Effects of the Great Recession on Child Development

Abstract

The Great Recession and its reverberations resulted in levels of economic distress unprecedented since the 1930s. Economic downturns, including the Great Recession, are known to affect adult employment and income, housing, family composition, and financial strain. Many of these family characteristics affect child and adolescent development in the short and long run. The nature of children’s experiences in economically unstable families during the Great Recession is not yet fully understood. This article summarizes empirical research on the relationship between economic downturns and child and youth development. It also discusses theoretical perspectives linking economic downturns to child development through the family’s emotional and behavioral processes, on one hand, and family investments of time and money, on the other. The evidence from existing studies of parental job loss, residential moves, income instability, and financial strain suggests that the Great Recession may ultimately have negative effects on child development.