When Americans discuss the concept of "wealthy," the policy conversation often focuses on the ultra-rich. Public attention centers on tax rates for billionaires, estate loopholes, and hedge fund strategies. Far less attention is given to the children who have no wealth at all, the children who are growing up in what researchers call “net worth poverty.”
In the United States, children are the group most likely to experience this hidden form of poverty.
Two new studies by Duke University researchers, published this year, show how widespread net worth poverty is for families with children, how it compares to other household types, and how it undermines children’s chances of completing high school and attending college.
Wealth as a Hidden Divide
The Census Bureau defines poverty by income. Wealth, however, is what families own minus what they owe, and it paints a different picture. Net worth poverty (NWP) is defined as having wealth below one-quarter of the federal poverty line (or less than $8,000 in net worth for a family of four). For families, wealth serves as a buffer against emergencies, a resource for investments in education, and a foundation for long-term opportunity.
Christina Gibson-Davis, professor at Duke’s Sanford School of Public Policy and lead author of both studies, said the focus on income alone misses a critical part of the story. “Most discussions of poverty focus on income, but the absence of wealth is also a significant disadvantage. When families are examined through the lens of wealth, children are consistently the most vulnerable group.”
By analyzing decades of national data, the research team found that households with children are far more likely to be net worth poor than elderly or childless households. In 2022, among households in the bottom half of the wealth distribution, child households had just 0.03cents of wealth for every dollar held by elderly households. Roughly 40 percent of child households were net worth poor, more than double the share considered income poor.
These disadvantages have consequences that extend beyond day-to-day hardship. In related work, Gibson-Davis, together with Sanford colleagues Lisa Gennetian and Shuyi Qiu and Duke sociologist Lisa Keister, linked childhood exposure to NWP with educational outcomes. Their study, using the long-running Panel Study of Income Dynamics, showed that children who spend long stretches of their lives in net worth poverty are substantially less likely to graduate from high school or attend college.
“Families without assets struggle to pay for tutoring, extracurricular activities, or even transportation,” said Gibson-Davis. “Attending and paying for college requires different forms of wealth, and children without family wealth face unique disadvantages.”
Duration Matters
The research team found that it is not only whether a child ever experiences NWP, but how long and how intensely, that shapes outcomes.
“Children who experience net worth poverty consistently over many years are the ones most at risk,” said Gennetian, a professor at Sanford. “We found that persistent exposure is strongly associated with worse outcomes in high school completion and college attendance.”
Qiu, also at Sanford, added that measuring poverty through wealth helps capture risks that income-based measures overlook. “Net worth poverty reflects families’ ability to cope with unexpected expenses or invest in education,” she said. “It provides a fuller picture of financial insecurity.”
Keister emphasized that the findings highlight a structural problem. “If poverty is measured only by income, a large share of children living in economic insecurity are overlooked,” she said. “Wealth is the safety net families turn to in times of crisis, and many families with children have very little to fall back on.”
Trends and Policy Implications
The work also tracks how these disparities have changed over time. Wealth inequality among families with children has grown faster than income inequality. Yet, there is evidence that policy can shift the trajectory. Between 2019 and 2022, the median wealth of child households rose by 70% and net worth poverty rates fell by 25%. These gains coincided with federal pandemic-era programs such as stimulus payments and the expanded Child Tax Credit. While the studies do not establish causation, the timing suggests that policy choices may shape the wealth landscape for children.
“Historically, the social safety net has supported the elderly more strongly than children,” said Gibson-Davis. “If long-term prosperity is the goal, policy must also address child household wealth. The evidence shows that high levels of net worth poverty for children is not inevitable.”
Gennetian agreed, noting that wealth is central to the next generation’s ability to thrive. “If the measure of child poverty is expanded to consider household wealth, it becomes clear that children face multiple economic disadvantages,” she said. “And this raises important considerations in policy to address both net worth and income poverty as dual inputs for improving children’s opportunities.”
Summary
When Americans discuss the concept of "wealthy," the policy conversation often focuses on the ultra-rich. These new studies show that the more pressing story may be at the other end of the spectrum, where children have little or no wealth at all. Net worth poverty is common, long lasting, and damaging for education and opportunity.
Unless policymakers begin to consider both wealth and income, the children who have only pennies on the dollar today may remain locked out of opportunity tomorrow.
Study Links:
Net Worth Poverty in Childhood: How Duration and Timing Affect Educational Outcomes | NBER
Author Contact Information:
Christina Gibson-Davis (Lead Author): cgibson@duke.edu
Lisa Gennetian: lisa.gennetian@duke.edu
Shuyi Qiu: shuyi.qiu@duke.edu
Lisa A. Keister: lkeister@duke.edu