Early Childhood

Racial Wealth Gap Widens in Households with Young Children

By Maureen Kelleher — April 14, 2011 1 min read

Last week, the Insight Center for Community Economic Development released a report saying that in 2007 about 70 percent of Latino and black households with young children were income-poor and 40 percent had no financial assets—more than twice the respective rates for white households. Lack of resources can lead to disparities in the quality of child-care and healthcare children receive in their earliest years.

Between 1994 and 2007, the wealth gap between white and black households with children in the United States nearly doubled—to $47,000—and at the end of the period the percentage of black households that had no net worth or were living in debt was rising. The report is based on two national data sources: the Panel Study of Income Dynamics and the National Center for Education Statistics’ Early Childhood Longitudinal Study-Birth Cohort.

Maternal education does not offset the wealth gap, according to the report. In fact, over the period, the gap in wealth between college-educated white and black mothers grew five times larger. In 1994, a black mother with a bachelor’s degree owned 64 cents for every dollar owned by a white mother with a bachelor’s. In 2007, the college-educated black mother owned 13 cents for every dollar owned by her white peer.

The stark and widening racial gap in wealth—what a family owns versus what it owes—has significant consequences for the cognitive development and health of children of color, the report said. The paper suggests that the lesser wealth of families of color leads them to live in neighborhoods with concentrated poverty and fewer resources to support children’s health and development, but notes further research is needed to determine exactly how household wealth affects a range of child outcomes.

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A version of this news article first appeared in the Early Years blog.