The Indicator from Planet Money A baby bonds bonanza
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Jul 28, 2025 Explore the excitement of baby bonds, a new initiative giving newborns government-funded accounts to combat wealth inequality. Delve into Connecticut's innovative program targeting Medicaid births, boosting future financial health. Discover how these bonds could help close the racial wealth gap and support education and homeownership. Gain insights into the broader implications of wealth disparity and the potential benefits for families from all backgrounds. Could this approach be a game-changer in fostering generational wealth?
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Nolan: First Connecticut Baby Bond
- Nolan was the first baby to participate in Connecticut's baby bonds program with $3,200 invested on his behalf at birth.
- The account is expected to grow to at least $11,000 by age 18 for education or homeownership.
Baby Bonds Shrink Wealth Gap
- Baby bonds could significantly reduce the racial wealth gap by providing investment accounts growing over time.
- Simulations show this may shrink wealth disparity from 16x to about 1.4x between white and Black young adults.
Wealth's Impact on Life Opportunities
- Wealth shapes access to opportunities like healthcare and housing quality, impacting health outcomes.
- Accumulated wealth allows families to make long-term investments, improving life chances.