The effect of financial strain and parental depression on child behavioral difficulties during the Great Recession in Ireland: A fixed effects analysis

Ryan Alberto Gibbons and Richard Layte
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Ryan Alberto Gibbons: Turun Yliopisto (University of Turku)
Richard Layte: Trinity College Dublin

Demographic Research, 2026, vol. 55, issue 3, 73-112

Abstract: Background: Research has long identified class differences in the development of child behavioral difficulties; however, adjudicating between competing subcultural and resource-based explanations has been problematic because of the difficulty in separating mechanisms from pre-existing risk factors. Objective: We use variation in financial strain, experienced by households in Ireland during the Great Recession, to examine whether stable subcultural characteristics or dynamic resources best accounted for differences in child behavioral difficulties. Methods: This paper uses hybrid ‘between–within’ models to disentangle the effects of financial strain from existing class differences in determining child behavioral difficulties, using longitudinal data from Cohort98 of the Growing Up in Ireland study (N = 6,039; 51.2% female; ages 9–17) compiled before, during, and after the Great Recession in Ireland. Results: Analysis indicates that class differences in child behavioral difficulties are largely accounted for after adjusting for mean financial strain and parental depression. Change in financial strain is associated with increased internalized and externalized behavioral difficulties in both boys and girls. Contribution: Our findings militate against a purely subcultural understanding of class differences in child behavioral difficulties, given subcultural values are argued to be independent of changes in resources. By contrast, support is found for a resource-based explanation, with increasing financial strain associated with higher levels of behavioral difficulties.

Keywords: Great Recession; Ireland; Ireland; fixed effects; family stress model; child behavioral difficulties; hybrid models (search for similar items in EconPapers)
JEL-codes: J1 Z0 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:dem:demres:v:55:y:2026:i:3

DOI: 10.4054/DemRes.2026.55.3

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