How Does Early Deprivation Relate to Later-Life Outcomes? A Longitudinal Analysis

Abstract

Measures of material deprivation are increasingly used as alternatives to traditional poverty indicators. While there exists extensive literature focusing on the impact that growing up in a (financially) poor household has on future success, little is known about how material deprivation relates to long-run outcomes. This study uses longitudinal data from the 1970 British Cohort Study to assess the relationship between material deprivation and outcomes in adult life. We control for an extensive set of observable characteristics, and further employ value-added analysis and generalized sensitivity analysis to assess the nature of this relationship. We find that deprivation relates to a diverse set of outcome variables, but the magnitude of the conditional relationships are generally small. Immaterial indicators of family quality show relatively stronger ties to future outcomes, especially with respect to non-cognitive skills.

Keywords: material deprivation, long-run outcomes, poverty, family disadvantage

JEL Classification: I32, J13, J62