Money Matters: a Nuanced Approach to Understanding the Relationship between Household Income and Child Subjective Well-Being

Abstract

This paper examines the links between household income and child subjective well-being. Previous studies produce contradictory findings: qualitative investigations indicate a strong relationship which is elusive in quantitative studies. I hypothesise that the reason for this discrepancy is that household-level measures of child poverty do not adequately capture children’s active roles in forming views on their material needs, assessing their comparative socio-economic status, and contributing to processes and outcomes of intra-household resource sharing. Thus a relationship between household income and subjective well-being is hypothesised to exist, but to be mediated by factors including (among others) material deprivation, perceptions of fairness in the processes and outcomes of intra-household allocation, and subjective material well-being. Drawing on survey data from a sample of 1010 parent-child (aged 10–16) pairs in England, structural equation modelling is used to examine these potential mediating effects. Findings indicate that income has a complex role to play in child subjective well-being, with significant direct and indirect associations. Income, deprivation, perceptions of the fairness of intra-household allocation processes and outcomes, and subjective material well-being are all significantly interrelated and are all predictors of subjective well-being. The complex nature of these relationships illustrates the multi-dimensional nature of child poverty and its impacts. Household income is an important factor; but alone it cannot capture children’s active roles in assessing their needs and material living conditions. This confirms the importance of considering children’s agency in understandings of child poverty and material well-being, and including their reports in studies of child poverty and intra-household allocation.