Family Income Level, Variability, and Trend as Predictors of Child Achievement and Behavior

Recent decades have seen increases in the variability of family income, tepid income growth rates for all but the richest families, and widening income inequality. These trends are concerning for child well-being, given the importance of income to parental investments and parenting practices. Growing evidence suggests that a high level of change is disruptive to family processes and that chronic stress affects physiology as well as psychology. This study used the Panel Study of Income Dynamics Child Development Supplement to estimate associations between three dimensions of childhood income dynamics-level, variability, and trend-and child achievement and behavior. After income level was controlled for, income variability during childhood was not associated with child achievement or behavior, but an increasing five-year trend in income-to-needs was modestly beneficial to behavior measures. Subgroup analysis suggests some adverse effects of income variability and trend on reading and behavior for non-White children but no clear patterns by child's age or family income or wealth levels.

Trends and Divergences in Childhood Income Dynamics, 1970-2010

Earnings and income variability have increased since the 1970s, particularly at the bottom of the income distribution. Considerable evidence suggests that childhood income levels-captured as average or point-in-time yearly income-are associated with numerous child and adult outcomes. The importance to child development of stable proximal processes during childhood suggests that income variability may also be important, particularly if it is unpredictable, unintentional, or does not reflect an upward trend in family income. Using the Panel Study of Income Dynamics, this study documents trends since the 1970s in three dimensions of childhood income dynamics: level, variability, and growth (n=7991). The analysis reveals that income variability during childhood has grown over time, while income growth rates have not. In addition, the economic context of childhood has diverged substantially by socioeconomic status, race, and family structure, with the most disadvantaged children facing a double-whammy of low income and high variability.