Poverty and the Psychosocial Competencies of Children

Evidence from the Young Lives Sample in Four Developing Countries

Abstract

Using unique data from four developing countries, this paper explores the relationship between material poverty and the psychosocial competencies of children. Within a cohort of 12-year-olds, we find that measures of self-efficacy, sense of inclusion, self-esteem and educational aspirations all correlate with measures of the material well-being of the family in which they are growing up. In short, material circumstances shape these wider dimensions of child well-being. As other evidence has shown, these measures of psychosocial competencies reflect important life skills that affect children as adults and shape their future socioeconomic status. This suggests a mechanism by which poverty may be transmitted across generations. In addition, our evidence shows how a caregiver’s education and school participation affects children’s psychosocial competencies. This may indicate a possible means of overcoming such transmission of poverty over time.