Early Childhood Poverty and Adult Attainment, Behavior, and Health

Some 4.3 million infants, toddlers and preschoolers lived in poverty in the United States in 2007.  This paper assesses the consequences of low income in childhood, particularly early childhood, for successes and failures later in life? It finds strong links between economic deprivation before age five and lower earnings and fewer work hours 30 years later.

It uses nationally representative data on 1,589 individuals born between 1968 and 1975 from the Panel Study of Income Dynamics (PSID), a 40-year demographic study of U.S. households.  Family income is carefully measured in every year of childhood, as are their education and labor market attainments, crime and health between the ages of 25 and 37. When looking at childhood family income, income early in life (prenatal through 5^th year) is distinguished from income during middle childhood and adolescence. Age distinctions are important, because research shows early childhood to be a crucial time for establishing the brain architecture that shapes children’s future cognitive, social and emotional well-being. The analysis includes a wide range of adult outcomes, including educational attainment, earnings, work hours, receipt of food stamps and cash assistance, nonmarital childbearing, crime, and mental and physical health.

Results show that the timing of economic deprivation during childhood indeed appears to matter. Holding constant parental education, family structure and a host of other demographic conditions at birth, additional income for poor children during the prenatal to age five period is associated with significantly higher adult earnings and work hours and less food stamp receipt.  On the other hand, events such as out-of-wedlock childbearing and arrests appeared to be more sensitive to income in adolescence.

This is the first study to link high-quality income data across the entire childhood period with outcomes in middle adulthood.  It finds that economic conditions in early childhood matter the most for labor market success, a result that corroborates the growing body of intervention evidence linking enriched early childhood environments to long-run successes. Subject to replication, the analysis indicates that policy makers might do well to focus on situations involving deep and persistent poverty early in childhood.  For example, income transfer policies might be designed to provide higher benefits to families with young, rather than older, children.