A Brighter Future with Baby Bonds

How States and Cities Should Invest in Our Kids


Over the past several years, Baby Bonds—publicly funded child trust accounts designed to address racial/ethnic wealth inequality—have gained momentum at the state and local levels. Connecticut and Washington, DC passed the first Baby Bonds policies in 2021 and several other states have proposed legislation. Presented by the Institute and Prosperity Now, this paper provides guidance and context for elected officials, policymakers and advocates to help them craft effective state-and local-level Baby Bonds proposals. It lays out the essential elements to include in state- and local-level Baby Bonds legislation and key design considerations for programs, describes how Baby Bonds complement policies that address the more immediate financial needs of households with low incomes, and discusses how to align state and local proposals with a potential national Baby Bonds program.  

The original version of this paper was drafted in late 2021 and published in January 2022, when states were just beginning to discuss and pass the first pieces of Baby Bonds legislation. Since then, Connecticut and DC have started to implement their programs, and a host of other states have had task forces, advisory groups and lengthy policy debates focused on Baby Bonds legislation. This updated version covers much of the same ground as the original version but also reflects learnings from the field over the past two years.

Download the Paper >>