Interview with Signe-Mary McKernan | May 20, 2025
Baby Bonds are an increasingly popular bipartisan government policy in which every child born into poverty receives a publicly funded trust account at birth. This “start-up capital” allows young adults to access education, home ownership, and entrepreneurship, enabling them to build wealth and lead lives that are hopeful, fulfilling, productive, prosperous, and self-directed. Follow our Baby Blogs series to learn about the vision, politics, and people behind Baby Bonds and their transformative impact on the lives of young people, their families, communities, and our economy.
For this installment of Baby Blogs, we spoke with Signe-Mary McKernan, vice president of the Family and Financial Well-Being Division at Urban Institute, about the core principles and evidence-based impacts of early wealth-building trusts and accounts—including Baby Bonds and child savings accounts.
What sparked your interest in wealth-building strategies?
It started with some career advice from a graduation speaker: “At least once a year, stop and think—are you doing the best you can? If not, change that.” This advice inspired me to leave my first job in business—even though it was a good, fun job—for a PhD in economics. My dissertation research evaluated the Grameen Bank and other microcredit programs that provide access to credit for people with low-incomes, including women. I was inspired by the pride and entrepreneurship that program participants shared. Coupled with the powerful evaluation evidence, I was driven to focus my career on access to credit, assets, and wealth. The Grameen Bank and Muhammad Yunus were later awarded the Nobel Peace Prize for their work in Bangladesh.
Tell us about your current work and its impacts on the field.
After three years at the Federal Trade Commission working on access to credit in the United States, I ultimately landed at the Urban Institute, where I have over 500 inter-disciplinary collaborators focused on research, data, and communicating evidence for impact. The Urban Institute is a research-to-impact institution founded on one simple idea: To improve lives and strengthen communities, we need practices and policies that work.
These are some of the Urban Institute’s impacts I’m most proud of:
- Our evidence helped launch SaverLife, a non-profit organization that uses technology to improve financial health for 650,000+ people living on low-to-moderate incomes. The program’s communications director told us that “we’re not just using your research; it’s the foundation of our work.”
- Urban Institute data on household debt was cited across North Carolina as state legislators voted to pass Medicaid expansion in the state. Medicaid expansion has been shown to reduce medical debt in collections and improve financial well-being.
- In 2019, and again in 2023, Michigan relaxed and/or removed savings penalties from their safety net programs based on our evidence about the unintended consequences of SNAP asset limits.
- The D.C. Council unanimously approved the Child Wealth Building Act to establish Baby Bonds. The bill creates a trust fund for each new child born to a lower-income family after October 1, 2021. Urban Institute evidence and testimony highlighted the opportunity to build wealth through Baby Bonds.
How has the landscape changed since you started in the wealth and financial well-being space?
Since I completed my dissertation in 1996, wealth building has improved for families near the bottom of the wealth distribution (from $116 in 1995 to $450 in 2022 dollars) and those in the middle (from $111,868 to $192,700), though far less than for those near the top (from $738,733 to $1,936,900) and for the wealthiest families (from $4,759,990 to $13,615,400). Our country must build more wealth near the bottom and middle of the wealth distribution so that all Americans can benefit from the hope and opportunity that comes from wealth. As our recent election showed, many people are desperate for dramatic change in part because they feel our economy is not working for them. Dreams of college, homeownership, small business ownership, and a secure retirement feel out of reach.
What can we do to ensure all Americans have access to opportunity and wealth?
Early wealth-building trusts (such as Baby Bonds) and accounts (such as child development accounts) are created for children to be used for wealth-building activities when they reach adulthood. They build on decades of evidence and are being implemented in states across the country and proposed at the federal level. Policymakers can ensure that everyday Americans, not just the already wealthy, are able to build assets by ensuring that early wealth-building policies follow these core principles developed by leading scholars and practitioners, including:
- Automatic enrollment and universal eligibility: all children are included and babies are automatically enrolled by federal, state, or local government.
- Financial progressivity: low-and-moderate-income families receive the largest benefit—both in direct expenditures and tax expenditures.
- Flexible use of funds for wealth building: homeownership, entrepreneurship, education and training, and retirement security.
- Substantial initial government deposits.
What is one thing about wealth that everyone should know?
Wealth is not just for the wealthy. People need both income and wealth to thrive.
Signe-Mary McKernan is vice president of the Family and Financial Well-Being Division at the Urban Institute, which ensures that children, adults, and families are safe, supported, and financially secure so they have opportunities to thrive and prosper. She is a wealth and financial well-being expert with two decades of experience researching the impact of wealth-building programs and policies on family well-being. She coedited the book Asset Building and Low-Income Families, coauthored a chapter in the Oxford Handbook of the Economics of Poverty, and has published her research in refereed journals including the Journal of Public Economics, American Economic Review Papers and Proceedings, Demography, and Review of Economics and Statistics. She has testified before the United States Congress and the District of Columbia Council and been cited in media outlets such as the New York Times, Washington Post, Forbes, and Time. She has a bachelor’s degree in mathematical economics and Scandinavian literature from UC Berkeley and a PhD in economics from Brown University.
If you missed previous installments of our Baby Blogs series, read them here.
To share feedback on this blog, or for questions about Baby Bonds, email David Radcliffe at radclifd@newschool.edu.
To learn more, explore our Baby Bonds resources.