Does money matter when raising children?

Does money matter when raising children?  First appearances would suggest that the income of the family has a bearing on a child’s development.  A range of studies over the last decade have found that pre-school age children coming from families with limited financial resources tend to be at greater risk of having behavioural and intellectual problems than children from more wealthy backgrounds.  But why is this?  In a recent study using the data from 19,000 families involved in the Millenium Cohort Study, researchers Mara Violato, Stavros Petrou, Ron Gray and Maggie Redshaw set out to try to understand this situation in more depth.  Looking at the situation from both the perspective of an economist and a psychologist, they were interested in understanding whether it was poverty itself that causes the issues or whether it is factors associated with poverty that are the culprits.  In so doing, they hoped to shed light on how best to tackle these issues and whether it was best in channelling money directly to parents or whether it was best to target investment at particular problems.

Violato and her colleagues clustered together factors known to be associated with child development into three areas, parental investment, parental stress and a catch all category entitled ‘Other Related Pathways.’  Parental investment contained factors associated with the family’s investment in the child.  This included physical factors such as the home environment and safety of the neighbourhood as well as more behavioural factors relating to the amount of energy invested in the child.  The factors measured included an assessment of the atmosphere at home, the safety of the neighbourhood, the nature of childcare provided, as well as how often both mothers and fathers read, taught and played with their child.  Parental Stress examined factors associated with the mother’s mental health, measures of parent child interactions and parenting style.  Finally, the ‘Other Related Pathways’ category included factors such as whether the mother smoked through her pregnancy, breast fed her child, the health of both parents and the socio economic status of both grandfathers.

The children’s behavioural and intellectual development were measured three times.  At nine months old, children’s temperament was measured and an assessment of whether there were any developmental delays was made.  At three years old, children’s vocabulary and school readiness were measured along with an assessment of any behavioural difficulties.  And at five years old, children’s vocabulary was tested along with a picture similarity exercise that tested their reasoning ability and a measure of behavioural issues.

Like its predecessors, the study found that children from poorer backgrounds fared worse than their richer peers on measures of both behavioural problems and intellectual development.  However when the factors from the parental investment, parental stress and ‘other related factors’ groups were taken into account, there was a weak or non-existent relationship between parental income and the child’s intellectual and behavioural development.  In other words, it appears that it isn’t poverty itself that causes the problems but the impact of poverty on other factors that is the issue.

As is often the case with these studies, the data used in this study is correlational and therefore it can’t be said with certainty that poverty or any of the other factors are the cause developmental delays  or behavioural problems.  But the study does suggest that it is possible to provide your child with a best possible start even if money is tight.  While factors from all three groups appeared to be linked to a child’s development, it was the level of parental investment that had the strongest association.  It seems that it is less whether parents have money to spend on their children that matters and more how much energy that both parents as well as other family members such as grandparents were able to invest in their child’s development.  Which is not to say that poverty isn’t an issue.  Clearly many of the issues explored in this study are related to poverty and merely having money does not automatically make someone a good parent.  It does at least suggest that there are some factors in the control of parents.

Violato M, Petrou S, Gray R & Redshaw M (2010) Family income and child cognitive behavioural development in the United Kingdom: does money matter?  Health Economics

Special thanks to Mara Violato for her help in accessing this article.

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