Poverty is endemic. Among children in the United States, the incidence of poverty is alarming. In 1999, despite an unprecedented period of macroeconomic prosperity, some 13.4 million US children lived in poverty-representing 19.2% of all US children. Poverty rates among American children are one-third higher than they were two decades ago and 1 1/2 to 4 times as high as the rates for children in Canada and Western Europe.
The implications of these disturbing poverty figures for children remain in dispute. Scholars from several social science disciplines have asked many variations of the same broad question: "To what extent does childhood poverty adversely affect cognitive, language, and social development and thereby reduce opportunities for success and happiness in adulthood?"
Lines of Research
Two major lines of research have emerged in the last two decades-one in developmental psychology and another in economics. Both examine the link between family economic resources and children's developmental outcomes or subsequent labor market and educational attainment. Why are economists like me interested in this question?
First, we are interested in the economics of child development because it has implications for the study of the general consequences of poverty on 1) social outcomes and human choice, 2) the role of human capital formation in determining labor market and educational outcomes, 3) the processes related to the transfer from one generation to the next of human capital and wealth, and 4) the investment behavior of parents with respect to their children.
Second, the conclusions from this research can also potentially advise policymakers who craft legislation aimed at aiding poor children. For example, government social policy in the United States that specifically addresses child poverty has taken primarily two forms: governmentsponsored direct-intervention programs (e.g., Head Start) and wealth-transfer programs and tax policy (e.g., Earned Income Tax Credit). Specifically, if research concludes that family economic status (i.e., income and wealth) has a systematic and direct relationship with child developmental outcomes, credibility may be assigned to the latter form of policy. The effectiveness of the former is also a contentious issue.
Link Between Income and Child Development
For the past year, I have been investigating the link between family economic resources and measures of children's cognitive, language, and behavioral development. This work has been a joint effort with Professor Kathleen McCartney and Dr. Eric bearing, both developmental psychologists at Harvard University. Using a new and exciting data set from the National Institute of Child Health and Human Development Study of Early Child Care,
our research has estimated the cross-- sectional impact of differences in economic status on child developmental outcomes. Our work pays careful attention to the potentially disparate effects between poor and non-poor children of differences in economic status on child outcomes. …