Change in family income-to-needs matters more for children with less.

Hierarchical linear modeling was used to model the dynamics of family income-to-needs for participants of the National Institute of Child Health and Human Development Study of Early Child Care (N = 1,364) from the time that children were 1 through 36 months of age. Associations between change in income-to-needs and 36-month child outcomes (i.e., school readiness, receptive language, expressive language, positive social behavior, and behavior problems) were examined. Although change in income-to-needs proved to be of little importance for children from nonpoor families, it proved to be of great importance for children from poor families. For children in poverty, decreases in income-to-needs were associated with worse outcomes and increases were associated with better outcomes. In fact, when children from poor families experienced increases in income-to-needs that were at least 1 SD above the mean change for poor families, they displayed outcomes similar to their nonpoor peers. The practical importance and policy implications of these findings are discussed.