The impact of household wealth and poverty on child development outcomes: Examining asset effects

The primary purpose of this dissertation study is to examine the impact of wealth within households to test whether assets have a measurable effect on children. In particular it focuses on younger children (ages 0–12), considering possible processes that connect household economic status to child outcomes. Because most work in this area has focused on the consequences of poverty for children, a secondary interest to is to compare income poverty and wealth poverty across several domains: cognitive development, physical health, and socio-emotional behavior.; Additional research questions complement the initial hypothesis that children in households with higher levels of wealth will have higher test scores on indices of cognitive development, better physical health, and less problematic socio-emotional behavior, controlling for income and relevant demographic variables. Are developmental outcomes at certain ages more sensitive to particular economic indicators? Are the effects of economic indicators mediated by parenting behavior or other family and community processes? When families with low incomes accumulate assets, are the benefits with respect to child outcomes similar to that of less disadvantaged families?; Secondary data are taken from the Panel Study of Income Dynamics (PSID) using its 1997 Child Development Supplement combined with household income and wealth data. Analyses are conducted using Ordinary Least Squares, logistic and ordered logit regressions in hierarchical blocks.; The overall results show that household wealth is linked to better child outcomes across all three developmental domains. In several cases, the effect of wealth measures on a dependent variable is larger than that of permanent income.{09}In four of the dependent variables, being African American leads to significantly different outcomes. Separate analyses run by race suggest that there are differing gender patterns and that income might be a better predictor for Whites while holding stock or having a bank account is a better predictor for African Americans.; Differences by race and gender do not become statistically significant until children are older (6–9 and 10–12 year old age groups rather than 3–5 year olds). Similarly, wealth seems to be more important for older children. Adding the mediating family and community process variables increases the amount of variance explained in each model. Several mediating variables are statistically significant across all three domains: parental expectations for educational attainment, parental depression and the HOME scale measuring quality of the home environment.