Income and the Outcomes of Children

This research paper examines whether various measures of family income are associated with the cognitive, social/emotional, physical and behavioural development of children. Data from the National Longitudinal Survey of Children and Youth were used to assess a range of measures of well-being among children aged 4-15 in 1998, whose family composition remained unchanged between 1994 and 1998. The study finds that regardless of age or how income is measured, higher family income is almost always associated with better child well-being. Among children in lower income families, incremental increases in household income are found to be associated with better child development outcomes. Increases in income continue to remain associated with better well-being, even once children are out of low income. In fact, the study does not find a point above which high income ceases to benefit children's development. In particular, children's cognitive and behavioural development measures appear to have the strongest associations with levels of family income. The results show that changes in family income appear to be less important for child outcomes than levels of family income for 8-11- and 12-15-year-olds. However, for the 4-7-year-old group, changes in family income are more important ' particularly for emotional development scores. Analysis from the Youth in Transition Survey also finds similar relationships between the socio-economic status of the family and the developmental outcomes of children.