Centre for Market and Public Organisation

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Centre for Market and Public Organisation
Parental income and child outcomes Paul Gregg,
Carol Propper and Elizabeth Washbrook Avon Local
Group of the Royal Statistical Society
Meeting Bristol, 26th May 2009
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Family income and child outcomes

• Drivers of the developmental deficits of low
  income children are of interest to academics and
  policymakers
• Lifecycle models of human capital formation
  (Cunha and Heckman 2007 Carneiro and Heckman
  2003)
• Labour reforms to tax credits, child care and
  early education, child benefit, maternity leave
  (e.g. Brewer 2007)
• Developmental outcomes in childhood are related
  to multiple aspects of adult well-being and have
  long term social consequences
• Cognitive and educational outcomes IQ, test
  scores, grades
• Non-cognitive and socio-emotional outcomes
  behavior, self-concept, motivation, attention
• Physical health obesity and poor nutrition,
  asthma, injuries, illnesses
• Adult outcomes associated with at least one class
  of child outcome
• Years of schooling, qualifications, employment
  and earnings, mental health, life expectancy and
  morbidity, antisocial and risky behavior, crime,
  fertility

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This paper

• Uses data from an unusually rich birth cohort
  dataset to compare the income gradients in six
  developmental outcomes in mid-childhood
• The income gradient is the unconditional
  association between income and the outcome one
  broad measure of social inequality
• Develops a descriptive decomposition method to
  give an overview of the underlying associations
  that give rise to the observed income gradients
• We estimate the portion of the observed gradients
  predicted by income-related differences in a wide
  range of potential explicators
• Estimates can be interpreted in the light of two
  approaches taken in the literature
• Reduced form OLS studies of the relationship
  between child poverty and outcomes (e.g. Duncan
  and Brooks-Gunn 1997). Precursors to studies on
  the causal effects of income, e.g. Blau 1999
  Dahl and Lockner 2005.
• Correlational SEM studies of the mediators
  between family income and child outcomes (Guo and
  Harris 2000 Yeung et al., 2002)

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The contribution of descriptive estimates

• The associations identified in our estimates are
  not causal. They do not, for example, adjust for
  reverse causation or the influence of
  unobservable third factors such as inherited
  ability
• Causal approaches provide crucial evidence on
  parts of the puzzle of why low income children
  fall behind
• The effect of increasing cash benefits for low
  income families
• The effects specific factors on outcomes
  (intervention programmes, smoking, birth order,
  inherited characteristics)
• But causal studies relying on specific mechanisms
  cannot give an overview of relative importance of
  all the potential factors that drive the
  intergenerational persistence of poverty.
• Single and teen parenthood, low parental
  education, worklessness and deprived
  neighborhoods control variables
• Parental stress and depression, social
  connections, child care experiences, unhealthy
  environments, parenting behaviors - mediators

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Contribution of our paper

• What are the upper bounds on the effects of
  interventions targeted to specific factors in
  terms of reducing social inequality in child
  well-being?
• Conclusions depend on whether we focus on a
  single or multiple classes of outcomes.
• Some factors are associated with all three types
  of outcome. Examples are breast feeding and child
  nutrition, discipline and maternal locus of
  control.
• Some factors are strongly associated with some
  outcomes but not others. Maternal social networks
  and parental smoking explain the non-cognitive
  and health gradients but not the cognitive.
• Some factors have opposing associations with
  certain aspects of development. Lack of car
  ownership and poor housing are associated with
  lower risk of obesity lower attendance at
  center-based child care is associated with fewer
  behavioral problems

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Data The ALSPAC cohort

• 9476 children born in Bristol and the surrounding
  regions (Avon) in 1991/2
• Population 1 million, mixture of rural, suburban
  and urban, broadly nationally representative
• Census of pregnant mothers rather than random
  sample, very high frequency
• Mother-completed postal questionnaires
• Teacher-completed postal questionnaires
• Hands-on assessments in clinics at ages 7, 8 and
  9
• Matched to Key Stage national school test
  results from the National Pupil Database

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Outcome measures
Cognitive IQ at age 8. WISC-III UK. Academic
achievement at age 7. Key Stage 1 national school
tests (KS1). Reading, writing and
mathematics. Non-cognitive Locus of control at
age 8. Child completed. Short form of
Nowicki-Strickland Internal-External scale for
children. Self esteem at age 8. Child completed.
Short form of Harters Self Perception Profile
for Children. Behavioral problems at age 7.
Teacher rated. Strengths and Difficulties
Questionnaire. Hyperactivity, peer relations,
conduct problems, emotional problems. Health Fat
mass at age 9. Total body dual energy X-ray
absorptiometry (DXA scans).
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The income gradient
Oij dYi eij eij - Yi
Oij is the jth outcome of the ith child Yi is the
log of average disposable equivalised household
income at child age 3 and 4 in 1995 prices eij is
an orthogonal error term All outcomes
standardised to mean 100, SD 10. In presentation,
the signs of the coefficients are adjusted, such
that positive coefficients represent more
beneficial outcomes in all cases.
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Income gradients in outcomes in middle childhood
108
106
104
102
IQ (5.85)
KS1 (5.46)
100
Locus of control (3.30)
Score (mean 100, SD 10)
98
Self esteem (1.71)
96
Behavior (2.01)
94
Fat mass (1.34)
92
90
88
30
80
130
180
230
280
330
380
430
480
530
580
630
p lt 0.01 for all gradients
Equivalised disposable weekly
household income age 3/4 (1995 GBP)
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Control variables
Household demographics Single parenthood,
siblings, mothers age Labor market status
Mothers and partners employment and
occupational class Education Mothers, partners
and maternal grandparents qualifications Neighbor
hood Local deprivation (IMD for ward at birth),
social housing
Mediating variables
Maternal psychosocial functioning
Anxiety/depression, weighted life events,
financial difficulties, parental relationship,
frequency of smacking, social networks, locus of
control Preschool childcare Type and intensity,
between birth and age 3, between age 3 and school
entry Health health behaviours Birth weight
and gestation, parental smoking, breastfeeding,
diet at age 3 Home learning environment Books
and toys, maternal teaching, educational outings,
mothers and partners reading and singing with
child Physical home environment Car ownership,
garden, noise, crowding, damp/mould School
quality and mix Fixed effects
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Decomposing the income gradient
Oij dYi eij eij - Yi
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Modelling framework
pj
Income (Y)
?
Mediators (M) e.g. home learning environment, diet
a
Child Outcome j (Oj)
?j
Controls (C) e.g. parental education, family
structure
ß
?j
(1) Oij ?jMi ?jCi pjYi µij µij - Mi, Ci,
Yi
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Modelling framework
pj
Income (Y)
?
Mediators (M) e.g. home learning environment, diet
a
Child Outcome j (Oj)
?j
Controls (C) e.g. parental education, family
structure
ß
?j
(2) Mi ßCi ?Yi ?i ?i - Ci, Yi
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Modelling framework
pj
Income (Y)
?
Mediators (M) e.g. home learning environment, diet
a
Child Outcome j (Oj)
?j
Controls (C) e.g. parental education, family
structure
ß
?j
(3) Ci aYi ?i ?i - Yi
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Modelling framework
pj
Income (Y)
?
Mediators (M) e.g. home learning environment, diet
a
Child Outcome j (Oj)
?j
Controls (C) e.g. parental education, family
structure
ß
?j
(4) Oij (?jßa ?j? ?ja pj) Yi
error djYi eij
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Modelling framework
dj ?jßa ?j? ?ja pj The unconditional
income gradient can be written as the sum of a
set of path coefficients. Each path coefficient
is the product of the partial effects of one
variable on another. If any link in the chain is
zero, the path coefficient will be zero. Path
coefficients calculated by multiplying and
summing the OLS coefficients from the underlying
regressions. Standard errors estimated by
bootstrapping with 200 repetitions. Path
coefficients can be combined in different ways to
give alternative decompositions of the income
gradient.
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Income gradient decompositions - summary
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Income gradient decompositions - summary
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Income gradient decompositions - summary
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Income gradient decompositions - summary
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Income gradient decompositions disaggregated
mediators
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Income gradient decompositions disaggregated
mediators
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Income gradient decompositions disaggregated
mediators
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Income gradient decompositions mediators of
income and controls
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Income gradient decompositions mediators of
income and controls
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Income gradient decompositions mediators of
income and controls
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Conclusions

• Our accounting exercise produces a number of
  findings in line with previous research
• Income gradients are steeper for cognitive
  outcomes than for non-cognitive or health
  outcomes
• The estimated effect of income drops steeply when
  other forms of socio-economic disadvantage are
  controlled
• Mediators between income and outcomes are many
  and diffuse
• Less cognitive stimulation in the home helps to
  account for the cognitive deficits of low income
  children poorer maternal psychosocial
  functioning helps to account for their behavioral
  deficits

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Conclusions

• Our comparative approach provides new insights
  that may be missed in more narrowly-focused
  studies
• Maternal psychosocial functioning and
  health-related behaviors appear as important as
  the home learning environment in accounting for
  the cognitive deficits of low income children
• Some factors have a modest role to play in
  explaining multiple gradients (e.g. breast
  feeding, discipline)
• A focus only on cognitive outcomes may miss the
  adverse consequences of certain factors for other
  dimensions of development (e.g. smoking, social
  networks)
• Not everything that high income parents do is
  necessarily good for their children. Behaviors
  that promote cognitive development
  (learning-focused environments) could have
  adverse consequences for physical health