Does money affect children's outcomes?

Kerris Cooper and Kitty Stewart

Published 28 October 2013

Children in low-income households do less well than their better-off peers on many outcomes in life, such as education or health, simply because they are poorer. While a parent's level of education, attitude towards bringing up children and other parental factors also have a bearing, research shows that having more money directly improves the development and level of achievement of children. Increases in family income substantially reduce differences in schooling outcomes and improve wider aspects of a child’s well-being. Cognitive development and school achievement were most improved by having more money. Conversely, reductions in family income, including benefit cuts, are likely to have wide-ranging negative effects. Money seems to have more of an effect among low-income families.