Working Paper: NBER ID: w21562
Authors: Randall Akee; Emilia Simeonova; E. Jane Costello; William Copeland
Abstract: Existing research has investigated the effect of early childhood educational interventions on the child’s later-life outcomes. These studies have found limited impact of supplementary programs on children’s cognitive skills, but sustained effects on personality traits. We examine how a positive change in unearned household income affects children’s emotional and behavioral health and personality traits. Our results indicate that there are large beneficial effects of improved household financial wellbeing on children’s emotional and behavioral health and positive personality trait development. Moreover, we find that these effects are most pronounced for children who are lagging behind their peers in these measures before the intervention. Increasing household incomes reduce differences across adolescents with different levels of initial emotional-behavioral symptoms and personality traits. We also examine potential channels through which the increased household income may contribute to these positive changes. Parenting and relationships within the family appear to be an important mechanism. We also find evidence that a sub-sample of the population moves to census tracts with better income levels and educational attainment.
Keywords: household income; child development; personality traits; behavioral health; quasi-experimental analysis
JEL Codes: H24; H3; H31; I14; I3; I38; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased household income (D19) | improvements in children's emotional and behavioral health (I39) |
| increased household income (D19) | development of positive personality traits (I25) |
| increased household income (D19) | reduction in behavioral disorder symptoms (D91) |
| increased household income (D19) | reduction in emotional disorder symptoms (D91) |
| increased household income (D19) | increase in conscientiousness (D91) |
| increased household income (D19) | increase in agreeableness (D64) |
| initial child endowments (J13) | impact on child outcomes (I24) |