Childhood Psychological Problems Have Long-Term Impact on Individuals' Earnings and Social Relationships

For Release

March 28, 2011

Psychological problems experienced during childhood can have a long-lasting impact on an individual's life course, reducing people's earnings and decreasing the chances of establishing long-lasting relationships, according to a new study.

Analyzing information about a large group of British residents followed for five decades from the week of their birth, researchers found that family income was about one-fourth lower on average by age 50 among those who experienced serious psychological problems during childhood than among those who did not experience such problems.

In addition, childhood psychological problems were associated later in life with being less conscientious, having a lower likelihood of being married and having less-stable personal relationships, according to findings being published in the Proceedings of the National Academies of Sciences.

"These findings demonstrate that childhood psychological problems can have significant negative impacts over the course of an individual's life, much more so than childhood physical health problems," said James P. Smith, one of the study's authors and a senior economist at the RAND Corporation, a nonprofit research organization. "The findings suggest that increasing efforts to address these problems early in children may have large economic payoffs later in life."

The other two authors of the study are Alissa Goodman and Robert Joyce of the Institute for Fiscal Studies in London.

Researchers found that the impacts of psychological disorders during childhood are far more important individually and collectively over a lifetime than childhood physical health problems. To illustrate, while family income at age 50 is reduced by 25 percent or more due to childhood mental problems, the reduction in family income on average is 9 percent due to major childhood physical health problems and only 3 percent due to minor childhood physical health problems. A central reason for the larger impact of childhood mental health problems is their effects take place much earlier in childhood and persist, researchers say.

The study is the latest in a growing body of evidence that shows psychological troubles early in life can have a long-term negative impact on earnings and social relationships. An earlier study co-authored by Smith showed that childhood psychological problems had a major impact on adult socioeconomic standing, costing $2.1 trillion over the lifetimes of all affected Americans. The results found for the American sample closely parallel those found for the British sample. Another source of concern is that in both America and Britain childhood mental problems appear to be increasing over time.

The latest study was conducted by analyzing information collected as part of the National Child Development Study, which has followed the lives of a single group of 17,634 children who were born in Britain during the first week of March in 1958.

Information has been collected from the group periodically, including surveys about childhood physical and psychological health through physician-led examinations, extensive parental questionnaires and teacher reports. The study includes detailed information about participants' parents, including socio-economic details and family circumstances such as whether there was instability in the home.

Researchers found that the negative economic impact of childhood psychological problems were apparent early in adulthood, with household income 19 percent lower among 23-year-olds who had psychological problems as a child as compared to those who did not.

Some of the smaller family income is caused by a lower likelihood that those who had childhood psychological problems will live with a partner as an adult. By age 50, people who had childhood psychological problems had a 6 percent lower probability of being married or cohabitating and an 11 percent lower chance of working.

The National Child Development Study includes assessments of participants' cognitive functioning and personality traits at age 50, allowing researchers to estimate the impact of childhood psychological problems in those areas.

Children with mental health issues showed reduced cognitive abilities as adults, possibly because their psychological problems make it difficult for them to concentrate and remember, researchers say. Childhood mental health problems also had a negative impact at age 50 on agreeableness and conscientiousness, two key measures of personality.

Researchers found childhood mental health problems also had significant effects on inhibiting social mobility across and within generations and reduced the number of distinct continuous jobs a person held as an adult. This is important because one way people increase their income is by changing jobs by moving on to better opportunities.

The research was supported by a grant from the U.S. National Institute on Aging and was conducted through the RAND Labor and Population program. The program examines issues involving U.S. labor markets, the demographics of families and children, social welfare policy, the social and economic functioning of the elderly, and economic and social change in developing countries.

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