Family Income Level, Variability, and Trend as Predictors of Child Achievement and Behavior

Recent decades have seen increases in the variability of family income, tepid income growth rates for all but the richest families, and widening income inequality. These trends are concerning for child well-being, given the importance of income to parental investments and parenting practices. Growing evidence suggests that a high level of change is disruptive to family processes and that chronic stress affects physiology as well as psychology. This study used the Panel Study of Income Dynamics Child Development Supplement to estimate associations between three dimensions of childhood income dynamics—level, variability, and trend—and child achievement and behavior. After income level was controlled for, income variability during childhood was not associated with child achievement or behavior, but an increasing five-year trend in income-to-needs was modestly beneficial to behavior measures. Subgroup analysis suggests some adverse effects of income variability and trend on reading and behavior for non-White children but no clear patterns by child’s age or family income or wealth levels.