Income Inequality and the Well‐Being of American Families

• Published date: 01 July 2019
• Author: Elizabeth Votruba‐Drzal,Richard Murnane,Greg Duncan,Katherine Magnuson
• Date: 01 July 2019
• DOI: http://doi.org/10.1111/fare.12364

G D University of California–Irvine

K M University of Wisconsin–Madison

R M Harvard University

E V-D University of Pittsburgh

Income Inequality and the Well-Being

of American Families

Income inequality has increased steadily over

the past 40 years. We briey review the nature

and causes of this increase and show that

income-based gaps in children’s academic

achievement and attainment grew as well. To

probe whether the increasing income gaps may

have played a role in producing the growing

achievement and attainment gaps, we summa-

rize the evidence for the effect of family income

on children, paying particular attention to the

strength of the evidence and the timing of eco-

nomic deprivation. We show that, in contrast

to the nearly universal associations between

poverty and children’s outcomes as reported

in the correlational literature, evidence from

social experiments and quasi experiments shows

impacts on some domains of child functioning

but not others. At the same time, we have no

experimental evidence on how economic depri-

vation affects children in the rst several years

of life in the United States. Family environments

are all important in the rst several years of

a child’s life, when they are developing most

rapidly and have limited autonomy from family,

yet family incomes tend to be the lowest in these

early years of family development. We describe

an ongoing experimental study of income effects

on infants and toddlers.

School of Education, University of California, Irvine, 2001

Education, Irvine, CA 92697 (gduncan@uci.edu).

Key Words: poverty, early childhood,child development.

Americans have long taken pride in the belief

that the United States is a land of opportu-

nity, where success depends more on one’swork

ethic than birthright (Alesina & La Ferrara,

2005). Economic growth has made that ideal a

reality for generations of Americans, including

many who started out poor. The quarter cen-

tury following World War II was a golden era

for the U.S. economy, with the benets of eco-

nomic growth being shared by high-, middle-

and low-income families (Goldin & Katz, 2009).

But beginning in the 1970s, economic changes

favoring highly educated workers, plus demo-

graphic shifts such as the rise of single-parent

families, produced income gaps between high-

and low-income families.

In this article, we explore some of the con-

sequences of income inequality for American

families and children. We rst document the

degree to which income inequality between

children growing up in low- and high-income

families has increased over the past 40 years.

We then show that growing income gaps have

been more than matched by increases in the

gaps between what low- and high-income par-

ents spend on enrichment activities for their

children.

Most distressingly, these growing income

and expenditure gaps have been accompanied

by a steady divergence in the achievement and

educational attainment of children living in low-

and high-income families. Differences in the

reading and math achievement levels of these

Family Relations 68 (July 2019): 313–325 313

DOI:10.1111/fare.12364