Hierarchical linear modeling was used to model the dynamics of family income-to-needs for participants of the National Institute of Child Health and Human Development Study of Early Child Care (N ϭ 1,364) from the time that children were 1 through 36 months of age. Associations between change in income-to-needs and 36-month child outcomes (i.e., school readiness, receptive language, expressive language, positive social be-havior, and behavior problems) were examined. Although change in income-to-needs proved to be of little im-portance for children from nonpoor families, it proved to be of great importance for children from poor fami-lies. For children in poverty, decreases in income-to-needs were associated with worse outcomes and increases were associated with better outcomes. In fact, when children from poor families experienced increases in income-to-needs that were at least 1 SD above the mean change for poor families, they displayed outcomes simi-lar to their nonpoor peers. The practical importance and policy implications of these findings are discussed.
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