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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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  17. Bruce Sacerdote, 2007. "How Large are the Effects from Changes in Family Environment? A Study of Korean American Adoptees," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 119-157.
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