The Association of Parenting Quality with Children's Economic Achievement in Early Adulthood

Background/Purpose: Human capital investment during early childhood is a critical factor for the developing child in shaping their cognitive and emotional development in potent ways, as well as impacting later outcomes when they reach adulthood. Since children are totally dependent individuals, their economic and psychosocial wellbeing in early childhood and later life is predominantly determined by assistance from their parents: family background and parental socioeconomic resources, and in particular, parenting quality as social capital.

Prior research has demonstrated strong associations between parental economic resources or poverty and their children’s outcomes upon adulthood including income, education, working hours, physical and mental health, and the other attitudinal outcomes. However, little is known about the role of the quality of parenting in enhancing or reducing the magnitude of the relation between parental economic resources and their child’s outcomes. In addition, there is even less examination of parenting quality as a key factor that may have an impact, not only on children’s cognitive and psychosocial development in early childhood, but on longer term economic outcome in young adulthood. Thus, the purpose of this study is to examine the relationship between parenting quality and children’s economic outcome when they are grown up, controlling for parental socioeconomic status and other relevant factors.

Methods: Data used was a merged data between Childhood Retrospective Circumstances Study (CRCS) as a supplement to the Panel Study of Income Dynamics (PSID) and the PSID family file as of 2013. Among the total 8,072 adults in CRCS, those aged 25-37 were selected in order to restrict the analytic sample to the period of early adulthood (N=2,201). Parenting quality in childhood was measured by parental affection and discipline, which was based on questionnaires from the National Survey of Midlife Development in the United States. Multivariate regression analysis was conducted to test the significance of the relationship between parenting quality and children’s economic outcome when they are grown up, controlling for other related covariates, such as parental socioeconomic status, parental education level, gender, and race.

Results: Results showed that there was a significant relationship between parenting quality and children’s economic outcome in early adulthood. First, parental affection was positively associated with adult children’s economic resources (b=2,751.54, p <.01), indicating that one unit increase in parental affection during childhood would increase the economic resources in early adulthood by $2,752 per year, controlling for other covariates. Second, parental discipline was insignificantly but negatively associated with adult children’s economic resources (b=-76.73, p =.94).

Conclusions/Implications: A key contribution of this study is to provide empirical evidence on the importance of parenting quality as a key factor in determining the economic capacity for children upon adulthood. This finding indicates that parenting quality, specifically parental affection plays a critical role in promoting children’s outcomes upon adulthood. This study also has important implication for social welfare practice and policy: social workers need to continue to design and implement high quality parenting programs to enhance parental affection for U.S. children’s better outcomes in their later lives.