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Diverging Pathways: How Wealth Shapes Opportunity for Children

April 12, 2011 Comments off

Diverging Pathways: How Wealth Shapes Opportunity for Children (PDF)
Source: Insight Center for Community Economic Development

Key Findings

Racial disparities in households with young children are dramatic

  • In 2007, 32% of white households with young children were income-poor and 14.2% had no assets. In sharp contrast, 69% of Latino and 71% of blacks were income-poor, and 40% had no assets.

Racial disparities in child outcomes start early and grow over time

  • At nine months, all children start out with fairly similar scores on a standard child development test, but by two years of age, racial disparities emerge.

The wealth gap widened for households with children

  • Between 1994 and 2007, the wealth gap between white and black households with children increased by $22,000 -almost doubling from $25,000 to $47,000.
  • In 2007, black households with children held only 4% of the wealth of white households.
  • From 2005 to 2007, black households living with zero or negative net worth (debt) grew from 35% to 39% while it stayed constant at 15% for white households.

Maternal education matters, but alone cannot eliminate racial wealth disparities

  • For every dollar of wealth owned by a white mother with a bachelor’s degree or higher in 1994 a black mother owned 64 cents. By 2007, it had fallen to 13 cents.
    The wealth gap between white and black mothers with a bachelor’s degree or higher grew five times larger between 1994 and 2007 to an astonishing $128,000.
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