Academic journal article The Future of Children

Boosting Family Income to Promote Child Development

Academic journal article The Future of Children

Boosting Family Income to Promote Child Development

Article excerpt


Families who live in poverty face disadvantages that can hinder their children's development in many ways, write Greg Duncan, Katherine Magnuson, and Elizabeth Votruba-Drzal. As they struggle to get by economically, and as they cope with substandard housing, unsafe neighborhoods, and inadequate schools, poor families experience more stress in their daily lives than more affluent families do, with a host of psychological and developmental consequences. Poor families also lack the resources to invest in things like high-quality child care and enriched learning experiences that give more affluent children a leg up. Often, poor parents also lack the time that wealthier parents have to invest in their children, because poor parents are more likely to be raising children alone or to work nonstandard hours and have inflexible work schedules.

Can increasing poor parents' incomes, independent of any other sort of assistance, help their children succeed in school and in life? The theoretical case is strong, and Duncan, Magnuson, and Votruba-Drzal find solid evidence that the answer is yes--children from poor families that see a boost in income do better in school and complete more years of schooling, for example. But if boosting poor parents' incomes can help their children, a crucial question remains: Does it matter when in a child's life the additional income appears? Developmental neurobiology strongly suggests that increased income should have the greatest effect during children's early years, when their brains and other systems are developing rapidly, though we need more evidence to prove this conclusively.

The authors offer examples of how policy makers could incorporate the findings they present to create more effective programs for families living in poverty. And they conclude with a warning: if a boost in income can help poor children, then a drop in income--for example, through cuts to social safety net programs like food stamps--can surely harm them.

Using a poverty line of about $23,000 for a family of four, the U.S. Census Bureau counted more than 16 million U.S. children--more than one in five--living in poor families in 2012.1 Poor children begin school well behind their more affluent peers and may lose even more ground during the school years. On average, poor U.S. children have lower levels of kindergarten reading and math skills than their more fortunate peers (figure 1). Moreover, when compared with people whose families had incomes of at least twice the poverty line during their early childhood, adults who were poor as children completed two fewer years of schooling and, by the time they reached their 30s, earned less than half as much, worked far fewer hours per year, received more in food stamps, and were nearly three times as likely to report poor overall health (table 1). (2) Poor boys were more than twice as likely to be arrested later in life, and poor girls were five times as likely to bear a child out of wedlock before age 21.

Poverty is associated with a cluster of disadvantages that may be harmful to children, including low levels of parental education and living with a single parent. To determine whether children would be helped by a policy that is designed to increase family incomes and nothing else, we focus on distinguishing the effects of family income from those of other sources of disadvantage. In policy terms, this approach lets us answer the following question: To what extent would children's development be affected by policies that give low-income parents more income, but do not directly target other characteristics of parents or family environments? In other words, would increasing family income through policies such as the Earned Income Tax Credit, food stamps, or the Child Tax Credit lead to better child outcomes? If the benefits are larger than the costs, income-support programs for parents might constitute a wise two-generation investment. …

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