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Understanding the relationship between parental income and multiple child outcomes: A decomposition analysis

  • Paul Gregg
  • Carol Propper
  • Elizabeth Washbrook

In this paper we explore the association between family income and children's cognitive ability (IQ and school performance), socio-emotional outcomes (self esteem, locus of control and behavioural problems) and physical health (risk of obesity). We develop a decomposition technique that allows us to compare the relative importance of the adverse family characteristics and home environments of low income children in accounting for different outcomes. Using rich cohort data from the UK we find that poor children are disadvantaged at age 7 to 9 across the full spectrum of outcomes, the gradient being strongest for cognitive outcomes and weakest for physical health. We find that some aspects of environment appear to be associated with the full range of outcomes - for example, maternal smoking and breastfeeding, child nutrition, parental psychological functioning. We also find some some aspects of the environment of higher income households hinder child development. We conclude that many aspects of growing up in poverty are harmful to children's development, and that narrowly-targeted interventions are unlikely to have a significant impact on intergenerational mobility.

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File URL: http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper129.pdf
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Paper provided by Centre for Analysis of Social Exclusion, LSE in its series CASE Papers with number case129.

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Date of creation: Dec 2007
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Handle: RePEc:cep:sticas:case129
Contact details of provider: Web page: http://sticerd.lse.ac.uk/case/_new/publications/default.asp

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  1. Paul Gregg & Stephen Machin, 1998. "Child Development and Success or Failure in the Youth Labour Market," CEP Discussion Papers dp0397, Centre for Economic Performance, LSE.
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  3. 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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  9. Jo Blanden & Paul Gregg & Lindsey Macmillan, 2006. "Accounting for intergenerational income persistence: non-cognitive skills, ability and education," LSE Research Online Documents on Economics 19401, London School of Economics and Political Science, LSE Library.
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  11. Guang Guo & Kathleen Harris, 2000. "The mechanisms mediating the effects of poverty on children’s intellectual development," Demography, Springer, vol. 37(4), pages 431-447, November.
  12. Erik Plug, 2004. "Estimating the Effect of Mother's Schooling on Children's Schooling Using a Sample of Adoptees," American Economic Review, American Economic Association, vol. 94(1), pages 358-368, March.
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  15. Macintyre, Sally & Ellaway, Anne & Cummins, Steven, 2002. "Place effects on health: how can we conceptualise, operationalise and measure them?," Social Science & Medicine, Elsevier, vol. 55(1), pages 125-139, July.
  16. Bruce Sacerdote, 2007. "How Large Are the Effects from Changes in Family Environment? A Study of Korean American Adoptees," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 119-157, 02.
  17. Sandra L. Hofferth & Sally Curtin, 2005. "Poverty, food programs, and childhood obesity," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(4), pages 703-726.
  18. Alison Aughinbaugh & Maury Gittleman, 2003. "Does Money Matter?: A Comparison of the Effect of Income on Child Development in the United States and Great Britain," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
  19. Lisa Gennetian, 2005. "One or two parents? Half or step siblings? The effect of family structure on young children's achievement," Journal of Population Economics, Springer, vol. 18(3), pages 415-436, 09.
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