Closing the Racial Wealth and Debt Gaps: A Multi-Generational Policy Approach

March 2022

Wealth and debt disparities are core to the fabric of the United States. Particularly, people of color have experienced significantly worse financial outcomes as a result of manufactured racial wealth and debt gaps that persist to this day. This paper examines two policy proposals and the extent to which they might lessen these racial wealth and debt divides. Baby bonds are a policy idea that has gained familiarity and popularity since about 2019 and offers an opportunity to build wealth starting at birth. Community land trusts, a lesser-known policy solution, have been adopted on a wider scale, but its potential impacts on the racial wealth gap have been studied much less. This paper will analyze the potential for both of these policy ideas to narrow the racial wealth and debt gaps and the feasibility to implement these solutions in service of lessening said gaps.