Economists Darrick Hamilton and William Darity Jr. developed the modern baby bonds proposal. Their idea targets wealth, not income, because wealth gaps are much wider and are passed down across generations. Senator Cory Booker introduced a federal version, the American Opportunity Accounts Act, in 2018.
Connecticut launched the first state program. For every child born on or after July 1, 2023, whose birth was covered by HUSKY, the state's Medicaid program, Connecticut invests up to $3,200. The state treasurer manages the money. Young adults can claim it between ages 18 and 30 to buy a home in the state, start a business, pay for education or save for retirement.
Baby bonds are race-neutral on paper. But because Black families are overrepresented among low-wealth households, researchers project the accounts would narrow the racial wealth gap. Critics note they cannot fully close it without larger measures such as reparations.