Family income and its relation to preschool children's adjustment for families in the NICHD Study of Early Child Care.

The current study examines relations of mean-level estimates, linear changes, and instability in income and family processes to child outcomes and addresses whether income, through its impact on family functioning, matters more for children living in poverty. Temporal changes and instability in family processes, but not income, predicted children's adjustment. Cross-sectional mediational analyses indicated that for families living at the poverty threshold, family processes fully mediated the effect of average income over the study period on social behavior but only partially mediated its effect on cognitive-linguistic development. The strength of these associations diminished as average income exceeded the poverty threshold. That is, income had a greater impact on the family functioning and development of poor children than of nonpoor children.