Adverse Childhood Experiences and Long-term Economic Well-being: Understanding Mechanisms to Explain Group Differences in Net Worth

Past research has documented that Adverse Childhood Experiences (ACEs) impact cognition, education, relationship stability, employment, and earnings. Less research has focused on how these impacts affect measures of long-term economic well-being that capture cumulative disadvantage. This study therefore uses the National Longitudinal Study of Youth 1979 Cohort to investigate the net worth of individuals near the end of their careers, comparing those with and without ACEs. The study uses a Blinder-Oaxaca Decomposition to investigate the underlying mechanisms for any group differences. The findings suggest that observed differences in education, marital instability, and lifetime earnings explain significant portions of the net worth disparities between those with and without ACEs. The fact that those experiencing ACEs also get less out of normally beneficial aspects of their families – such as higher income – also plays a significant role. The results suggest that no “silver bullet” exists to reduce the impact of ACEs on long-term economic well-being. Interventions that simultaneously prevent child maltreatment and increase social and emotional development – like high-quality preschool – are more likely to be effective than those targeting any single aspect of individuals’ lives.