Although research has clearly established that low family income has negative impacts on children's cognitive skills and social -emotional competence, less often is a family's experience of material hardship considered. Using the Early Childhood Longitudinal Study, Kindergarten Class of 1998-1999 (N = 21,255), this study examined dual components of family income and material hardship along with parent mediators of stress, positive parenting, and investment as predictors of 6-year-old children's cognitive skills and social -emotional competence. Support was found for a model that identified unique parent-mediated paths from income to cognitive skills and from income and material hardship to social -emotional competence. The findings have implications for future study of family income and child development and for identification of promising targets for policy intervention.Several decades of research leave little doubt that family income matters for children. With increases in family income, children's cognitive abilities and social -emotional competence improve (for reviews and examples, see: Dahl & Lochner, 2005;Duncan & Brooks-Gunn, 1997;Gershoff, 2003b;Gershoff, Aber, & Raver, 2003;Mayer, 2002;McLoyd, 1998;Seccombe, 2000). While the size of these effects remains subject to debate (Mayer, 1997), there is clear evidence from both natural experiments (Costello, Compton, Keeler, & Angold, 2003) and randomized experiments (Morris & Gennetian, 2003) that increases in family income, particularly among poor families, have positive impacts on children.With such associations established through both longitudinal and cross-sectional studies, researchers have focused on the processes by which family income affects children. Such research posits that family income is unlikely to have direct effects on children; after all, young children have few opportunities or responsibilities to spend money themselves. Instead, it is expected that the effects of family income on children are mediated through its effects on Correspondence concerning this article should be addressed to Elizabeth T. Gershoff, School of Social Work, University of Michigan, 1080 S. University, Ann Arbor, MI 48109. liztg@umich.edu.
NIH Public Access Author ManuscriptChild Dev. Author manuscript; available in PMC 2010 March 10.
Published in final edited form as:Child Dev. 2007 ; 78(1): 70-95. doi:10.1111/j.1467-8624.2007.00986.x.
NIH-PA Author ManuscriptNIH-PA Author Manuscript NIH-PA Author Manuscript parents. The stress of raising a family on a low income is posited to negatively affect parents' mental health and behavior, and, in turn, to negatively affect children.Potential parent mediators of family income effects have included (but are not limited to) parent stress (Linver, Grooks-Gunn, & Kohen, 2002;Mistry, Vandewater, Huston, & McLoyd, 2002;Mistry, Biesanz, Taylor, Burchinal, & Cox, 2004;Yeung, Linver, & Brooks-Gunn, 2002), parent investment of money or time in children (Guo & Harris, 2000;Linver et al., 2002;Yeung et al., 2002), and aspects of...