“Wealth Inequality and Child Development: New Evidence for Policy and Practice”
Christina Gibson-Davis, Duke University
Heather Hill, University of Washington
Wealth inequality—the unequal distribution of assets and debts across a population—has reached historic levels in the United States (Yellen 2016), particularly for households with children (Pfeffer and Schoeni 2016). Among households with a resident child under the age of eighteen (hereafter, child households), the increase in wealth inequality has outpaced the rise in income inequality, and child households have higher levels of wealth inequality than other household types (Gibson-Davis and Percheski 2018). In 2016, child households in the top 1 percent of the wealth distribution had $9.7 million dollars in median wealth; child households in the bottom 50 percent had median wealth of $89 (Percheski and Gibson-Davis 2019). High rates of wealth inequality among child households may relate to differences across the life course in wealth-building mechanisms, including asset acquisition and the accumulation of debt (Gibson-Davis and Percheski 2018).
Wealth inequality has multiple repercussions for the well-being of young adults, insofar as disparities in wealth increase gaps in college attendance and completion, and levels of wealth affect early adult decisions regarding marriage and fertility (Addo 2014; Conley 2001; Pfeffer 2018; Schneider 2011). Wealth is positively associated with standardized test scores for children of all ages(Elliott, Destin and Friedline 2011; Orr 2003; Yeung and Conley 2008). Wealth inequality, measured at the national level, may also negatively impact adolescent mental and physical health (Viner et al. 2012). The importance of wealth, however, is likely not confined to children at the cusp of adulthood or to the cognitive domain, but may operate throughout childhood in multiple domains to affect future life chances. Parental wealth could promote child well-being through multiple mechanisms, including investments in stable housing or safe neighborhoods, access to cultural capital, and the peace of mind associated with having insurance against a future job loss or health crisis (Orr 2003; Yellen 2016). In addition, disparities in parental wealth may also influence parenting behaviors and practices and choices parents make about union formation and stability.
Outside of handful of studies on test scores (Elliott et al. 2011; Yeung and Conley 2008), research on wealth has paid little attention to outcomes for children before they reach the age of eighteen. Moreover, with the exception of one study (Gibson-Davis and Percheski 2018), scholars have not examined how and why trends in wealth inequality differ for child households vis-à-vis other household types. In contrast, the literature on income inequality, and its repercussions for family functioning and child well-being, is well-developed, and encompasses many areas (e.g., parental investments, teen fertility, birth outcomes; Kornrich and Furstenberg 2013; Rivenbark et al. 2019; Schneider, Hastings and LaBriola 2018; Wallace et al. 2015) overlooked by studies of wealth inequality.
To stimulate the academic and policy conversation on wealth inequality, this volume will examine the contours and consequences of wealth inequality for child households and for child outcomes. Our issue will feature original theoretical and empirical work that builds our understanding of the implications of wealth inequality for child development and offers insights into the most promising policies and programs to reduce wealth inequality and its potentially far-reaching effects.
We conceptualize childhood as prenatal to seventeen years and wealth inequality as relative differences in net worth (a household’s assets minus its debts). We are looking for studies that document temporal, geographic, and sociodemographic variation in wealth inequality among child households. We are also interested in studies that examine how and why wealth inequality affects children’s cognitive, physical, socioemotional, and moral development, and how wealth levels and disparities affect parenting choices and partnership status. Of particular interest are studies that examine the intersection of wealth inequality with race/ethnicity and immigration status and those that examine mechanisms and processes by which wealth inequality affects child development in different domains or at different ages.
This issue will not focus on income level or inequality, but it will be informed by and complement the vast literature on the detrimental effects of low income level and high inequality on child well-being (e.g., Brooks-Gunn and Duncan 1997; Chetty and Hendren 2016; Currie and Stabile 2003; Dahl and Lochner 2012; McLanahan 2004; Reardon 2011). Studies could examine the effects of absolute or relative measures of wealth (see Mullahy, Robert and Wolfe 2004 on income); individual and community levels of wealth (as Kearney and Levine 2014 did with income inequality); and the joint effect of income and wealth inequality. We will consider quantitative and qualitative, descriptive and analytic, and empirical and theoretical submissions, and invite contributions from the social sciences, public policy, social work, and public health.
The resulting issue will include three sections: 1) trends in wealth inequality during childhood; 2) consequences of wealth inequality for child development; 3) policies and programs to reduce wealth inequality and its effects. Below we describe each section, potentially relevant questions, and scholars who would be qualified to write on the topic.
Section 1. Trends in wealth inequality during childhood
As editors of the issue, we will write an introductory chapter that will provide an overview of wealth inequality in the United States for families with children. It will begin by defining what wealth inequality is, how it is typically measured, and explain the difference between wealth and income inequality. The chapter will also present a broad overview of recent trends in wealth inequality for child households. The chapter will also motivate the focus of the volume on families with children, given the importance of wealth inequality in determining children’s well-being (Killewald, Pfeffer and Schachner 2017; Pfeffer and Schoeni 2016; Putnam 2016). In the final sections, it will summarize each of the articles, and discuss the primary lessons learned from the volume.
We will consider one or two additional articles that are either descriptive or theoretical to help frame the issue. These might bring a historical, sociological, or developmental lens to the study of wealth equality and children. Potential questions include:
- How does developmental and sociological theory help us to understand the potential consequences of wealth inequality for children?
- What are the current and historical intersections between race/ethnicity, immigration status, and family structure and wealth inequality?
- How should we measure aggregate levels of wealth for communities/counties/states? What do these trends look like over time?
- How and why does wealth inequality for families with children in the United States compare to other countries? Across states?
Section 2. Consequences of wealth inequality for child development
Recently, a special section of Developmental Psychology edited by Vonnie McLoyd (2019) highlighted new work on economic inequality and the moral and political development of adolescents. This is exciting work that considers when and how children understand relative social status, what causal attributions they give to their own and others’ statuses, and how inequality in developmental contexts shapes their political ideology. In addition, recent work by Schneider et al. (2018) indicates that both income and educational inequality are associated with income gaps in spending on children, suggesting a potentially important mechanism for effects on children. Building on these and other works, we are interested in highlighting studies that examine the consequences of wealth inequality for a variety of contexts and domains of child development. Submissions could examine wealth inequality at cross-national, national, or local levels. Potential questions include:
- What are the effects of wealth inequality experienced at the family or community level on specific child development domains?
- How do those effects differ by income level, family structure, or specific child age, gender, and race sub-groups?
- What mechanisms explain the effects of wealth inequality on child development in specific domains?
- Do the effects of wealth inequality on child development differ geographically? Why?
Section 3. Policies and practices to reduce wealth instability or its effects on children
The third foci examines how U.S. policies and practices are both contributors to, and potential mitigators of, wealth inequality for children. We are interested in studies of the historical effects of past economic and social policies on wealth inequality, evaluations of current policies with a focus on wealth inequality as an outcome, and proposals for future policies with promise for reducing wealth inequality or its effects. We have a particular interest in studies that examine how wealth inequality for children intersects with education, housing, health care, climate change, and migration. Potential questions include:
- How does our fragmented, de-centralized health and educational systems contribute to wealth inequality among child households?
- How does climate change and climate policy interact with wealth inequality to effect child outcomes?
- Do adult or child immigration policies impede the acquisition of wealth for child households?
- Among the many income support programs in place and being considered (e.g. EITC and universal basic income), do some hold more promise for reducing wealth inequality during childhood? What about reducing racial/ethnic disparities in wealth during childhood?
- Do the effects of wealth inequality on specific aspects of child development vary by the strength or structure of national or sub-national safety net programs?
Addo, F.R. 2014. "Debt, cohabitation, and marriage in young adulthood." Demography 51(5):1677-1701.
Brooks-Gunn, J.and G.J. Duncan. 1997. "The effects of poverty on children." The Future of Children 7(2):55-71.
Chetty, R.and N. Hendren. 2016. "The impacts of neighborhoods on intergenerational mobility i: Childhood exposure effects." NBER Working Paper No. 23001. Cambridge, MA: National Bureau of Economic Research.
Conley, D. 2001. "Capital for college: Parental assets and postsecondary schooling." Sociology of Education 74(1):59-72.
Currie, J.and M. Stabile. 2003. "Socioeconomic status and child health: Why is the relationship stronger for older children?" American Economic Review 93(5):1813-1823.
Dahl, G.and L. Lochner. 2012. "The impact of family income on child achievement: Evidence from the earned income tax credit." The American Economic Review 102(5):1927-1956.
Elliott, W., M. Destin, and T. Friedline. 2011. "Taking stock of ten years of research on the relationship between assets and children's educational outcomes: Implications for theory, policy and intervention." Children and Youth Services Review 33(11):2312-2328.
Gibson-Davis, C.M.and C. Percheski. 2018. "Children and the elderly: Wealth inequality among america’s dependents." Demography 55(3):1009–1032.
Kearney, M.S.and P.B. Levine. 2014. "Income inequality and early nonmarital childbearing." Journal of Human Resources 49(1):1-31.
Killewald, A., F.T. Pfeffer, and J.N. Schachner. 2017. "Wealth inequality and accumulation." Annual Review of Sociology 43:379-404.
Kornrich, S.and F. Furstenberg. 2013. "Investing in children: Changes in parental spending on children, 1972–2007." Demography 50(1):1-23.
McLanahan, S. 2004. "Diverging destinies: How children are faring under the second demographic transition." Demography 41(4):607-627
McLoyd, V.C. 2019. "How children and adolescents think about, make sense of, and respond to economic inequality: Why does it matter?" Developmental Psychology 55(3):592.
Mullahy, J., S. Robert, and B. Wolfe. 2004. "Health, income, and inequality." in Social Inequality, edited by K.M. Neckerman. New York, NY: Russell Sage Foundation Press.
Orr, A.J. 2003. "Black-white differences in achievement: The importance of wealth." Sociology of Education 76(4):281-304.
Percheski, C.and C.M. Gibson-Davis. 2019. "Racial and ethnic gaps in wealth among families with children." Unpublished manuscript, Northwestern University.
Pfeffer, F.T. 2018. "Growing wealth gaps in education." Demography 55(3):1033-1068.
Pfeffer, F.T.and R.F. Schoeni. 2016. "How wealth inequality shapes our future." RSF: The Russell Sage Foundation Journal of the Social Sciences 2(6):2-22.
Putnam, R.D. 2016. Our kids: The American Dream in Crisis. New York: Simon and Schuster.
Reardon, S.F. 2011. "The widening academic achievement gap between the rich and the poor: New evidence and possible explanations." Pp. 91-116 in Whither Opportunity? Rising Inequality, Schools, and Children's Life Chances, edited by G.J. Duncan and R.J. Murnane. New York: Russell Sage Foundation.
Rivenbark, J.G., W.E. Copeland, E.K. Davisson, A. Gassman-Pines, R.H. Hoyle, J.R. Piontak, M.A. Russell, A.T. Skinner, and C.L. Odgers. 2019. "Perceived social status and mental health among young adolescents: Evidence from census data to cellphones." Developmental Psychology 55(3):574.
Schneider, D. 2011. "Wealth and the marital divide." American Journal of Sociology 117(2):627-667.
Schneider, D., O.P. Hastings, and J. LaBriola. 2018. "Income inequality and class divides in parental investments." American Sociological Review 83(3):475-507.
Viner, R.M., E.M. Ozer, S. Denny, M. Marmot, M. Resnick, A. Fatusi, and C. Currie. 2012. "Adolescence and the social determinants of health." The Lancet 379(9826):1641-1652.
Wallace, M.E., P. Mendola, D. Liu, and K.L. Grantz. 2015. "Joint effects of structural racism and income inequality on small-for-gestational-age birth." American Journal of Public Health 105(8):1681-1688.
Yellen, J.L. 2016. "Perspectives on inequality and opportunity from the survey of consumer finances." RSF: The Russell Sage Foundation Journal of the Social Sciences 2(2):44-59.
Yeung, W.J.and D. Conley. 2008. "Black–white achievement gap and family wealth." Child Development 79(2):303-324.
Prospective contributors should submit a CV and an abstract (up to two pages in length, single or double spaced) of their study along with up to two pages of supporting material (e.g., tables, figures, pictures, etc.) no later than 5 PM EST on June 24, 2019 to:
NOTE that if you wish to submit an abstract and do not yet have an account with us, it can take up to 48 hours to get credentials, so please start your application at least two days before the deadline. All submissions must be original work that has not been previously published in part or in full. Only abstracts submitted to rsf.fluxx.io will be considered. Each paper will receive a $1,000 honorarium when the issue is published. All questions regarding this issue should be directed to Suzanne Nichols, Director of Publications, at email@example.com and not to the email addresses of the editors of the issue.
A conference will take place at the Russell Sage Foundation in New York City on February 21, 2020 (with a group dinner the night before). The selected contributors will gather for a one-day workshop to present draft papers (due a month prior to the conference on 1/21/20) and receive feedback from the other contributors and editors. Travel costs, food, and lodging for one author per paper will be covered by the foundation. Papers will be circulated before the conference. After the conference, the authors will submit their revised drafts by 4/20/20. The papers will then be sent out to three additional scholars for formal peer review. Having received feedback from reviewers and the RSF board, authors will revise their papers by 9/2/20. The full and final issue will be published in the summer of 2021. Papers will be published open access on the RSF website as well as in several digital repositories, including JSTOR and UPCC/Muse.