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Author: Smith, Peter
Resulting in 1 citation.
1. Roberts, Paul
Smith, Peter
Nason, Holly
Children and Familial Economic Welfare: The Effect of Income on Child Development
Working Paper, Applied Research Branch Strategic Policy, Human Resources Development Canada, April 2001.
Also: http://www.rhdsc.gc.ca/en/cs/sp/sdc/pkrf/publications/research/2001-000178/page01.shtml
Cohort(s): Children of the NLSY79
Publisher: Human Resources Development Canada
Keyword(s): Canadian National Longitudinal Survey of Children and Youth (NLSCY); Home Observation for Measurement of Environment (HOME); Overview, Child Assessment Data

Permission to reprint the abstract has not been received from the publisher.

The paper addresses the following questions - How much income fluctuation do children's families experience year to year, and of what magnitude are these fluctuations? What proportion of children spend time in low income situations? How long do children spend living in poverty? What proportion leave or enter low income situations? How important is income in affecting children's outcomes as described by cognitive and behavioural measures? Does income have a different effect on children at different ages or stages of development? What proportions of these income fluctuations are related to labour-market changes and to changes in family structure?

The study answers these questions with data drawn from the share file of the first two cycles (1994-1995 and 1996-1997) of the National Longitudinal Survey of Children and Youth (NLSCY). The researchers use cross-tabular analysis to observe the correlation between families' changing economic circumstances and children's developmental outcomes. Our results show the distribution of household income in each of the two cycles to be generally the same. This equivalence, however, hides broad income shifts that are correlated with changes in family structure and number of earners.

The analysis then proceeds to investigate the independent effect of income on child outcomes employing a typical reduced-form Ordinary Least Squares (OLS) regression model following Blau (1999) and Mayer (1997). The results demonstrate that the effect of income on children's behavioural and cognitive outcomes is for the most part significant, even after the application of controls, but is relatively small. This finding concurs with much of the previous research. Research literature has shown that income may affect children through their home environment. The authors construct a home- environment index, which is a preliminary proxy of the HOME psychometric scale measure used in previous American research. With this index, children from affluent families are shown to tend to have slightly better and more stimulating home environments than children from families with lower income. The study concludes that, with only the two cycles of the NLSCY, one cannot yet determine the exact nature of the income and child-development link. The findings support the notion that the impact of income on children's development is weak to moderate for many of the child outcomes examined. However, the findings also suggest that, through a variety of variables, income does have an impact on children's development.

Bibliography Citation
Roberts, Paul, Peter Smith and Holly Nason. "Children and Familial Economic Welfare: The Effect of Income on Child Development." Working Paper, Applied Research Branch Strategic Policy, Human Resources Development Canada, April 2001.