U.S. families accumulate assets primarily through owning homes, pensions, and cars. The lack of homeownership and pension ownership among low-income families, along with the relatively low car ownership rate, go a long way toward explaining the low asset holdings of U.S. low-income families. It is important to understand the benefits of owning homes, pensions, and cars more fully. Important for undertaking policy initiatives in this area, is an understanding of the incentives and disincentives low-income families face in trying to acquire these assets.
The portraits presented in the report uncover some important differences in outcomes for families that hold secured versus unsecured debt. Future research has the potential to assess the role that different types of assets and debts play in overall asset accumulation, upward mobility, and the well-being of low- and moderate-income families. It may be that some types of debts place families in a position to accumulate wealth while other debts effectively limit or drain wealth.
From a policy perspective, research to evaluate policies that could better replicate the wealth outcomes of moderate-income families for low-income families would be useful. The data often reveal striking differences in asset and liability outcomes for families in the second quintile compared with the bottom quintile.
More broadly, future research could assess and suggest ways to improve the data sources available to study assets, and analyze the determinants of asset holdings, the benefits of asset holdings, and the role of policy in improving the asset holdings and well-being of low- and lower-middle-income families. Reports in the Poor Finances series begin to address some of these topics, but there is additional work to be done.