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Does Money Affect Children's Outcomes? An update

It is well-known that children from lower income households tend to have worse outcomes than their better-off peers, however it is often difficult to determine whether these inequalities are due to the effects of low income itself or whether they are explained by other associated factors such as parental education. This is an important question to inform which policy solutions are likely to be effective in narrowing inequalities in childhood and increasing social mobility. This report, funded by the Joseph Rowntree Foundation, reviews the causal evidence on whether or not money itself matters for children’s development. It provides an update with the most recent high quality evidence to the original review published in 2013. Since then the evidence has almost doubled, now including 61 studies from OECD and EU countries. These studies use randomised controlled trials, quasi-experiments and longitudinal data to isolate the effect of income itself. The findings from this report provide further strong evidence that money itself is important for children’s cognitive development, physical health and social and behavioural development. Money is also important for children’s home environment and mothers’ mental health, both of which are significant for child development.

The updated paper is available to download here

The appendices from the paper are available to download (PDF files) separately at the following links:

Appendix Table 2: List of all studies, grouped by ‘case’ or dataset, with overall classification of results. Download here

Appendix 3: Summary tables of studies by outcome

Table A1: Studies examining the effect of income on children’s cognitive and educational outcomes Download here

Table A2: Studies examining the effect of income on children’s social, emotional and behavioural outcomes Download here

Table A3: Studies examining the effect of income on children’s physical health Download here

Table A4: Studies examining the effect of income on intermediate outcomes (potential mechanisms) Download here