Does Money Affect Children’s Outcomes? An update

Abstract

This report provides an update to Does Money Affect Children’s Outcomes?: A Systematic Review, published in October 2013. Using systematic search approaches, we review the literature examining the relationship between household financial resources and children’s outcomes, focusing on OECD countries and on the last fifty years. We include studies looking at children’s health, cognitive development and social, emotional and behavioural development, as well as studies on relevant intermediate outcomes, including the home environment and maternal mental health and health behaviours. Studies are only included if they use methods that allow us to reach conclusions about causal relationships: this includes randomised controlled experiments, quasi-experimental situations, and longitudinal studies tracking both financial resources and outcomes over time. The update adds 27 new studies to the 34 in the original review, and slightly expands the country coverage, although the evidence base remains heavily US-focused. The studies provide strong evidence that income has causal effects on a wide range of children’s outcomes, especially in households on low incomes to begin with. We conclude that reducing income poverty can be expected to have a significant impact on children’s environment and on their development