The Balance Sheets of Low-Income Households: What We Know about Their Assets and Liabilities. Introduction

11/01/2007

Building up assets and avoiding excessive debt can help families insure against unforeseen disruptions, increase economic independence, and improve socio-economic status. Assets are especially important for low-income families because they can limit the likelihood of material hardships. However, a comprehensive portrait of the balance sheets of low-income households does not exist. There is little available information on crucial questions, such as: What are the asset holdings of low-income households? Do a large proportion of American families do too little saving and investing to create a healthy balance sheet? This report begins to paint a portrait of the assets of low-income households by synthesizing current literature in answering the following two research questions: (1) What are the significant assets of low-income households? And (2) what are the significant liabilities of low-income households? It describes what is known and not known about assets in these households and sets the stage for future research and policy discussion.

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