Diverging Pathways: How Wealth Shapes Opportunity for Children

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.

The above are from a new report by the Insight Center for Community Economic Development. The full report is located at:

insightcced.org/uploads/CRWG/DivergingPathways.pdf