Baby bonds are publicly funded child trust accounts that target children from low-wealth or low-income families. When the children reach adulthood, they can use the funds for wealth-building activities such as purchasing a home or starting a small business. Versions of baby bonds programs currently exist and are in early implementation stages in Connecticut and Washington, DC, and have been proposed in several jurisdictions. In California, a pilot program exists for children who lost a primary caregiver to COVID-19 or have long-term stays in the state’s foster care system. Baby bonds policies were designed in the context of a rich body of evidence that demonstrates positive impacts on asset-building when investments are seeded early for children. However, there are no existing evaluations of the policy because it is nascent where implemented. To fill this gap, researchers Madeline Brown, Marokey Sawo, and Ofronama Biu reviewed three simulation studies that model the potential impacts of baby bonds, with a focus on outcomes relating to racial wealth equity: Zewde (2020),  Mitchell and Szapiro (2020), and Weller, Maxwell, and Solomon (2021). The researchers also reviewed literature of a related early life wealth-building program (namely, child development accounts) to assess outcomes that may be achievable with baby bonds policies.


  • The three simulations find that baby bonds would reduce Black-white racial wealth inequities—by more than half in all cases—though they differ in scale. Because the three simulations had very different methodologies, these projected impacts are imperfect to compare against each other.

  • A review of the literature on a similar program, child development accounts (CDAs), reveals positive impacts on asset building. For example the experimental program SEED for Oklahoma Kids (SEED OK) shows that thirteen years in, the CDA also has a sizable impact on the value of SEED OK 529 assets held for children.

Implications for Policy and Practice

Baby bonds programs are intended to reduce racial wealth disparities by enabling recipients to start young adulthood with an asset, even if they do not come from a wealthy family. The review of three simulations of baby bonds’ impacts reveals that the program would reduce Black-white racial wealth inequities significantly, though researchers have different estimations on the magnitude of that change. Further, baby bonds will be most impactful when they are coupled with other policies aimed at supporting short- and long-term economic well-being. Coupling baby bonds with systemic change and anti-discrimination policies could ensure that people of color reap the same benefits of their assets and reparations would address stolen wealth from Black Americans.