Baby Bonds & Children’s Savings Accounts — A Proposal for New Hampshire

By Granite State Report – Policy Innovation

Every child deserves a nest-egg.
This report examines the problem, the evidence base, and lays out a detailed policy proposal for the state of New Hampshire, complete with cost & funding discussion, implementation issues, opposition & rebuttals, and metrics for success.

1. The Problem

1.1 Wealth inequality at birth

In the United States, and in New Hampshire, the reality is that wealth is largely inherited. Children born into families with assets have a major head-start; children born into low-asset or no-asset households begin adulthood with a structural disadvantage. That disadvantage stacks up over time: fewer savings, less ability to invest in education or entrepreneurial ventures, less cushion against economic shocks.

Nationally, the racial wealth gap is extreme: young white Americans hold substantially more wealth than young Black Americans (one study estimated ~16× more at the median). (Urban Institute)
Even for children of any race, low- or moderate-income families often lack savings for higher education, homeownership or startup capital.

1.2 New Hampshire’s context

New Hampshire has one of the highest median household incomes in the U.S., which superficially suggests strong economic standing. But that does not mean wealth is evenly distributed or that all children in the state start life with asset buffers.

There is significant wealth inequality.
The state currently does not have a statewide children’s savings account (CSA) program or a baby-bonds policy.
Families of modest means have to rely on traditional savings vehicles like 529 college-savings plans — but those tend to benefit higher-income households disproportionately (because you need “extra” money to save).
Without savings, many young adults face higher-cost borrowing, low educational attainment, late home-buying (if any), or no business start-up capital — all of which limit both individual advancement and broader economic growth.

Thus: the problem is two-fold. First, unequal starting points in wealth mean many children begin adulthood at a disadvantage. Second, the absence of a structural program in New Hampshire means the state is missing an opportunity to create universal asset-building from birth.

1.3 Why savings matters

Multiple research efforts show that even small amounts of savings for children correlate with significantly better outcomes in education and asset-building. One key example: children in families with modest savings ($1-$499) are over three times more likely to enroll in college and more than four times more likely to graduate, compared to children without savings. (NYC Kids RISE)
In short: asset-building matters, not just income.

2. Evidence & Literature Review

Let’s review what the evidence — academic, policy-analysis, real-world pilot programs — tells us about children’s savings accounts (CSAs) and baby-bonds policies, so we can build a fact-based foundation for the New Hampshire proposal.

2.1 Definitions

Children’s Savings Accounts (CSAs) (or child development accounts) – These are savings or investment accounts established for children, often with initial seed deposits and sometimes matched savings by families or communities. The child’s account grows over time and can be used for education, home-ownership, or other wealth-building activities. (Urban Institute)
Baby Bonds – These are publicly-funded trust accounts set up for every child (or a very broad cohort) at birth, with fund access restricted until adulthood (e.g., age 18). At maturity the funds can be used for wealth-building activities (post-secondary education, home purchase, business startup). The distinguishing features: automatic enrollment, progressive structure (larger deposits for lower-wealth households), universal or near-universal eligibility, and flexible asset-building uses. (Stanford Center on Longevity)

2.2 Empirical evidence & policy reviews

A comprehensive policy brief from the Urban Institute reviews the “state of baby bonds” and related programs. It finds that the design matters enormously: universal eligibility, substantial endowments, automatic enrollment, progressive funding. Smaller-dollar CSA programs show positive associations with savings, higher expectations, and some educational improvements — but they have not yet demonstrated large effects on overall racial wealth disparities. (Urban Institute)
Research shows that just having a savings account (even small) changes parental expectations, student identity (“I am going to college”), social capital, and community norms. For example, one CSA evaluation found that families with account balances of any amount had higher expectations for their children’s educational attainment. (Center for Assets, Education & Inclusion)
Regarding baby bonds specifically: simulations suggest that a well-designed system could materially reduce wealth gaps. For example, a national baby bonds policy has been estimated to reduce the median young-white vs young-Black wealth ratio from ~16× to ~1.4× in one scenario. (Brookings)
On program design: key elements matter. Some analyses stress that funds must be “substantial” (not trivial), must allow flexible asset uses beyond just college (so they capture homeownership, business start-up), must ensure automatic enrollment, and must be progressive (larger seed for low-wealth children). Without these, benefits are muted. (Urban Institute)
Real-world example: the NYC Kids RISE “Save for College” program (beginning in New York City) provides widely-available scholarship/savings accounts for kindergartners, with automatic enrollment, an initial $100 seed deposit, and family/community matching. Research shows children with $1-$500 had higher college-going / college-graduation rates. (NYC Kids RISE)

2.3 Lessons learned & limitations

Even strong pilot successes of CSAs are still subject to selection bias (families who save may already be more engaged). Rigorous RCTs are fewer.
Wealth gaps are multifactorial: not just absence of initial capital but structural discrimination, differential returns to assets, barriers to home-ownership, differential access to credit, and more. Baby bonds alone will not solve all of this—but they can be a structural boost. (Urban Institute)
Implementation matters: administrative cost, outreach (families must know about the program), investment vehicle design, fund access rules, and fund uses all affect outcomes. Some international programs (e.g., the UK Child Trust Fund) saw issues with engagement and low awareness. (See section on opposition/lessons below.)
Linkage to families and communities: The “identity effect” (child sees themselves as future college-goer) is powerful — not just the dollars. Thus, savings programs often pair with financial education and community engagement. (Urban Institute)

2.4 Key take-away for New Hampshire

For New Hampshire, this means: A baby-bonds/CSA policy is not just an “account for kids.” If properly designed, it can be a structural lever to promote asset equity, improve educational outcomes, and stimulate long-term economic growth. But the design must be thoughtful: seed size, progressive contribution, restricted asset uses, automatic enrollment, integrated with schools/communities, with administrative capacity and political will to sustain it.

3. Case Study: NYC Kids RISE Save-for-College Program

To ground the discussion in something concrete, let’s look at how one program works, what it has achieved, and what lessons it offers for New Hampshire.

3.1 Program overview

The NYC Kids RISE Save for College Program is a partnership in New York City (public schools + nonprofit) that provides each kindergartner in participating schools with an automatically-enrolled savings/scholarship account. The key elements:

Initial deposit: $100 automatically into the “NYC Scholarship Account” for each eligible K student, unless opted-out. (NYC Kids RISE)
Families can link their own savings account for further contributions; communities/businesses can make “community scholarship” contributions. (NYC Kids RISE)
Program pairs savings with financial education (starting in kindergarten) and community/school engagement. (NYC.gov)
The savings funds are invested via the NY 529 Direct Plan. (NYC Kids RISE)
The program began as a pilot in 2017 in District 30 (Queens) and since expanded citywide in 2021–22 school year. (web)

3.2 Evidence of impact

The program cites research: “children with even a small savings account ($1-$500) are three times more likely to enroll in college and more than four times more likely to graduate.” (NYC Kids RISE)
A separate evaluation by NYC Opportunity (NYC Mayor’s Office of Equity) notes that the model draws on evidence from CSAs, financial education, and social capital research. (NYC.gov)
The program also indicates that the account helps build a “college-going identity” and supports higher educational expectations among children and families.

3.3 Lessons and Limitations

The initial seed ($100) is helpful but small — it won’t by itself yield a massive nest-egg by age 18. It is more of a behavioral/expectation-shifting device than full structural asset transfer.
Automatic enrollment helps mitigate opt-in bias.
The program still depends on families being aware, activating the account, making contributions, and accessing the funds later.
Because funds are restricted to education/career training (in the NYC program), uses are narrower than some baby-bonds models which also include homeownership and business start-up.
The full long-term outcomes (homeownership, business formation) are not yet mature for this program since many recipients are still in school.
Administrative capacity, fund choices, outreach, and community engagement are key to success.

3.4 Relevance for New Hampshire

From this case study we glean:

Automatic enrollment and seed deposit are possible.
Seed size can be modest and still have behavioral impact—but if the policy goal is meaningful asset transfer by adulthood, deposit size may need to be higher.
Integrating with schools/communities (financial education, engagement) strengthens the effect.
If New Hampshire pursues a baby-bonds policy (which is broader than CSAs) this NYC program gives evidence on one dimension (education savings) but we’ll need to scale up for broader asset uses (home and business) and size.

4. Proposed Policy for New Hampshire

Now we get to the heart of the matter: how could New Hampshire implement a baby-bonds/children’s savings account (CSA) policy tailored to its context? Here is a detailed proposal.

4.1 Policy objectives

Ensure that every child born in New Hampshire starts life with an asset of value — a nest-egg of publicly funded capital.
Strengthen asset-building capacity for young adults: enabling education/training, homeownership, or starting a business.
Narrow wealth inequality at birth and into adulthood — especially for children born into low-wealth families/communities of color.
Encourage financial literacy, family savings culture, school-based engagement, and community investment in children’s future.
Stimulate the state economy by enabling greater college completion, home-buying, entrepreneurship, and asset accumulation.

4.2 Program design — core features

Based on best practice and evidence, the following design features are recommended:

a) Universal seed account at birth.
Every newborn in New Hampshire receives a state-funded trust account with an initial deposit of $2,500. (This is in line with the proposal in your book, Law 18.) The account is indexed for inflation and invested conservatively (for example, state-issued bonds or a low-risk fund).

b) Progressive annual contributions.
In addition to the seed deposit, children from low-income families receive additional annual state contributions — for example, $500 per year until age 18 (or until college enrollment) for families below a defined income threshold. Higher-income families would receive only the base deposit (or no additional contributions) to preserve progressive structure.

c) Children’s Savings Accounts in schools/community.
Every elementary school student (in public schooling) is automatically enrolled in a CSA program seeded with $50–$100, along with financial education modules for the student and their family. Partner with schools, community organizations and nonprofits to manage, engage, and match contributions.

d) Restricted use at adulthood (age 18).
At age 18, the funds can be accessed only for approved asset-building uses: higher education (college or vocational training), purchasing a first home, or starting/expanding a small business. Withdrawals for non-approved uses would be disallowed or heavily penalized. This ensures the funds stay focused on longer-term asset-building rather than consumption.

e) Public–private matching and incentives.
Encourage philanthropic organizations, employers, and community foundations to contribute matching funds (e.g., $1 for $1 up to a limit) to the CSA component, or into the state Baby Bond Fund. Create tax incentives for donors to the Baby Bond Fund.

f) Automatic enrollment and minimal opt-out.
To maximize coverage and reduce administrative burdens/selection bias, the program enrolls children automatically at birth (for the baby-bonds element) and upon school entry (for the CSA element). Families may opt-out if they choose, but default is enrollment.

g) Administration and investment vehicle.
The state should establish a dedicated “New Hampshire Baby Bond Trust” (or integrate into a state-managed savings/trust infrastructure). Use low-cost investment vehicles, minimal fees, transparent reporting, and annual statements to families. Ensure account portability: if a family moves out of state, there are rules for transfer or maintenance.

4.3 Funding strategy

One frequent objection is cost. Here is a practical funding strategy:

Potential sources:

Unclaimed property funds (the state often holds unclaimed cash/assets).
Progressive estate tax reform (higher estate taxes on large inheritances) – deposit the revenue into the Baby Bond Fund.
Utilization of funds from targeted revenue sources (for example, state lottery surplus, “sin taxes”, or earmarked general fund appropriations).
Public–private partnerships: philanthropic seed contributions, corporate matching, community foundations.

Cost estimation example:

Suppose ~12,000 births per year in New Hampshire (approximate ballpark).
At $2,500 per child seed = $30 million per year.
Additional $500 annual contribution for low-income children (assuming 25% of births qualify) ~ 3,000 births × $500 = $1.5 million per year.
Thus annual cost ~ $31.5 million (pre-investment growth) plus administrative cost.
Investing deposits conservatively over 18 years could reduce net state outlay per child due to compounding.
Over the long term, increased college completion, business formation, homeownership would presumably generate higher state tax revenues, lower social-service cost burdens, and higher economic growth.

4.4 Implementation roadmap

Legislative authorization. Pass enabling legislation that creates the Baby Bond Trust, defines eligibility, deposit structure, investment rules, allowable uses, fund governance, reporting requirements.
Set up administrative infrastructure. Partner with state treasurer’s office, department of revenue, birth registry, state education department for automatic enrollment, account management contractor.
Seed first cohort. For newborns born after program effective date (e.g., Jan 1 2027) deposit $2,500. In parallel, launch school-linked CSA program for K-6 students (seed $100).
Financial education & school/community integration. Develop modules (age-appropriate) for students and parents/families, integrate into school curriculum. Encourage matching programs in communities.
Monitoring and evaluation. Define metrics (see next section), set up data collection, annual reporting to legislature and public.
Outreach and awareness. Statewide campaign to families, schools, community organizations. Ensure families know about the program, automatic enrollment, how to track account, how the funds can be used at 18.
Ongoing governance and evaluation. Annual fund reports (performance, growth, usage, demographics). Interim evaluations at 5- and 10-year marks. Adapt policy as needed.

4.5 Metrics for success

Coverage rate: percentage of eligible newborns (and K-grade students) enrolled.
Account growth: average account balance at age milestones (5, 10, 15, 18).
Education outcomes: college enrollment and graduation rates for participants vs non-participants (control group).
Asset formation: at age 18–25, share of participants who purchase a first home, start a business, or complete vocational training vs control.
Wealth-gap reduction: measuring asset differences (net worth) between low-wealth vs higher-wealth participants.
State ROI metrics: higher state tax revenues, reduced dependence on social-safety-net programs, increased entrepreneurial activity.
Behavioral outcomes: parental savings behavior, student attitudes about college/homeownership/business, school engagement.
Program cost/benefit: administrative cost per child, return on investment in terms of economic growth and tax revenue.

5. Impact on Citizens & State Economy

5.1 Direct impacts

✅ Reduces wealth inequality: Universal seed deposits with progressive contributions give children born into low-wealth households an asset starting point. Over 18 years, that asset can grow and provide meaningful capital at adulthood.
✅ Boosts education and completion: Evidence indicates small savings correlate with increased college enrollment and graduation. By equipping children with an asset (even modest), you raise expectations, identity, and capacity.
✅ Encourages entrepreneurship and home ownership: By allowing fund use for business start-up or first home purchase, you open pathways to asset-building beyond just education.
✅ Strengthens family and community culture of savings: School-linked CSA elements and matching encourage families and communities to engage in savings for children — shifting norms.
✅ Stimulates state economy: More college-educated workers, more homebuyers, more small-business formation → higher tax base, greater economic mobility, less reliance on state safety net.

5.2 Broader systemic benefits

Intergenerational mobility: By breaking the “asset-zero start” for many children, the state helps interrupt the cycle of wealth disadvantage.
Education-economic-asset nexus: Better education → better jobs → more savings → homeownership/business → wealth accumulation → climbing the asset ladder.
Tax revenue growth & reduced social cost: If more adults are working in higher wage jobs, owning homes, paying taxes, the state will recoup some of its investment in the program via broader economic growth.
Community empowerment: Under-served communities of colour and low-wealth communities would benefit disproportionately from progressive deposit design — promoting equity.
Brand and competitiveness: New Hampshire could position itself as a forward-thinking state on asset-building, family-wealth policy, education-economy linkage — attractive to young families.

6. Potential Opposition & Rebuttals

6.1 Objection: Cost / taxpayer burden

Objection: A baby-bonds program is too expensive and would require tax increases or divert funds from other priorities.
Rebuttal: While the upfront cost is non-trivial, the long-term benefits (higher education attainment, homeownership, business creation, greater tax revenue) justify the expense. Many funding strategies (unclaimed property, estate tax reform, blended public-private matching) can reduce reliance on new general taxes. Also, because the deposits are invested and grow over time, the state’s net present cost per child is lower than the nominal deposit. Finally, the cost should be viewed as an investment in human capital and economic infrastructure, not simply “spending.”

6.2 Objection: Families should save on their own — government shouldn’t “socialize” savings

Objection: It’s the family’s responsibility to save; government should not give money to every child.
Rebuttal: The fundamental issue is that many children begin life with zero assets. Wealth is highly unequal at birth: children born into low-wealth families lack the asset base that many others have. Without structural intervention, the playing field remains tilted. This policy does not replace family savings — families can still save additional amounts. It simply ensures that every child starts with something meaningful. Moreover, because the seed deposit is universal (not just for the very poor), it has political legitimacy and avoids stigma.

6.3 Objection: Government deposits might reduce private savings or discourage family contributions

Objection: If children already get a state deposit, families may feel less urgency to save themselves or private philanthropy may fall.
Rebuttal: Evidence from CSAs (for example the NYC Kids RISE program) suggests that the policy builds a culture of savings rather than crowding it out. The seed deposit signals that savings matter, which in many cases encourages additional contributions (by families, community, business). Program design can include matching incentives, tax benefits for private contributions, and outreach to encourage additional saving rather than substitute it.

6.4 Objection: Usage restrictions might limit flexibility and burden beneficiaries at age 18

Objection: Restricting fund usage (education, home, business) may limit young adults’ freedom to use the money for other needs and reduce utility if their path is different.
Rebuttal: The restriction is purposeful — the goal is asset-building, not consumption. Allowing unrestricted use could result in funds being used for non-wealth-building purposes and reduce long-term impact. If program designers still want flexibility, a small portion (e.g., 10 %) could be available for “other purposes,” but the bulk should stay focused on education, home, business. Additionally, clear guidelines and financial education from an earlier age helps prepare young adults to make the best use of the funds.

6.5 Objection: Implementation complexity, fraud risk, administrative cost

Objection: Setting up, administering and monitoring such a program is complex, and states may lack capacity.
Rebuttal: True — but many states already manage 529 plans, unclaimed property funds, trust funds and children’s programs. A baby-bonds program can piggy-back on existing infrastructure. Administrative cost should be factored in but is manageable relative to expected benefits. Transparent governance, annual audits, and publicly-available reporting can mitigate fraud risk. Piloting the school-linked CSA portion first allows operational learning.

7. Why This Matters for New Hampshire

As you as a state-level editor and policy thinker (Dexter) know, statewide policy innovations such as this matter for a number of practical reasons:

New Hampshire must stay competitive in talent attraction, business formation and homeownership. A program like this positions the state to attract families who value progressive, forward-thinking asset-building policy.
It helps leverage education policy into economic mobility — more young adults with credentials, less out-migration for education or jobs, stronger retention of talent.
It responds to increasing public concern over wealth inequality, affordable homeownership, and small business access. This program addresses all three in one package.
By anchoring in children’s earliest years (birth + elementary school), it emphasizes prevention rather than remediation — cheaper long-term, more effective.
It builds on the school system and community institutions (for the CSA portion), aligning cross-sector policy (education, finance, economic development).
As New Hampshire has no existing statewide CSA/baby-bonds structure, implementing this now allows the state to be a leader rather than a follower.

8. Risks, Mitigations & Implementation Challenges

8.1 Risk: Low take-up or engagement

Challenge: Families may not activate the account, may not participate in additional savings, may forget the account exists.
Mitigation: Automatic enrollment is key. The state should send annual statements to families, integrate with school communications, partner with community organizations, include financial-education from early grades, and use human-centred design to make account activation and monitoring simple.

8.2 Risk: Funds used for non-asset purposes or lost/unclaimed

Challenge: When youth turn 18, they may withdraw funds for consumption, or fail to claim the funds at all (as seen in other jurisdictions).
Mitigation: Use restricted-purpose access (education, home, business) with appropriate verification. Use outreach in the months leading up to age 18. Create default options (if the child is inactive) that roll funds into an appropriate asset vehicle or charitable pool, rather than cancellation. Track outcomes.

8.3 Risk: Investment returns below expectations

Challenge: If funds are invested poorly or fees are high, the account balances may be substantially less than expected.
Mitigation: Invest conservatively in low-fee vehicles. State treasurer’s office should evaluate investment options. Build transparency into investment performance. Consider using pooled trusts to reduce cost. Ensure administrative efficiency.

8.4 Risk: Political/financial sustainability

Challenge: The program requires long-term state funding and commitment across administrations. Budget pressures or political changes could erode the program.
Mitigation: Create funding mechanisms that are relatively stable (e.g., use unclaimed property, estate tax earmarks, private matching). Include program in strategic planning and budget framework. Provide annual public reporting to maintain accountability and visibility. Engage a broad coalition of stakeholders (schools, business, philanthropy) to build cross-partisan support.

8.5 Risk: Doesn’t fully close wealth gap

Challenge: Some critics will say even a well-designed program won’t eliminate structural inequalities like discrimination in housing, labour markets, or credit access.
Mitigation: Acknowledge upfront that the policy is not a panacea — but a significant lever. Design it as part of a broader asset-building ecosystem (education, income support, workforce development, housing policy). Build evaluation into the policy design so that lessons can inform subsequent policy improvements.

9. Conclusion

A baby-bonds/children’s savings account policy for New Hampshire is both timely and practical. By aligning with best evidence, careful design, and strong implementation, the state can create a universal asset-building platform that gives every child a meaningful head‐start. For children born into low-wealth households, it becomes a structural opportunity; for the state, it becomes an investment in human capital, economic mobility and broad-based growth.

Your proposed framework (seed deposit at birth, progressive contributions, school-based savings accounts, restricted use at adulthood, public–private matching) aligns well with the research. The key will be execution: automatic enrollment, robust outreach, prudent investment, and sustained governance. If New Hampshire takes this step, it could become a national model of state-level innovation in asset equity.

Baby Bonds Program: How Every Child Could Get $1 000 Savings Account

Note: This video gives a broad national-scale view of baby-bonds proposals; our state-level adaptation refines and tailors the design for New Hampshire’s context.

References

“The State of Baby Bonds” (Urban Institute). (Urban Institute)
“What Do We Know About Baby Bonds? A Condensed Literature Review” (University of Michigan Library). (Deep Blue)
“The Need for Baby Bonds in the United States” (Campaign for Children Fact Sheet). (Campaign For Children)
“What Are Baby Bonds? What Are Trump Accounts?” (Brookings). (Brookings)
“NYC Kids RISE Save for College Program – What is the Save for College Program?” (NYC Kids RISE). (NYC Kids RISE)
“Child Savings Accounts: Overview and Analysis” (Congressional Research Service). (Congress.gov)
“Baby Bonds and Children’s Savings Accounts Share a Similar Origin Story” (Center on Assets, Education & Inclusion). (Center for Assets, Education & Inclusion)
Other sources: Yahoo Finance, Forbes discussion around baby-bonds. (Yahoo Finance)