Net Worth Poverty in Childhood: Duration, Timing, and Educational Outcomes.

Abstract

Net worth poverty (NWP) is the modal form of poverty for American children, but how it is experienced across childhood and its associations with human capital accumulation are unknown. Using data from the 1999‒2021 waves of the Panel Study of Income Dynamics on a cohort of children followed from birth to age 20, this study measures NWP exposure and duration across the child's life course and relates NWP exposure and duration to high school graduation and college attendance. NWP refers to households whose wealth is less than one fourth of the federal poverty line. Findings show that through age 18, children experienced more frequent and enduring spells of net worth poverty than income poverty. NWP was negatively associated with high school graduation and college attendance independent of the effects of income poverty. Effects were larger for college attendance than for high school graduation, perhaps reflecting the resource-intensive nature of college. The negative effects of NWP were most pronounced for the 31% of the sample that experienced NWP in most waves. The timing of NWP relative to developmental stage did not seem to matter, as children were at risk regardless of the age at which they experienced it.