Understanding the Relationship between Parental Income and Multiple Child Outcomes: a decomposition analysis

Paul Gregg, Carol Propper and Elizabeth Washbrook ()

The Centre for Market and Public Organisation from Department of Economics, University of Bristol, UK

Abstract: In this paper we explore the association between family income and children’s cognitive ability (IQ and school performance), socio-emotional outcomes (self esteem, locus of control and behavioural problems) and physical health (risk of obesity). We develop a decomposition technique that allows us to compare the relative importance of the adverse family characteristics and home environments of low income children in accounting for different outcomes. Using rich cohort data from the UK we find that poor children are disadvantaged at age 7 to 9 across the full spectrum of outcomes, the gradient being strongest for cognitive outcomes and weakest for physical health. We find that some aspects of environment appear to be associated with the full range of outcomes - for example, maternal smoking and breastfeeding, child nutrition, parental psychological functioning. We also find some some aspects of the environment of higher income households hinder child development. We conclude that many aspects of growing up in poverty are harmful to children’s development, and that narrowly-targeted interventions are unlikely to have a significant impact on intergenerational mobility.

Keywords: Child outcomes; income; pathways; mediating factors (search for similar items in EconPapers)
JEL-codes: I12 I31 I32 J13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2008-01
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Persistent link: http://EconPapers.repec.org/RePEc:bri:cmpowp:08/193

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