Mounting evidence shows that assets can matter as much as income for a family’s long-term success.37 Income pays the bills, but assets change the future. A family with a savings cushion can move to pursue a better job, invest in a child’s education, or absorb a medical bill without plunging into poverty. Conversely, families without assets are one emergency away from hardship and have difficulty planning beyond immediate needs.
Assets like savings accounts, home equity, or thriving business ownership correlate with long-term financial stability and positive life outcomes. Families with even modest levels of wealth are better positioned to invest in education, weather financial shocks, and plan for the future. Yet millions of children grow up without any financial cushion to support their transition into adulthood. While income is essential, it often isn’t enough to break the cycle of generational poverty if families cannot accumulate some wealth. That’s why baby bonds focus on seeding assets—not just income supplements to the next generation, enabling young people to start adulthood with a meaningful foundation for economic security.
Baby bonds would inject new wealth into Georgia’s communities, allowing young adults to invest in education, homeownership, and entrepreneurship. Each year, a new cohort of 18-year-olds could collectively gain more than a billion dollars in total wealth38, stimulating local economies. This influx of capital could reduce student debt, increase homeownership rates, support small business formation, and enhance financial stability across the state. The debt-reducing power of baby bonds improves long-term economic security and increases disposable income, benefiting both individuals and local businesses, people and the economy.
Homeownership, Entrepreneurship, Asset Building
A baby bond account with just $10,000-$15,00039 by adulthood could serve as a down payment on a starter home in many parts of Georgia. Early homeownership helps young families build equity, which is a primary driver of intergenerational wealth. Baby bond recipients would own homes sooner and accumulate more equity by mid-life, strengthening communities through greater housing stability and increased property values. Additionally, increased homeownership leads to higher rates of civic engagement and neighborhood investment.
Supporting Entrepreneurship and Small Business Growth
Lack of startup capital is a major barrier for young entrepreneurs. With baby bonds, many Georgians could access the capital typically needed to start a business, fueling small business creation in historically across the state. Since 77 percent of small businesses rely on personal savings to launch, baby bonds could enable more increased diverse business ownership and job creation.40 Whether recipients use funds to open a storefront business or invest in digital entrepreneurship, baby bonds provide the necessary seed capital to turn business ideas into reality.
Local Economic Stimulus and Community Revitalization
Adults with baby bonds would spend and invest in their local economies, purchasing goods, securing housing, and starting businesses. This targeted wealth infusion could revitalize neighborhoods that suffered from disinvestment, particularly in historically Black and rural communities. Areas with historically limited financial resources would see increased consumer spending, better credit access, and overall economic improvement. Additionally, recipients using funds for wealth-building activities—like education, homeownership, or business investment—would experience higher incomes and net worth over time, further contributing to economic growth and stability in Georgia.
Fueling Long-Term Economic Growth
A wealth-building policy like baby bonds benefits the broader economy by expanding ownership, increasing consumer spending, and encouraging investment. When young people have capital, they are more likely to stay in their communities. Simulations suggest that Baby Bonds could reduce wealth concentration at the top while strengthening the middle class.41 Every Georgian would benefit from higher earnings, increased tax revenues, and a more dynamic economy.
Evidence from Other Initiatives
Baby bond policy is not an entirely new concept, but it builds on real-world experiments with Children’s Savings Accounts (CSAs), trust fund programs, and individual development accounts (IDAs).42 The idea of an endowment at birth has been tested. In the United States, many states and cities have launched CSAs, typically aimed at college savings. For instance, San Francisco’s Kindergarten to College program automatically opens a savings account with $50 for every public kindergarten student.43 Similarly, Maine’s Alfond Scholarship and programs in states like Oklahoma and Pennsylvania provide small deposits for children at birth or school entry.
These CSA programs, while modest in dollar amounts, have demonstrated important lessons: automatic enrollment leads to near-universal participation, and even minimal seed deposits spur families to contribute and engage in financial planning for their children.44 In Oklahoma’s SEED for Oklahoma Kids (a randomized control trial), every child in the treatment group received $1,000 in a 529 college account at birth. By toddlerhood, virtually 100 percent of those children had an account (compared to just 3 percent of the control group), and their average college savings (including the seed money) was about $1,040 versus only $13 for kids that were not enrolled. This shows the power of making saving automatic and funded – it creates a future asset that families would otherwise never have.
Baby bonds take these concepts further by providing larger dollar amounts and expanding the use of savings for wealth-building purposes in young adulthood. Several jurisdictions have moved to enact or explore baby bonds policies:
- Connecticut became the first state to pass baby bonds into law in 2021, with plans to invest $3,200 at birth for every baby born on Medicaid (approximately 15,000 babies a year). Connecticut’s program, once funded, is expected to yield around $10,000-$11,000 per beneficiary by maturity at age 18 for approved uses (education, homeownership, business, or retirement).45
- At least nine states have considered baby bonds legislation in recent years, often with bipartisan interest. This momentum is fueled by simulation research indicating strong potential impacts.
- A national baby bonds program (with sliding-scale contributions up to $50,000 for the lowest-wealth families) would virtually eliminate the racial wealth divide among young adults. Specifically, the median wealth divide between White and Black young households could shrink by over 90 percent, from a $43,100 divide to about $21,300. At the same time, baby bonds would raise the net worth of all young adults in the bottom 90 percent of the country’s wealth distribution. In other words, baby bonds can boost those who have least without harming the broader economy; in fact, they infuse new capital into communities that need it most, likely yielding positive economic spillovers.46
For Georgia, baby bonds offer a policy tailored to our state’s efforts to uplift rural and low-wealth communities.
Consider some of Georgia’s unique wealth challenges: wide gaps between booming counties and struggling ones across the state. Traditional economic development hasn’t solved these problems – for instance, job growth in Atlanta doesn’t automatically translate to wealth for a family in Albany or a renter in Savannah. Every child born into a poor family in Georgia would, by design, accumulate a substantial financial asset by adulthood through baby bonds. This is essentially a publicly funded trust fund for the least advantaged, something that wealthy families routinely provide to their heirs, but low-wealth families cannot.
Importantly, Baby Bonds would help bridge Georgia’s racial wealth divide while also benefiting low-wealth people of all races. For example, many low-income White families in rural Georgia would receive the same asset boost for their children as low-income Black families in Atlanta’s Westside. Likewise, bringing rural areas into the economic mainstream would expand Georgia’s tax base and labor force. Baby bonds guarantee that every child has a fair start, thereby fostering a future where success is determined more by talent and effort and less by parental wealth.
