Rationale and Raw Data
In this section, we review in detail all 68 indicators behind the state grades and rankings are reviewed in detail. For each indicator, a table containing the raw data is provided, along with the following:
- rationale—why the indicator is important to track, other factors to which it might relate
- measure—exactly what each indicator reflects
- source—how the data was obtained
68 Measures Used
Asset Outcomes Index
Financial Assets
The indicators in the financial assets grouping provide direct state-level estimates of household wealth accumulation, asset poverty, and the distribution of assets between various population groups. These are first-time estimates of wealth indicators that have never been available at the state level.
Homeownership Capital
The homeownership capital measures in the Report Card assess how many of a state's residents own their own home, the average level of wealth accumulated in homes, and the extent to which homeownership is a source of equity for all of the state's residents. Measures of homeownership capital are included in the Report Card because home equity is the single largest source of wealth for most Americans. According to the Census Bureau, home equity accounts for the largest share of net worth in U.S. households, totaling 44.4% of measured net worth.
Human Capital
The human capital measures in the Report Card assess the education and skill levels of a state's population from early childhood through adulthood and the extent to which human capital (in the form of education and skill levels) has been accumulated among different population groups. Measures of human capital accumulation are included in the Report Card because “human capital theory” argues that people can be viewed as an economic asset in which increased investment in health, skills, and knowledge provide future returns for the economy through increases in labor productivity.
Business Capital
The business capital measures in the Report Card gauge the rate at which a state's residents own their own businesses, the extent to which business ownership has been achieved across various population groups, and the level of business wealth accumulated by a state's nontraditional entrepreneurs (especially women and minorities)
Bank Access
The bank access measures in the Report Card gauge the level of participation of a state's residents in the mainstream financial system. These measures are included in the Report Card because research on saving in low-income households finds that the ability to accumulate assets depends on a number of factors, including income and savings incentives, but also access to financial products.
Asset Protection
The asset protection measures in this grouping indicate the extent to which a state's residents, including low-income parents and children, are covered by either private or publicly provided health insurance. These measures are included in the Report Card because health insurance provides protection against the kind of large medical costs that can result in the loss or depletion of household assets.
Asset Policy Index
Financial Asset Building
The financial asset-building policy measures in the Report Card gauge state support for policies that lead directly to the accumulation of financial assets. This includes policies that help to increase pre- and post-tax income so that working families can save, policies to directly incentivize the accumulation of assets, and policies that reduce disincentives to saving.
Affordable Homeownership
Homeownership is the single largest source of equity for American households. Public policies, such as home mortgage interest deduction, have played a pivotal role in incentivizing homeownership at the federal level. A number of state policies have also been implemented to help those with lower incomes become homeowners.
Human Capital Development
The human capital development policy measures state policies that assist in the development of human capital, including policies that focus on low-income families and families living in low-wealth communities.
Small Business Development Policy
The small business development policy measures look at state policies that facilitate business ownership through access to capital for low- and moderate-income entrepreneurs.
Bank Access
The bank access policy measures in the Report Card assess state policies to ensure equal access to basic financial services, such as making deposits and receiving loans. One of the basic factors that determines the ability of low-income households to accumulate assets is access to mainstream financial products and services.
Wage Protection
The wage protection policy measures look at policies that supplement or replace a portion of wages when a worker leaves employment due to job loss, injury, or childbirth. These are crucial supports that allow households to manage work changes or sudden events without depleting assets or increasing debt.
Health Insurance
The health insurance policy measures examine policies that expand or increase health coverage. Health care costs can be some of the largest expenses faced by a household and often occur without warning. In fact, a study found that medical bills and other financial effects of illness contributed to nearly half of the more than one million personal bankruptcy filings in the United States last year.
Property Protection
The property protection policy measures assess state policies that directly protect homeowners against the loss of home equity due to unscrupulous lenders or an inability to acquire homeowners' insurance.
Tax Policy and Accountability Index
Tax Policy and Accountability Index
The tax policy and accountability index evaluates the level of transparency of each state's tax-based subsidies for asset accumulation. Without accessible public information, it is difficult to determine precisely how much a state's tax code provides incentives for wealth accumulation and who benefits from these incentives. Two measures of accountability were evaluated using the same point system as other measures, and a summary assessment based on the evaluation is included for each state; however, states were not ranked or graded because of the low number of measures in this index.
