Economic Deprivation and Early Childhood Development

Abstract

We consider 3 questions regarding the effects of economic deprivation on child development. First, how are developmental outcomes in childhood affected by poverty and such poverty correlates as single parenthood, ethnicity, and maternal education? Second, what are the developmental consequences of the duration and timing of family economic deprivation? And, third, what is the comparative influence of economic deprivation at the family and neighborhood level? We investigate these issues with longitudinal data from the Infant Health and Development Program. We find that family income and poverty status are powerful correlates of the cognitive development and behavior of children, even after accounting for other differences--in particular family structure and maternal schooling--between low- and high-income families. While the duration of poverty matters, its timing in early childhood does not. Age-5 IQs are found to be higher in neighborhoods with greater concentrations of affluent neighbors, while the prevalence of low-income neighbors appears to increase the incidence of externalizing behavior problems.