with colleagues from the Sanford school and is currently completing two books: one on America’s wealthiest families, the one percent, and one on net worth poverty.
Lisa A. Gennetian
Dr. Gennetian is an applied economist whose research straddles a variety of areas concerning child poverty from income security and stability to early care and education with a particular lens toward identifying causal mechanisms underlying how child poverty shapes children’s development. She is a co-PI on the first multi-site multi-year randomized control study of a monthly unconditional cash transfer to low income mothers of infants in the U.S. called Baby’s First Years. Her recent work bridges poverty scholarship with a behavioral economic framework. “The Persistence of Poverty in the Context of Economic Instability: A Behavioral Perspective,” describes such a framework for poverty programs and policy, co-authored with Dr. Eldar Shafir and her co-authored publication “Behavioral Economics and Developmental Science,” further advances the application of behavioral economic insights to the arena of children’s development. Professor Gennetian has since launched the beELL initiative; applying insights from behavioral economics to design strategies to support parent and family engagement in, and enhance the impacts of, existing childhood interventions. Dr. Gennetian also has a body of research examining poverty among Hispanic children and families, serving as a PI on several grants and a co-PI directing work on poverty and economic self-sufficiency at the National Center for Research on Hispanic Families.
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