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The Importance of Family Income in the Formation and Evolution of Non-Cognitive Skills in Childhood

  • Jason M. Fletcher
  • Barbara Wolfe

There is a well known positive association between family income and children's development, including health and academic performance. This relationship is a potentially importance factor in the intergenerational transmission of socioeconomic status and has been shown to be a robust finding across countries and time periods. In contrast, much less is known about the relationship between family income and other domains of children's development, such as noncognitive (or socio-emotional) skill formation. This is an important gap, as these non-academic skills have been hypothesized to be a critical link between early outcomes and adult socioeconomic status. Indeed, multiple successful interventions targeted to young children seem to primarily improve long-term outcomes by enhancing non-academic skills. This paper presents new evidence of the importance of family income in the formation and evolution of children's non-cognitive skills using a recent panel dataset from the US that tracks children between Kindergarten and 5th grade. Findings suggest an important divergence in noncognitive skills based on family income that accumulates over time and does not seem to be explained by children's health status differences.

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File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP665.pdf
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Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 665.

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Date of creation: Jul 2012
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Handle: RePEc:auu:dpaper:665
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  1. 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.
  2. Fletcher, Jason M., 2012. "The Effects of Personality Traits on Adult Labor Market Outcomes: Evidence from Siblings," IZA Discussion Papers 6391, Institute for the Study of Labor (IZA).
  3. Janet Currie & Mark Stabile, 2003. "Socioeconomic Status and Child Health: Why Is the Relationship Stronger for Older Children?," American Economic Review, American Economic Association, vol. 93(5), pages 1813-1823, December.
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  5. Jason Fletcher & Barbara L. Wolfe, 2012. "Increasing Our Understanding of the Health-Income Gradient in Children," NBER Working Papers 18639, National Bureau of Economic Research, Inc.
  6. Katja Coneus & Johannes Gernandt & Marianne Saam, 2011. "Noncognitive Skills, School Achievements and Educational Dropout," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(4), pages 547-568.
  7. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  8. Simon Condliffe & Charles R. Link, 2008. "The Relationship between Economic Status and Child Health: Evidence from the United States," American Economic Review, American Economic Association, vol. 98(4), pages 1605-18, September.
  9. Khanam, Rasheda & Nghiem, Hong Son & Connelly, Luke B., 2009. "Child health and the income gradient: Evidence from Australia," Journal of Health Economics, Elsevier, vol. 28(4), pages 805-817, July.
  10. Carol Propper & John Rigg & Simon Burgess, 2007. "Child health: evidence on the roles of family income and maternal mental health from a UK birth cohort," Health Economics, John Wiley & Sons, Ltd., vol. 16(11), pages 1245-1269.
  11. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, vol. 91(2), pages 145-149, May.
  12. 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, 02.
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  14. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
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