| Nina Chisan Chien
University of California, Los Angeles
Context matters: The effects of cost of living and family income on children's well-being
FINAL REPORT:
The positive relationship between income and child outcomes is well-established (e.g., McLoyd, 1998). But despite dramatic variations in cost of living across the United States, the relationship between cost of living and children’Äôs development remains unexamined. This dissertation examined the combined effects of geographical differences in cost of living and family income on children’Äôs academic achievement and social competence in first grade. I also examined whether parent investment (e.g., extracurricular activities, access to a home computer), parent socialization (i.e., parent stress and parenting practices), and school quality (e.g., aggregate school achievement) explained these relationships. Data came from the Early Childhood Longitudinal Study-Kindergarten Cohort (ECLS-K) dataset (N = 17,565). Analyses were conducted using latent variables within a structural equation modeling framework.
Part I results (full-sample analysis) showed that a higher cost of living was related to lower levels of academic achievement and lower parent report of social competence; there was no evidence of mediation. Higher family income was related to higher academic achievement and higher teacher and parent reports of social competence, and these relationships were mediated by the parent investment, parent socialization, and school quality mediators.
Part II results (multi-group analysis) revealed differences in the strength of relationships across poor (income-to-needs < 1), low-income (1 ’⧠income-to-needs < 3), and adequate-income (income-to-needs ’â* 3) families. Higher cost of living was related to lower academic achievement for poor and low-income children, but the effect was stronger for poor children. For poor children, the effect of cost of living on academic achievement was primarily mediated through parent investments and school quality.
Supplementary analysis revealed only a few differences in the strength of relationships across White, African-American, and Latino children. Higher cost of living had adverse effects on academic achievement for White and Latino children, but not for African American children. For the relationship between income and academic achievement, parent investment is a more robust pathway for White than for African American children, and school quality is a more robust pathway for African American than for White children.
In conclusion, higher cost of living was related to lower academic achievement for poor and low-income children. However, because eligibility for government assistance currently does not account for geographical variations in cost of living, low-income families living in high-cost areas are not receiving the assistance that could benefit them. I discuss three policy recommendations for providing more assistance to poor and low-income families living in high-cost areas: 1) adjust eligibility for government assistance to account for cost of living; 2) support state programs that supplement family income (particularly in high-cost states); and 3) support poor and low-income families via targeted subsidies for housing, child care, and health care.
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