https://static1.squarespace.com/stat...P-10-30-18.pdf
Universal Baby Bonds Reduce Black- White Wealth Inequality,
Progressively Raise Net Worth of all Young Adults
Naomi Zewde, 2018
"
Law makers and
researchers have proposed to address the issue by introducing universal “baby bonds,” paid to each new
born in the United States and preserved until the individual reaches young adulthood. The proposed bond
value is based on a sliding scale up to a $50,000 maximum investment for babies born to families with the
lowest net worth. By tying bond values to net worth rather than income the proposed scheme intends to
better address the more extremely unequal and persistent racial disparities in net wealth.
find that without the baby bond program, median wealth among young Caucasians is
approximately sixteen times that of the young African Americans ($46,000 vs. $2,900). The baby bond
program raises median wealth for both groups and reduces the disparity to a factor of 1.4, where
Caucasian young adults hold $79,159 and African Americans $57,845 at the median. Moreover, the share
of all wealth held by the top decile of young adults would decrease from 72% to 65%, marginally
approaching the distribution of more egalitarian societies. A baby bond program would considerably
narrow wealth inequalities by race while simultaneously improving the net asset- position of young adults
and alleviating the increasing concentration of wealth at the top.
"