Links between parental income and child outcomes

Low-income children are disadvantaged across the full spectrum of later developmental outcomes, a study by Bristol University has found.

The paper explores the relationship between family income and six child developmental outcomes in mid-childhood, spanning cognitive, emotional, behaviour and health domains.

Key points

  • The extent of the income 'gradient' differs across outcomes. The strongest gradients are associated with cognitive outcomes, and the weakest with health outcomes.
  • Some inputs account for part of the explained income gradient across all six child outcomes. For example, parental education accounts for at least a quarter (and in general much more) of the gradients in all six outcomes.
  • It is more common, however, for specific inputs to be strongly associated with a limited number of outcomes. Aspects of low-income children's environments associated with poorer outcomes in one sphere often have no association, or even have an opposing association, with outcomes in other spheres. This variation suggests the underlying mediators of the social gradients in different domains of child development are not the same.
  • A great deal of the social inequality captured by the raw income gradients is associated with the other characteristics of low-income families rather than to just a lack of financial resources. The direct association of income is insignificant for the four non-cognitive and health outcomes. However, these aggregates can disguise certain paths in which financial resources play a substantial role, most notably for the maternal psycho-social characteristics such as anxiety and depression that strongly predict child behaviour problems.
  • Low income may, in some cases, act as a protective factor. For example, lack of financial resources is associated with less exposure to childcare environments linked to problem behaviour, and to housing environments that lower the risk of obesity.

Source: Elizabeth Washbrook, Paul Gregg and Carol Propper, A Decomposition Analysis of the Relationship between Parental Income and Multiple Child Outcomes, Working Paper 13/313, Centre for Market and Public Organisation (University of Bristol)
Note: The paper updates an analysis first published in 2008: Paul Gregg, Carol Propper and Elizabeth Washbrook, Understanding the Relationship Between Parental Income and Multiple Child Outcomes: A Decomposition Analysis, CASEpaper 129, Centre for Analysis of Social Exclusion (London School of Economics)

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