New data on test scores of five-year olds suggest supporting parents to balance work and care, and providing subsidised preschool daycare, could help to limit the consequences of income inequality for children.

Previous research on income inequality has shown that differences in early cognitive development between children from high-income and low-income families are greater in the USA than in other countries. A new research project shows that a given level of income inequality is associated with larger gaps in how five-year-olds complete cognitive tests (language and literacy) in the USA than in the UK, Australia and Canada.

Three researchers, Bruce Bradbury, Jane Waldfogel and Elizabeth Washbrook, explored the role of five factors known to be related to child development in reinforcing income inequalities: the extent to which children in different income groups live with both parents, the likelihood that children attend daycare, the likelihood that children have an immigrant parent, the average hours worked by mothers, and the likelihood that a child’s mother was very young when she gave birth. For all these factors, higher-income families in USA have a greater advantage over lower-income families than do their higher-income counterparts in other countries.

This finding is consistent with the policy conclusions derived from other research: income inequality’s contribution to unequal child development can be reduced by helping parents to balance work and care, and by providing subsidised preschool daycare.

Using existing income inequality studies in the USA, the UK, Australia and Canada, the researchers compared five income groups across the four countries (using price adjustments to show all in US$):

Quintile 1 (Q1)            <$27K

Quintile 2 (Q2)            $27K-$44K

Quintile 3 (Q3)            $44K-$65K

Quintile 4 (Q4)            $65K-$96K

Quintile 5 (Q5)            > $96K

Previous work has shown that income itself is very important. A better income not only allows parents to invest more in their children (including living in a safer neighborhood), but also supports family stability and resilience to stress. Income inequality is greater in USA. Compared to all the other countries, a larger proportion of families in the USA are in the lowest income group. And compared to Australia and Canada, a larger proportion of families in the USA are in the highest income group.

But income is not the only factor that can drive inequality. Setting aside the fact that in USA a greater proportion of parents are in the very low and very high income groups, the difference in average cognitive test performance of children from the highest group (Q5) compared to the lowest group (Q1) is larger in the USA, though not very different from the UK. Strikingly, where the USA truly stands out is in how far the highest-income children (Q5) pull away from the middle-income group of children (Q3).

The researchers found that in the five areas, differences between the higher-income (Q5 and Q4) and middle-income (Q3) groups in the USA were significantly more pronounced than in other countries.

  • Five-year-old children living with both biological parents

The difference in the proportion of five-year-olds living with both biological parents in Q4 and Q5 families versus Q3 families is considerably higher in the USA compared to the other countries.

Living with both biological parents is associated with better cognitive outcomes, so this factor may be contributing to the greater difference between average- and higher-income families in the USA.

  • Attending center-based care before going to school

Q4 and Q5 parents in the USA are much more likely than Q3 parents to send children to preschool, compared to the other countries.

This is probably because preschool care is more subsidised in the other countries, so less exclusively available to the well-off. This disparity is likely to be linked to differences in average cognitive test scores.

  • Proportion of children with an immigrant parent

Q4 and Q5 families in the USA are less likely than Q3 families to include an immigrant parent. In the other countries, Q4 and Q5 families are more likely to include an immigrant parent.

Having an immigrant parent is associated with additional difficulties associated with social integration. This finding suggests that higher-income children in the USA are less likely to be held back by such difficulties, on average.

  • Average hours worked by mothers of five-year-olds

In the UK, Canada and Australia, mothers in higher-income families are likely to work considerably longer hours than middle-income mothers, which could be associated with lower cognitive scores for their five-year-olds. But in the USA, mothers in higher-income families work less, potentially combining the benefits of higher income and greater parental presence.

  • Proportion of mothers under age 20 at childbirth

In the UK and Australia, very few mothers in either the middle- or high-income groups were less than 20 years old when their child was born. In the USA, however, the proportion of such mothers is considerably higher in the middle-income group. Having a young mother is known to be associated with lower cognitive performance at age five.

The research project didn’t look at some other potential factors that could be related to income inequality. For one, the cost of high-quality daycare is higher in the USA because the other countries provide more universal publicly funded care. That means access to high-quality daycare is more exclusive to higher-income groups in the USA. (This is offset, however, by substantial programmes, such as Head Start, for very low-income families in the USA.) Another key factor may be residential segregation: more segregation exacerbates income quality because it leads to more concentration of advantages and disadvantage between income groups in different neighborhoods.

Header Photo: Paul Hart. Creative Commons.