Family Income Trajectories and Early Childhood Development

Background/Purpose:While the detrimental effects of early childhood poverty are well documented, less is known about the unique patterns of family income changes over time and their effects. Evidence suggests that income fluctuates, particularly for low-income families that may experience fits and spurts of moderate income between poverty spells. Though early income fluctuation trends are not fully understood, research suggests that as many as 40% of children fall below the poverty threshold at some point prior to kindergarten entry and this simple measure of poverty exposure is significantly associated with math and reading outcomes.

To uncover how early income patterns are associated with a collection of academic and behavioral outcomes, the present study applied two theories: a timing/sensitive period model and accumulation/cumulative risk framework. The present study addressed limitations of past research by applying these relevant theoretical frameworks to study income instability using a nationally representative, longitudinal dataset. It concentrates on the critical period of early childhood, focuses on the subpopulation of families in the low- to moderate-income rage, and examines multiple domains of school readiness outcomes as a function of prolonged or abbreviated duration of poverty or chronicity of poverty as experienced by families. The purpose of the present study was to (a) empirically classify family income trajectories using income-to-needs ratios during early childhood and (b) evaluate associations between derived income trajectories and kindergarten outcomes.

Methods:The ECLS-B is a nationally representative study of approximately 10,700 children born in 2001 and followed through kindergarten. ECLS-B data were collected through parent and teacher reports, birth certificate records, home visits, classroom observations, and direct child assessments across 4 waves when children were approximately 9 months, 2 years, 4.5 years (preschool), and 5.5 years (kindergarten). Our analyses included 4,200 families that were consistently classified as low-to-moderate income families across all four waves (i.e., less than 400% FPL).

Household income-to-needs ratios were generated using parent-reported data at all 4 waves.School readiness in kindergarten was measured by standardized assessments of mathematics and reading and teacher reports of interpersonal skills, externalizing behaviors, approaches to learning, and perspective taking.

Family income trajectories were classified using latent class growth analysis, and multiple regression was used to investigate the unique relationships between income trajectory classes and kindergarten outcomes.

Results:Findings revealed four distinct latent income trajectories. 22% of children were classified as Stable High, 8.5% experienced upward growth and were classified as Low to Adequate, 67% were classified as stable low, and 2.5% experienced decreasing income-to-needs over time and were classified as Adequate to Low. Maternal education, marital status, and work status discriminated income trajectory class membership, net of all other covariates. Children in stable low income trajectories demonstrated poorer school readiness outcomes than children in more advantaged trajectories.

Conclusions and Implications:When children and families are poor, expanding programs and policies such as EITC, Child Tax Credit, and minimum wage may be useful in improving child school readiness outcomes. Alternatively, antipoverty policies looking to augment family income by distributing unconditional cash transfers may merit attention.