Oregon State University has found definite statistical truth to these sentiments and has concluded that over 63% of American children and 55% of Americans are living in asset poverty, just barely making it pay cheque to pay cheque.
Asset poverty means there is little or no financial assets to fall back on in emergencies such as loss of a job or medical crisis. Common financial assets include savings, homes, vehicles, and investments, without these making through a financial crisis is very difficult.
“This is a dimension of financial security that we don’t think about that much, and it’s pretty high. The findings highlight the extent of financial insecurity among American families. These shocks ripple through the family and down to the children.” says co-author David Rothwell.
Many studies have shown that children growing up in poverty are more likely to perform poorly in school and suffer from lower job earnings as adults, and parental asset levels not just overall poverty can influence a child’s academic and career achievements later in life. Stable financial assets provide families with a safety net in case of recession, job loss, natural disaster, medical emergency, and promote a more secure and stable long term social development. According to Rothwell children behave differently and are treated differently by peers when they are financially secure.
Income an asset data was analyzed from over 250,000 households in American, Italy, Norway, Finland, Australia, and the United Kingdom. At 62.9% Australia and America were found to lead the world in child asset poverty among developed nations, followed by the UK at 52.2%, Italy at 48.9%, and Finland at 47.6%; Norway was found to have the lowest rate of child asset poverty at 34.4%.
According to the study published in the journal Children and Youth Services Review, American children were concluded to be at greater risk of living in asset poverty than children born to similar demographics and income brackets in other countries even after accounting for other factors.
“In a global context, the fact of being born in the U.S. puts you at higher risk for asset poverty. It’s especially difficult for families in the U.S. because the social safety net is so thin. Other countries have more robust health insurance systems, unemployment, housing and other social supports,” explains Rothwell.
“The prevalence of asset poverty suggests a need for innovative policies to offset short-term insecurity and promote long-term development,” Rothwell said. “The current policy demonstrations have potential to improve the life chances of children.”
