IDEAS home Printed from https://ideas.repec.org/a/spr/chinre/v14y2021i3d10.1007_s12187-020-09782-0.html
   My bibliography  Save this article

Does Household Income Affect children’s Outcomes? A Systematic Review of the Evidence

Author

Listed:
  • Kerris Cooper

    (London School of Economics and Political Science)

  • Kitty Stewart

    (London School of Economics and Political Science)

Abstract

There is abundant evidence that children in low income households do less well than their peers on a range of developmental outcomes. However, there is continuing uncertainty about how far money itself matters, and how far associations simply reflect other, unobserved, differences between richer and poorer families. The authors conducted a systematic review of studies using methods that lend themselves to causal interpretation. To be included, studies had to use Randomised Controlled Trials, quasi-experiments or fixed effect-style techniques on longitudinal data. The results lend strong support to the hypothesis that household income has a positive causal effect on children’s outcomes, including their cognitive and social-behavioural development and their health, particularly in households with low income to begin with. There is also clear evidence of a positive causal effect of income on ‘intermediate outcomes’ that are important for children’s development, including maternal mental health, parenting and the home environment. The review also makes a methodological contribution, identifying that effects tend to be larger in experimental and quasi-experimental studies than in fixed effect approaches. This finding has implications for our ability to generalise from observational studies.

Suggested Citation

  • Kerris Cooper & Kitty Stewart, 2021. "Does Household Income Affect children’s Outcomes? A Systematic Review of the Evidence," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 14(3), pages 981-1005, June.
  • Handle: RePEc:spr:chinre:v:14:y:2021:i:3:d:10.1007_s12187-020-09782-0
    DOI: 10.1007/s12187-020-09782-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12187-020-09782-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s12187-020-09782-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gordon B. Dahl & Lance Lochner, 2012. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," American Economic Review, American Economic Association, vol. 102(5), pages 1927-1956, August.
    2. Jo Blanden, 2004. "Family Income and Educational Attainment: A Review of Approaches and Evidence for Britain," Oxford Review of Economic Policy, Oxford University Press, vol. 20(2), pages 245-263, Summer.
    3. Sandra E. Black & Paul J. Devereux & Katrine V. L�ken & Kjell G. Salvanes, 2014. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 824-837, December.
    4. Laura Blow & Ian Walker & Yu Zhu, 2012. "Who Benefits From Child Benefit?," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 153-170, January.
    5. David Cesarini & Erik Lindqvist & Robert Östling & Björn Wallace, 2016. "Wealth, Health, and Child Development: Evidence from Administrative Data on Swedish Lottery Players," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 687-738.
    6. Hilary Hoynes & Doug Miller & David Simon, 2015. "Income, the Earned Income Tax Credit, and Infant Health," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 172-211, February.
    7. Y. F. Chia, 2013. "Dollars and pounds: the impact of family income on childhood weight," Applied Economics, Taylor & Francis Journals, vol. 45(14), pages 1931-1941, May.
    8. Katrine V. Løken & Magne Mogstad & Matthew Wiswall, 2012. "What Linear Estimators Miss: The Effects of Family Income on Child Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 1-35, April.
    9. Tramonte, Lucia & Willms, J. Douglas, 2010. "Cultural capital and its effects on education outcomes," Economics of Education Review, Elsevier, vol. 29(2), pages 200-213, April.
    10. Martin Dooley & Jennifer Stewart, 2007. "Family income, parenting styles and child behavioural–emotional outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 16(2), pages 145-162, February.
    11. Randall K. Q. Akee & William E. Copeland & Gordon Keeler & Adrian Angold & E. Jane Costello, 2010. "Parents' Incomes and Children's Outcomes: A Quasi-experiment Using Transfer Payments from Casino Profits," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 86-115, January.
    12. Christian Raschke, 2016. "The Impact of the German Child Benefit on Household Expenditures and Consumption," German Economic Review, Verein für Socialpolitik, vol. 17(4), pages 438-477, November.
    13. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769, April.
    14. Mocan, Naci & Raschke, Christian & Unel, Bulent, 2015. "The impact of mothers’ earnings on health inputs and infant health," Economics & Human Biology, Elsevier, vol. 19(C), pages 204-223.
    15. William N. Evans & Craig L. Garthwaite, 2014. "Giving Mom a Break: The Impact of Higher EITC Payments on Maternal Health," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 258-290, May.
    16. Violato, Mara & Petrou, Stavros & Gray, Ron, 2009. "The relationship between household income and childhood respiratory health in the United Kingdom," Social Science & Medicine, Elsevier, vol. 69(6), pages 955-963, September.
    17. Elizabeth Washbrook & Paul Gregg & Carol Propper, 2014. "A decomposition analysis of the relationship between parental income and multiple child outcomes," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 177(4), pages 757-782, October.
    18. Fitzsimons, Emla & Goodman, Alissa & Kelly, Elaine & Smith, James P., 2017. "Poverty dynamics and parental mental health: Determinants of childhood mental health in the UK," Social Science & Medicine, Elsevier, vol. 175(C), pages 43-51.
    19. Kevin Milligan & Mark Stabile, 2011. "Do Child Tax Benefits Affect the Well-Being of Children? Evidence from Canadian Child Benefit Expansions," American Economic Journal: Economic Policy, American Economic Association, vol. 3(3), pages 175-205, August.
    20. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
    21. Mara Violato & Stavros Petrou & Ron Gray & Maggie Redshaw, 2011. "Family income and child cognitive and behavioural development in the United Kingdom: does money matter?," Health Economics, John Wiley & Sons, Ltd., vol. 20(10), pages 1201-1225, October.
    22. James Manley & Lia Fernald & Paul Gertler, 2015. "Wealthy, healthy and wise: does money compensate for being born into difficult conditions?," Applied Economics Letters, Taylor & Francis Journals, vol. 22(2), pages 121-126, January.
    23. Rasheda Khanam & Son Nghiem, 2016. "Family Income and Child Cognitive and Noncognitive Development in Australia: Does Money Matter?," Demography, Springer;Population Association of America (PAA), vol. 53(3), pages 597-621, June.
    24. Gregg, Paul & Waldfogel, Jane & Washbrook, Elizabeth, 2006. "Family expenditures post-welfare reform in the UK: Are low-income families starting to catch up?," Labour Economics, Elsevier, vol. 13(6), pages 721-746, December.
    25. Cowan Benjamin & Tefft Nathan, 2012. "Education, Maternal Smoking, and the Earned Income Tax Credit," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-39, October.
    26. Raschke, Christian, 2012. "The Impact of the German Child Benefit on Child Well-Being," IZA Discussion Papers 6980, Institute of Labor Economics (IZA).
    27. Susan Averett & Yang Wang, 2013. "The Effects Of Earned Income Tax Credit Payment Expansion On Maternal Smoking," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1344-1359, November.
    28. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2016. "The earned income tax credit, mental health, and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 18-38.
    29. Komro, K.A. & Livingston, M.D. & Markowitz, S. & Wagenaar, A.C., 2016. "The effect of an increased minimum wage on infant mortality and birth weight," American Journal of Public Health, American Public Health Association, vol. 106(8), pages 1514-1516.
    30. Johnson Rucker C & Schoeni Robert F, 2011. "The Influence of Early-Life Events on Human Capital, Health Status, and Labor Market Outcomes Over the Life Course," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(3), pages 1-57, September.
    31. Kerris Cooper & Kitty Stewart, 2013. "Does money affect children’s outcomes?," CASE Reports casereport80, Centre for Analysis of Social Exclusion, LSE.
    32. Kuehnle, Daniel, 2014. "The causal effect of family income on child health in the UK," Journal of Health Economics, Elsevier, vol. 36(C), pages 137-150.
    33. Dearing, E. & Taylor, B.A. & McCartney, K., 2004. "Implications of family income dynamics for women's depressive symptoms during the first 3 years after childbirth," American Journal of Public Health, American Public Health Association, vol. 94(8), pages 1372-1377.
    34. Wankyo Chung & Hyungserk Ha & Beomsoo Kim, 2016. "Money Transfer And Birth Weight: Evidence From The Alaska Permanent Fund Dividend," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 576-590, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Libertad González Luna & Sofia Trommlerová, 2021. "Prenatal transfers and infant health: Evidence from Spain," Economics Working Papers 1783, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Libertad González & Sofia Trommlerová, 2021. "Prenatal Transfers and Infant Health: Evidence from Spain," Working Papers 1261, Barcelona Graduate School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cooper, Kerris & Stewart, Kitty, 2020. "Does household income affect children’s outcomes? A systematic review of the evidence," LSE Research Online Documents on Economics 107029, London School of Economics and Political Science, LSE Library.
    2. Kerris Cooper & Kitty Stewart, 2017. "Does Money Affect Children's Outcomes? An update," CASE Papers /203, Centre for Analysis of Social Exclusion, LSE.
    3. Cooper, Kerris & Stewart, Kitty, 2017. "Does Money Affect Children’s Outcomes? An update," LSE Research Online Documents on Economics 103494, London School of Economics and Political Science, LSE Library.
    4. Mari, Gabriele & Keizer, Renske, 2020. "Families of Austerity: Welfare Cuts and Family Stress in Britain," SocArXiv vdej8, Center for Open Science.
    5. Otto Lenhart, 2019. "The effects of income on health: new evidence from the Earned Income Tax Credit," Review of Economics of the Household, Springer, vol. 17(2), pages 377-410, June.
    6. George Bulman & Robert Fairlie & Sarena Goodman & Adam Isen, 2016. "Parental Resources and College Attendance: Evidence from Lottery Wins," NBER Working Papers 22679, National Bureau of Economic Research, Inc.
    7. Andrew E. Clark & Conchita D'Ambrosio & Marta Barazzetta, 2021. "Childhood circumstances and young adulthood outcomes: The role of mothers' financial problems," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 342-357, February.
    8. Markowitz, Sara & Komro, Kelli A. & Livingston, Melvin D. & Lenhart, Otto & Wagenaar, Alexander C., 2017. "Effects of state-level Earned Income Tax Credit laws in the U.S. on maternal health behaviors and infant health outcomes," Social Science & Medicine, Elsevier, vol. 194(C), pages 67-75.
    9. Naoi, Michio & Akabayashi, Hideo & Nakamura, Ryosuke & Nozaki, Kayo & Sano, Shinpei & Senoh, Wataru & Shikishima, Chizuru, 2021. "Causal effects of family income on educational investment and child outcomes: Evidence from a policy reform in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).
    10. Clark, Andrew E. & D’Ambrosio, Conchita & Barrazzetta, Marta, 2019. "Childhood circumstances and young adult outcomes: the role of mothers' financial problems," LSE Research Online Documents on Economics 102630, London School of Economics and Political Science, LSE Library.
    11. Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2018. "Safety Nets Investments in Children," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 89-150.
    12. Sarah E. Johnson & David Lawrence & Francisco Perales & Janeen Baxter & Stephen R. Zubrick, 2019. "Poverty, Parental Mental Health and Child/Adolescent Mental Disorders: Findings from a National Australian Survey," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 12(3), pages 963-988, June.
    13. George L. Wehby & Dhaval M. Dave & Robert Kaestner, 2020. "Effects of the Minimum Wage on Infant Health," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 411-443, March.
    14. Patralekha Ukil, 2019. "Parental Economic Shocks and Infant Health: The Effect of Import Competition in the U.S," Working papers 2019-18, University of Connecticut, Department of Economics.
    15. Otto Lenhart, 2021. "Earned income tax credit and crime," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 589-607, July.
    16. Braga, Breno & Blavin, Fredric & Gangopadhyaya, Anuj, 2020. "The long-term effects of childhood exposure to the earned income tax credit on health outcomes," Journal of Public Economics, Elsevier, vol. 190(C).
    17. Felfe, Christina & Deuchert. Eva, 2011. "The tempest: Using a natural disaster to evaluate the link between wealth and child development," Economics Working Paper Series 1146, University of St. Gallen, School of Economics and Political Science.
    18. Emilia Del Bono & Marco Francesconi & Yvonne Kelly & Amanda Sacker, 2016. "Early Maternal Time Investment and Early Child Outcomes," Economic Journal, Royal Economic Society, vol. 126(596), pages 96-135, October.
    19. Douglas Almond & Janet Currie & Valentina Duque, 2018. "Childhood Circumstances and Adult Outcomes: Act II," Journal of Economic Literature, American Economic Association, vol. 56(4), pages 1360-1446, December.
    20. Lauren E. Jones & Kevin Milligan & Mark Stabile, 2019. "Child cash benefits and family expenditures: Evidence from the National Child Benefit," Canadian Journal of Economics, Canadian Economics Association, vol. 52(4), pages 1433-1463, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:chinre:v:14:y:2021:i:3:d:10.1007_s12187-020-09782-0. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.