Asset poverty among children: A cross-national study of poverty risk

Abstract

We introduce the concept of child asset poverty as the condition of a child living in a family that owns a level of financial assets that falls below a systematic threshold. Using harmonized and comparable household wealth survey data from the United States and five other countries this paper finds that child asset poverty is consistently higher than income poverty and that children are at greater risk of asset poverty than other age groups. After adjusting for labor market and demographic factors, U.S. children are at higher risk of asset poverty than children in other countries (ranging from 1.07 times higher than Australia to 1.69 higher than Norway). Counterfactual decomposition methods revealed that reducing the prevalence of single-parent female families in the U.S. would only hypothetically reduce the poverty rate by 2.8 percentage points, suggesting that the high U.S. child asset poverty rates in comparison to other countries are driven by factors unrelated to family structure.