The Ties That Bind: Social Capital, Families, and Children's Well-Being

This paper discusses (a) the role of cognitive and noncognitive ability in shaping adult outcomes, (b) the early emergence of differentials in abilities between children of advantaged families and children of disadvantaged families, (c) the role of families in creating these abilities, (d) adverse trends in American families, and (e) the effectiveness of early interventions in offsetting these trends. Practical issues in the design and implementation of early childhood programs are discussed.

Although adverse consequences of poverty for children are documented widely, little is understood about the mechanisms through which the effects of poverty disadvantage young children. In this analysis we investigate multiple mechanisms through which poverty affects a child's intellectual development. Using data from the NLSY and structural equation models, we have constructed five latent factors (cognitive stimulation, parenting style, physical environment, child's ill health at birth, and ill health in childhood) and have allowed these factors, along with child care, to mediate the effects of poverty and other exogenous variables. We produce two main findings. First, the influence of family poverty on children's intellectual development is mediated completely by the intervening mechanisms measured by our latent factors. Second, our analysis points to cognitive stimulation in the home, and (to a lesser extent) to parenting style, physical environment of the home, and poor child health at birth, as mediating factors that are affected by lack of income and that influence children's intellectual development.