Family wealth may explain differences in test scores in school-age children

A new study published in the March/April 2008 issue of the journal Child Development finds that family wealth might partly explain differences in test scores in school-age children. The study, conducted by researchers at New York University, also found that family wealth is positively associated with parenting behavior, home environment, and children’s self-esteem.

Prior research has documented the association between children’s cognitive achievement and the socioeconomic status of their parents as measured by education level, occupation, and income. Many of these studies focused on the effect of poverty—defined by family income—on children’s achievement, but household wealth (i.e., net worth) has received little attention.

This new study used new methods, including data from a new national study (the Panel Study of Income Dynamics and its Child Development Supplement). It explored many functional forms and sources of wealth, looking at different mediating pathways of wealth from distinct sources, and analyzing how wealth affects children’s cognitive achievement at different stages of childhood.

The researchers found a marked disparity in family wealth between Black and White families with young children, with White families owning more than 10 times as many assets as Black families. The study found that family wealth had a stronger association with cognitive achievement of school-aged children than that of preschoolers, and a stronger association with school-aged children’s math than with their reading scores. Family wealth accumulated from different sources also was found to have a distinct influence on children at different developmental stages. Liquid assets, particularly holdings in stocks or mutual funds, were positively associated with school-aged children’s test scores. Family wealth was associated with a higher quality home environment, better parenting behavior, and children’s private school attendance.