Net Worth Poverty in Childhood: How Duration and Timing Affect Educational Outcomes

Very low household wealth, or net worth poverty (NWP), is the modal form of poverty for American children, yet little is understood about how it is experienced across childhood or its associations with children’s human capital accumulation. 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 examines the influence of NWP exposure and duration across a child’s life course on high school graduation and college attendance. 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 more pronounced 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 was NWP for at least four 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 net worth poverty.