Behavioural and Emotional Problems in Children and Educational Outcomes: A Dynamic Panel Data Analysis.

This study investigates the effects of behavioural and emotional problems in children on their educational outcomes using data from the Longitudinal Survey of Australian Children (LSAC). We contribute to the extant literature using a dynamic specification to test the hypothesis of knowledge accumulation. Further, we apply the system generalised method of moments (GMM) estimator to minimise biases due to unobserved factors. We find that mental disorders in children has a negative effect on the National Assessment Program-Literacy and Numeracy (NAPLAN) test scores. Among all mental disorders, having emotional problems is found to be the most influential with one standard deviation (SD) increase in emotional problems being associated with 0.05 SD reduction in NAPLAN reading, writing and spelling; 0.04 SD reduction in matrix reasoning and grammar; and 0.03 SD reduction in NAPLAN numeracy.