Assets & Debts and Child Development: Main Effects and Developmental Differences

• In Event: Beyond Income: Economic Contexts and Children's Development

Abstract

Recent years have witnessed rising inequality in the economic circumstances of families in the U.S., especially in terms of growing disparities in family wealth (Gibson-Davis & Hill, 2021; Gibson-Davis & Percheski, 2018; Pfeffer & Schoeni, 2016; Wolff, 2017; Yellen, 2016). Wealth inequality is rising more rapidly in households with children compared to childless households. Therefore, it is important to consider the implications of wealth inequality for children’s development and the intergenerational transmission of socioeconomic disadvantage (Gibson-Davis & Percheski, 2018).
A growing interdisciplinary literature has documented the importance of wealth, calculated as assets minus debts, in shaping academic and, to a lesser extent, behavioral development (Diemer et al., 2020; Elliott et al., 2011; Miller et al., 2020; Ream & Gottfried, 2019; Shanks, 2007; Yeung & Conley, 2008). Still, important questions remain unaddressed that require further investigation. First, few studies have considered whether the key components of wealth, namely assets and debts, exert unique influences on child development. Second, little attention has been given to differences in these associations across early childhood, middle childhood, and adolescence despite extant research showing that other economic resources, e.g. family income, have varying effects on development depending on child age.

The current study aims to address these two limitations using data from the National Longitudinal Survey of Youth and its Child Supplement (NLSY; NSLY-CS) by addressing two fundamental questions. First, how do assets and debts uniquely relate to academic and behavioral development of children and adolescents, controlling for other aspects of economic circumstances (i.e., family income and income volatility)? Second, do relations between assets and debts and children’s achievement and behavior differ across early childhood (age 5/6), middle childhood (age 9/10), and adolescence (age 13/14)?
Our sample includes data from children followed by the NLSY from age 5/6 until age 13/14. Externalizing and internalizing behavior problems scores were derived from the Behavior Problem Index (BPI; Peterson & Zill, 1986), which is used to measure frequency, range, and types of behavior problems among children aged 4-17. Peabody Individual Achievement Tests (PIAT) were used to measure academic achievement. Mixed effects regression models predicting behavior and achievement with family assets and debts were estimated with random effects to adjust for the clustering of observations within individual. Next, we tested interactions between developmental stage and both assets and debts to test for differences in links between wealth and development across early childhood, middle childhood, and adolescence.
Preliminary results revealed that higher assets related to lower internalizing (coeff.= -.03, p=.000) and externalizing problems (coeff.= -.05, p=.000) and higher math (coeff.= .02, p=.000) and reading achievement (coeff.= .02, p=.000) for children across childhood (Table 1). Greater debt predicted more internalizing (coeff.=.01, p=.003) and externalizing behaviors (coeff.= .02, p=.000). Contrary to expectations, debt was positively related to achievement (coeff.= .02, p=.000 for both math and reading). Interactions probing developmental differences showed growing links between assets and debts and reading and math achievement as children aged from early childhood to adolescence (Table 2). Associations between wealth and problem behaviors were consistent across development.
 

Authors

• Tamara Podvysotska, University of Pittsburgh
  Presenting Author

• Portia Miller, University of Pittsburgh

• Jamie L Hanson, University of Pittsburgh

• Elizabeth Votruba-Drzal, University of Pittsburgh