Long-Run Impacts of Early Childhood Poverty:

Evidence from Norwegian Registry Data

Greg J. DuncanKjetil Telle

Kathleen M. Ziol-GuestAriel Kalil

Research Questions

• What are the long-run impacts of low income during childhood, net of correlated family factors surrounding a child’s birth on adult achievement?

• Do these associations differ by the period of childhood income?

• How do these associations compare between Norway and the U.S.?

Background

Empirical studies suggest low-income children fare worse than higher income counterparts

Early childhood may be especially sensitive to environmental influences

Evidence of the specific role of income is limited to U.S. studies

Contributions

Add to literature on adult impacts of low income very early in life

Use longitudinal data with very high-quality measures of income throughout childhood

Compare evidence from similar birth cohorts in Norway and the U.S.

Norwegian-Specific FindingsIntergenerational earnings correlations lower

in Scandinavia than in Anglo-Saxon Europe and the US (Bjorklund & Jantti, 2000)

Nevertheless, social disadvantage matters Low income children more likely to become

low-income earners (Bratberg et al. 2008) Children of social assistance claimants

more likely to claim social assistance (Lorentzen & Nilsen 2008)

Low childhood SES associated with increased mortality for most causes of death during young adulthood (Strand & Kunst, 2007)

Specific role of early income not yet established

Norwegian Data and Sample(n=765,811)

Administrative register data compiled by Statistics Norway

All children born between 1968 and 1979

Adult outcomes measured between ages 24 and as late as age 37 for the earliest cohort

Income measured prenatal to age 15; controls measured around or before birth

Adjust standard errors for presence of siblings

U.S. Data and Sample(n=1,589)

Panel Study of Income Dynamics (PSID) Children born between 1968 and 1975 Adult outcomes measured between ages

25 and as late as age 37 for the earliest cohort

Use attrition-adjusted weights Income measured prenatal to age 15;

controls measured around or before birthAdjust standard errors for the presence of

siblings

Childhood Income

Income measured in prenatal year to age 15 (total of 17 years)

Norwegian Registry (1998 Kroner) Taxable income originating from the tax

files Child allowance transfers Social Assistance transfers

U.S. PSID (2005 Dollars) Taxable income Cash transfers

Adult Outcomes

Average annual adult earnings starting at age 24

Average weekly (Norway) or annual (U.S.) hours worked

Years of completed schooling around age 24

Sample Description

• Norway– 49% female– 42% first born– 1.96 average

number of siblings– Average age of

mother at birth 26.32

– Average education of father at birth 11.60

– 91% mothers married at birth

• U.S.– 47% female– 42% first born– 2.21 average

number of siblings– Average age of

mother at birth 24.84

– Average education of father at birth 12.09

– 84% mothers married at birth

Childhood Period Income(2005 USD)

Norway Prenatal to age 5$38,807 (17,408)

Age 6 to age 10$48,094 (21,094)

Age 11 to age 15$53,824 (27,146)

U.S. Prenatal to age 5$47,842 (28,340)

Age 6 to age 10$54,226 (39,012)

Age 11 to age 15$59,067 (45,369)

Adult Achievement Outcomes

Norway

$32,370 average annual earnings (2005 USD)

24.37 average hours worked per week (1267 annual equivalent)

12.91 years completed schooling

U.S.

$34,560 average annual earnings (2005 USD)

1892 average hours worked per year (37 weekly equivalent)

13.39 years completed schooling

Annual EarningsStandardized Regression

Coefficients

Norway US

Model 1

P-15 .06** .31**

Model 2

P-15 .09** .23**

Model 3

Ln P-15 .11** .37**

Model 4

Ln P-5 .05** .27**

Ln 6-10 .02** .06

Ln 11-15

.06** .08

Work HoursStandardized Regression

Coefficients

Norway US

Model 1

P-15 .05** .15**

Model 2

P-15 .08** .11**

Model 3

Ln P-15 .11** .20**

Model 4

Ln P-5 .05** .20**

Ln 6-10 .01** -.03

Ln 11-15

.07** .06

Years Completed SchoolingStandardized Regression

Coefficients

Norway US

Model 1

P-15 .18** .34**

Model 2

P-15 .07** .14**

Model 3

Ln P-15 .10** .22**

Model 4

Ln P-5 .01** .10*

Ln 6-10 .02** -.04

Ln 11-15

.09** .18**

Analysis

Average annual income in various childhood periods Prenatal to age 5 Age 6 to age 10 Age 11 to age 15

Splines with knot at 120,000 Kroner and $25,000 Allows for distinct linear effects for

average incomes up to the knot and for incomes higher than the knot

OLS Spline ModelAnnual Earnings (ln)

Norway

U.S.

P-5 <120k

.14** <25k

.52*

>120k

.01** >25k

.05**

6-10 <120k

.07** <25k

.14

>120k

.01** >25k

.01

11-15

<120k

.12** <25k

.04

>120k

.01** >25k

.00

OLS Spline ModelWork Hours

Norway

U.S.

P-5 <120k

2.19** <25k

506.74**

>120k

.11** >25k

20.60*

6-10 <120k

1.06** <25k

-60.82

>120k

.06** >25k

1.28

11-15

<120k

1.63** <25k

74.18

>120k

.18** >25k

-.92

OLS Spline ModelYears Completed Schooling

Norway

U.S.

P-5 <120k

.22** <25k

.19

>120k

.01** >25k

.03

6-10 <120k

.18** <25k

.65**

>120k

.01** >25k

-.06

11-15

<120k

.41** <25k

-.31

>120k

.05** >25k

.09**

-2

-1.5

-1

-0.5

0

0.5

1,673

10,477

20,041

29,335

38,681

48,157

57,666

79,983

Norway US

Dummy variable estimates of the effects of early childhood income on log earnings (relative to high income)

E arly childhood income in US $

10

15

20

25

30

35

40

45

1,673

10,477

20,041

29,335

38,681

48,157

57,666

79,983

Norway

US

Dummy variable estimates of the effects of early childhood income on weekly work hours

E arly childhood income in US $

11.5

12

12.5

13

13.5

14

14.5

15

1,673

10,477

20,041

29,335

38,681

48,157

57,666

79,983

Norway US

Dummy variable estimates of the effects of early childhood income on years of schooling

E arly childhood income in US $

Summary

Childhood stage matters in understanding links between childhood income and adult success, although not as much in the Norwegian as in the U.S.

Larger estimated impact of increments to low income early in childhood as compared with later periods in both datasets

Steeper income gradients for U.S. than Norwegian children

Conclusions

Our results suggest evidence that the Scandinavian egalitarian welfare model helps mitigate the effects of disadvantaged family background

Nevertheless, provides supporting evidence to U.S. studies on the role of income in early childhood

Next steps: criminal charges, non-marital fertility, social assistance receipt