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How mothers’ financial problems affect children’s health and development

 

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How mothers’ financial problems affect children’s health and development

This paper considers the consequences on young adults of growing up with a mother who reported experiencing major financial problems.

It uses UK data from the Avon longitudinal study of parents and children to show that early childhood financial problems are associated with worse adolescent cognitive and non-cognitive outcomes, controlling for both income and a set of standard variables, and in value-added models controlling for children’s earlier age-five outcomes. The estimated effect of financial problems is almost always larger than that of income. Around a quarter to half of the effect of financial problems on the non-cognitive outcomes seems to transit through mothers' mental health.