The Consequences of Income Instability for Children's Well-Being

Income instability is an important and under- studied dimension of the established empirical relation between family income and children's healthy develop- ment. Frequent fluctuations in income may influence daily processes and routines of family life, but the nature of such effects also may vary by specific patterns of income instability, parents' responses, and children's characteristics. In this article, we review existing theory and research on income, family functioning, and child development to better understand the potential implica- tions of income instability for children's development. We also integrate theoretical insights from developmental psy- chology, economics, sociology, and social neuroscience to propose a set of testable hypotheses for social science investigations on this topic. KEYWORDS—income instability; stress; household chaos Families' economic resources strongly influence children's developmental trajectories. In the developed and developing world alike, children in low-income homes consistently fare less well on measures of cognitive, social-emotional, and physical development than children in higher income homes (for a review, see Gennetian, Castells, & Morris, 2010). We know that family income level often varies across childhood and is most influential in shaping children's outcomes early in life (e.g., Duncan, Yeung, Brooks-Gunn, & Smith, 1998; Wagmiller, Lennon, Kuang, Alberti, & Aber, 2006). Much less is known about how regular or repeated patterns of changes in income affect family processes and children's development.