Poverty across generations
Mobility and persistences: Poverty across generations
Poverty is an intergenerational, relational problem. While the prevailing philosophical perspective promotes the view of “individuals as choice makers and agents of their own lives,” in reality our choices are inescapably influenced and bound by the “interlocking nature of human lives and generations.” We all live what sociologist Glen Elder Jr. calls “linked lives,” where our life trajectories and transitions are shaped and bound by relationships with others—often most strongly by those closest to us, our families. If we care not only about better outcomes for families now, but also families in the future, it is critical to explore the links across generations and to understand the extent to which parental circumstances and behaviours determine the life chances and outcomes of our most vulnerable people. This deeper understanding can guide poverty-alleviating policy for our children and the generations to come.
“Children largely ‘inherit’ their parent’s socio-economic status,” writes Anna Cristina D’Addio of the OECD, summarising the literature. We saw earlier how a family in poverty one year is more likely to be poor the following year. Without some sort of intervention, poverty not only persists from year to year, but, as we’ll see, from generation to generation. Income isn’t the only inheritance that parents leave their children either: occupations, wealth, benefit receipt, personality traits, and beliefs all tend to persist across generations to varying degrees. D’Addio finds that this transmission process operates through:
…a broad range of resources inherited from the parents either directly through genes (as in the case of health or ability) and wealth (assets or estates), or indirectly – for example when children learn behaviours and attitudes. These resources interact with the cognitive and noncognitive abilities of children in ways that can work together to strongly influence their future life chances and to strengthen the transmission of inequality. 
Like economic resources, social and cultural resources can accumulate and offer a return in the form of educational and employment success, referred to by economists as human capital. Sociologists tend to refer to this process as the accumulation of social and cultural capital. Social capital involves building and harnessing group membership, networks, and “contacts” for support and influence, while cultural capital denotes knowledge, attitudes, skills, and credentials that provide advantages and higher status in society. Economic, social, and cultural capital are mutually reinforcing, and offer one explanation for how inequality is transmitted and inherited across generations.
One lens to view this inheritance through is intergenerational income mobility, a concept like income mobility above, but rather than tracking a family’s income over time, it tracks how parental income influences children’s income when they grow up. Intergenerational mobility (and its inverse, intergenerational persistence) is of interest because it is considered to be a rough and ready proxy for equality of opportunity, as lower mobility (or higher persistence) indicates that fewer people have been willing and/or able to take chances available to them to advance socially and economically. Low mobility also signals a waste of “human capital,” where children from disadvantaged backgrounds are prevented from using their full range of skills and talents to productively contribute to society and the economy.
There is a legitimate, normative debate to be had regarding the “optimal” level of overall intergenerational income mobility—a society’s values will ultimately determine where the balance lies. Besides the fact that it would be impossible to implement policy-wise—as many of the drivers lie in the family context—there are other pitfalls involved with striving for “pure” equality of opportunity. These include leaving behind those who fail to grasp the increased range of opportunities for reasons outside of their control and the requirement to unduly restrict parents from investing in their children’s lives—a significant source of inequality.
It is much easier, however, to agree that low mobility at the bottom of the income distribution is a serious concern—this is intergenerational poverty. Low mobility for families on low incomes signals an increased likelihood that poverty, and the cluster of harmful outcomes that likely go with it, will be inherited by the next generation. We, therefore, have a particular interest in the mobility and persistence of families with children on lower incomes. To return to the apartment illustration from earlier, our primary concern is the future outcomes of children raised in families in the basement. Ultimately, our goal is an “empty basement.” Using a thought experiment, economist Gary Solon showed how intergenerational mobility works by contrasting two imaginary societies—one with “complete” mobility and the other with none. In the first society parents’ economic background bears no influence on how rich or poor their children will be when they grow up, while in the second, it completely determines their children’s future economic outcomes. In real life, most countries fall between these two extremes. Figure 10 below shows international comparisons of intergenerational mobility, where 0 is complete mobility and 1 denotes no mobility. In this instance, the lower the figure the lesser extent a parent’s earnings will influence their children’s economic circumstances when they grow up, representing greater mobility.
International intergenerational mobility comparisons
When it comes to relative levels of intergenerational income mobility, New Zealand is in the middle of the road when compared internationally. The intergenerational earnings elasticity (IGE) of 0.29 Figure in figure 10 signifies that in New Zealand, all else being equal, the children of parents earning twice as much as another family would, on average, earn somewhere around a quarter to one-third more than the poorer family’s children when they reached their early thirties. This result is around the OECD average; the Scandinavian countries have higher mobility and the US, Italy and the UK have lower mobility. The level of intergenerational mobility for Māori was also found to be similar to that of New Zealand overall, although it is worth noting that this mobility is from a lower baseline than that of most New Zealanders. The OECD predicts a decline in New Zealand’s future intergenerational mobility unless countervailing measures are introduced.
Averages across society can mask important trends across different groups within society, however. International evidence that looks at differences across the income distribution (from the poorest to the richest) is mixed, but broadly points towards there being lower mobility (and higher persistence) at both ends of the income distribution in most OECD countries. This means that poverty in one generation increases the likelihood that the next will be poor as well—poverty is likely to persist across generations. In other words, children living in the basement and those in the penthouse are both more likely to live where their parents did when they grow up than those in the middle floors.
Intergenerational poverty and poor outcomes
Intergenerational poverty is linked with a range of poor outcomes. As the report by DWP notes: “parental income has one of the strongest associations with children’s future income and children’s intermediate outcomes, with poor children disadvantaged across a spectrum of outcomes and from an early age.” As mentioned above, this association is well-established. The Children’s Commissioner’s Expert Advisory Group went so far to say that “incontrovertible evidence now exists showing that child poverty has long-lasting negative effects across multiple life domains.”
This leads us to a more interesting and fundamental question that goes beyond this well-established correlation between family income experienced in childhood and that child’s future income as an adult that the intergenerational mobility figures show. Does poverty in one generation cause poverty in the next in any meaningful way, or is it more an indicator or symptom? Does it cause other poor outcomes? If it does, how strong are the relative effects? We will now turn to evidence that controls for these potentially confounding factors like parental education, ethnicity, or drug and alcohol problems, to name a few.
Causal relationships across generations
Identifying whether poor outcomes later in life are the result of poverty in childhood or, alternatively, of individual, family and social factors is a critical question for policies aimed at reducing long-term disadvantage. If family income during childhood does play a direct causal role, then policies that boost income will likely be effective at reducing intergenerational poverty. However, if other individual, family, or social factors significantly mediate this relationship between childhood poverty and poor adult outcomes, then income-boosting policies may be ineffective in the long run. But teasing out cause and effect across generations is more difficult than within lifetimes. This is because intergenerational timeframes stretch over several decades and involve a large number of variables and events, compared with trigger events like losing a job or worker in the family where cause and effect can be observed much more easily.
As we saw earlier (in the discussion of early motherhood), when an outcome like poverty is the result of a combination of factors, regression models are the usual tool for identifying which factors have an independent effect on outcomes later in life by helping to rule out alternative explanations for the observed relationship. Because “low income does not occur randomly,” pre-existing differences between families need to be incorporated into the equation to assess the relative influence and strength of these factors.
Pre-existing differences matter, and can obscure the nature of seemingly straightforward relationships. Children of disadvantaged families are more “likely to have home environments or face other challenges which would continue to affect development even if family income rose substantially.” Parents with drug and alcohol dependence, for example, could contribute to the future poverty of their children because this addiction may have a negative and simultaneous impact on the parent’s ability to parent well, and to get and hold a job. As we saw in the section on poverty within a lifetime, “larger families are more likely than smaller families to experience persistent poverty and … families with very young children are more likely to experience persistent poverty than families with older children.” But, because larger families are also more likely to have younger children, we need to control for one or the other factors to work out which (or both) is driving the persistent poverty.
Potential causes of future poverty and hardship
There is a rich international literature surrounding the relationship between parental income and children’s current and future outcomes (including poverty). Economist Dr. Simon Chapple, writing for the OECD, summarised the findings of the literature, which will be fleshed out in the remainder of the section:
- Controlling for essentially pre-determined covariates like parental age and education reduces the size of raw income effects on child well-being.
- After controlling for covariates, the effect of income on child well-being is small compared to other child outcome-related factors like parents’ education
- The consensus is also that some of the remaining relationship of income to child well-being is causal. But in terms of effect sizes, the causal effects are modest.
- Effects in early childhood are typically larger than in late childhood 
- Effects of income on child well-being are stronger for some outcomes than for others—for example they appear larger for cognitive ability and education outcomes than for behaviour and for health outcomes (both physical and mental).
- Income effects on child well-being are stronger for children in poorer families.
High-quality evidence from New Zealand supports Chapple’s claims. As Chapple and co-author Prof. Jonathan Boston conclude in their book, Child Poverty in New Zealand:
While there may be no single cause of poor child outcomes, it is clear that both poverty and other factors influence the way children grow up. There is a robust body of evidence that suggests that the income of children’s families directly causes important future outcomes. There is a complementary body of evidence that suggests other influences are more important, including parenting quality, and they serve to diminish the raw impact of income…good outcomes for children are not simply about adequate family incomes. Those interested in disadvantaged children’s lives need to consider seriously the quality of parenting, schools and neighbourhoods. 
Links between childhood poverty and future poverty – New Zealand research
Just what combination of poverty and other factors influence the way children grow up? Using data from the longitudinal Christchurch Health and Development Study (CHDS) that follows a cohort of people born there in 1977 (now in their thirties), Joseph Boden, David Fergusson and John Horwood assessed which individual and family factors—both past and present— most accurately predict family economic outcomes at age 30.
The CHDS data investigates the link between childhood family income and future personal income at 30, seeking to untangle the relative effects of low family income in childhood and other factors that might lead to poverty and other poor outcomes in the future. Current household and family characteristics were not considered as dependent variables in this study. They found that low family income during childhood was associated with:
- Later lower educational achievement,
- Poorer economic circumstances,
- Higher rates of criminal offending,
- Higher rates of mental health problems, and
- Higher rates of teenage pregnancy.
After adjusting for covariates (family background and early life circumstances like child intelligence or parental education), the links disappeared between low family income and mental health, offending and teenage pregnancy—these relationships were explained by the covariates. Using this model, the relationship between low family income and both lower educational achievement and poorer economic circumstances in adulthood, while diminished, remained and was significant, suggesting a potential causal relationship exists. This indicates that growing up in a poor family “poses a barrier to future educational and academic success independently of the child’s academic ability and family context.” According to this evidence, poverty experienced as a child is likely to be a small to modest independent causal factor leading to poverty in the future.
Table 10 shows the extent of this effect. It displays the estimated adjusted relationships between childhood family income and adult measures of educational and economic outcomes ordered by income quintiles—1 being the lowest, 5 being the highest. The adjustment here involves making an assumption that all the cohort members scored the same for the covariates.
Educational achievement and economic advantage rise as childhood family income rises. These relationships are relatively linear, suggesting “an intergenerational transmission of educational and economic privilege in which increasing childhood family income was associated with increasing educational and economic privilege even after adjustment for a wide range of childhood, family and related factors.” Research using data from the Dunedin Multidisciplinary Health and Development Study backs the findings from the work in Christchurch, indicating that: “on average, the childhood income of people’s parents explains a modest proportion of the variance in their adult income compared to other possible explanatory variables.”
When it comes to children’s development, the timing of this income matters too. Parental income received while children are younger appears to have more impact than later in life, when children reach their teenage years for example. The early years are crucial. New Zealand research using data from the Dunedin cohort study shows that better socio-economic circumstances in adulthood were unlikely to counteract or undo all the negative effects of poverty in childhood, underscoring how critical children’s early years are for their development and outcomes when they grow up. As in many other policy areas, prevention appears to be better than cure.
Overall, the New Zealand evidence offered here lends support to the findings that family income during childhood plays a small to modest role on future outcomes—the precise influence depends on which models are used.
Theories of transmission across generations
Theories are needed to understand the potential mechanisms and causal processes present in the associations between the many variables that are examined in these large research programs. There are several theories that seek to explain how poverty experienced during childhood influences future outcomes.
Education, for example, has been found to play a significant mediating role as a transmission mechanism for intergenerational poverty, with New Zealand research suggesting “just under half of intergenerational income persistence was attributable to the length of time spent in the education system.” But it doesn’t make much sense to talk of education “causing” future income for example; there needs to be a theory that can be empirically tested and based on the actual actions of the people involved to link the two concepts. In this example, education could improve knowledge and skills, it could signal competency and reliability to would-be employers and so on. Without a plausible theory a causal link cannot be made.
Three dominant theories for intergenerational poverty transmission
When it comes to intergenerational poverty transmission—that is, poverty in one generation causing poverty in the next—economists, sociologists, and developmental psychologists emphasise different pathways. In the main, there are three dominant theories for how poverty is transmitted across generations:
- Material/resources and investment: A lack of resources—both time and money—constrains parents from investing in their children by providing everything from more nutritious food, to better housing/neighbourhood and more learning opportunities.
- Psycho-social/family and environmental stress: Stress resulting from a constant struggle to pay bills and put bread on the table, combined with the whole host of life shocks that are more common in poor families, takes a physical and mental toll on parents, and subsequently, their children’s development.
- Cultural/Culture of poverty: Norms and behaviours like poor self-control and a lack of the ability to delay gratification along with feelings of hopelessness are transmitted from generation to generation, resulting in adverse outcomes.
The evidence supporting these theories, like in other sections, is mixed and complex. The OECD finds more evidence to support the theory that resources and investment have a significant effect on children’s outcomes rather than the theory of parental stress. Resources and investment also tend to be more strongly associated with children’s cognitive ability, while parental stress was more strongly linked to children’s behavioural problems. While the literature is clear that there is a solid link between resources available in a family and the amount of investment in the child, it is not so clear on the extent of the independent effect of parental income on future outcomes as we’ve just seen. Nobel Laureate economist James Heckman found that when it comes to children’s development, the “causal evidence of an importance [sic] role for credit constraints is weak… Parenting matters much more than parental income.”
Cultural explanations are more difficult to examine than investment or stress pathways, but the evidence does suggest that aspirations, attitudes and values are passed, to some extent, from generation to generation. This is evident in research that suggested that worklessness is associated with poor educational outcomes for children, even when parents’ income and educational level is controlled for, potentially as a result of “role-modeling.” New Zealand evidence suggests that a “socialisation process” works through “exposure to parental role models, the development of life course expectations and aspiration which lead[s] to an intergenerational transmission of economic advantage and disadvantage.”
There is no single pathway through which income affects outcomes. Plausible evidence supports the conclusions that to some extent all three pathways contribute, that there is significant interaction between them and that different mediating variables are at play for different outcomes. Investment-based explanations appear to explain the overall relationship better than stress-based explanations; cultural explanations may surpass both once research methods mature. Again, more research is needed to make more definitive claims on the relative strength and nature of the causal chains linking childhood poverty to future poverty.
This is an extract from Kieran’s research series “The Heart of Poverty | Uncovering Pathways into and out of Disadvantage in New Zealand” Discussion Paper. (Released 2016)
 Glen Elder Jr., “Time, human agency, and social change: Perspectives on the life course.” Social psychology quarterly (1994): 4-15.
 Glen Elder Jr., “Time, human agency, and social change: Perspectives on the life course;” Timothy Daaleman and Glen Elder Jr., “Family medicine and the life course paradigm,” The Journal of the American Board of Family Medicine 20, no. 1 (2007): 87.
 Anna Christina d’Addio, Intergenerational transmission of disadvantage (OECD, 2007), 11. Empirical evidence supports this claim, citing research that suggests that people’s responsibilities for both their parents and their children will constrain and influence them when making decisions such as moving home. Adrian Bailey, Megan Blake and Thomas Cooke, “Migration, care, and the linked lives of dual-earner households.” Environment and Planning A 36, no. 9 (2004): 1617-1632. Parent’s decisions are, more often than not, made in the best interests of the children For more parent’s decisions and core values, see Superu, Families and Whanāu Status Report (2015), 22.
 d’Addio, Intergenerational transmission of disadvantage, 4.
 d’Addio, Intergenerational transmission of disadvantage, 68. On the influence of genetics, research suggests that the earnings of identical twins are significantly more similar than those of fraternal twins, suggesting a large role for genetics as a transmission mechanism. The role played by inheritance of IQ in particular appears to be less influential, however. Samual Bowles and Herbert Gintis, “The inheritance of inequality,” The Journal of Economic Perspectives 16, no. 3 (2002): 3-30.
 On the different types of capital, see Pierre Bourdieu, “The forms of capital” Cultural theory: An anthology (2011): 81-93. The literature on assets, resources and capitals is complex and contested. For an analysis of this see Mike Savage, Alan Warde and Fiona Devine. “Capitals, assets, and resources: some critical issues,” British Journal of Sociology 56 no.1 (2005): 31–47. For a critical perspective of Bourdieu’s Cultural Capital, see John H. Goldthorpe, “Cultural Capital: Some Critical Observations,” Sociologica 1, no. 2 (2007).
 For a differing perspective on Social Capital based on trust and reciprocity, see Robert D. Putnam, “Bowling alone: America’s declining social capital,” Journal of democracy 6, no. 1 (1995): 65-78.
 There is a significant and technical literature on Intergenerational income mobility. Definitional and measurement issues are important but not the focus of this paper. For overviews of the literature, see d’Addio, Intergenerational transmission of disadvantage and. Miles Corak, Do Poor Children Become Poor Adults? Lessons from a Cross Country Comparison of Generational Earnings Mobility (2006).
 For a discussion on the relationship between intergenerational mobility, equality of opportunity and how differences in circumstances and personal choices affect them, see Miles Corak, “Income inequality, equality of opportunity, and intergenerational mobility,” The Journal of Economic Perspectives 27, no. 3 (2013): 79-102. For research that controlled for relevant factors and found that there was a significant relationship, see Paolo Brunori, Paolo, Francisco Ferreira, and Vito Peragine, Inequality of Opportunity, Income Inequality, and Economic Mobility: Some International Comparisons (Palgrave Macmillan, 2013). For more on the relationship between equality of opportunity and intergenerational earnings elasticity, see d’Addio, Intergenerational transmission of disadvantage, 13 and Mitnik et al., New Estimates of Intergenerational Mobility Using Administrative Data (2015) 4.
 OECD (2008) Growing Unequal, 204. Many are concerned about the relationship between intergenerational mobility and income inequality, as higher income inequality points toward fewer opportunities for the disadvantaged. Brunori, Ferreira, and Peragine, Inequality of Opportunity, Income Inequality, and Economic Mobility, 17. See also Jenkins, Changing Fortunes, 119-120 for arguments about mobility and the public interest.
 See discussion in Sandra Black and Paul Devereux, Recent developments in intergenerational mobility, (2010) 3-4. For an argument on “why a regime of ‘perfect mobility’ is not an appropriate benchmark for evaluating the extent to which a society offers its members social justice or equality of opportunity,” See Adam Swift, “Would perfect mobility be perfect?” European Sociological Review 20, no. 1 (2004): 1-11.
 d’Addio, Intergenerational transmission of disadvantage), 11. See also, Joseph Fishkin, Bottlenecks: A new theory of equal opportunity, (OUP, 2014) for an extended discussion on the limitations of equality of opportunity.
 Gary Solon, “Intergenerational mobility in the labor market,” in David Card and Orley Ashenfelter eds., Handbook of Labor Economics Vol. 3 (1999): 1761-1800.
 Most studies study the relationship between the incomes of fathers and their sons.
 Gibbons, Income and occupational intergenerational mobility in New Zealand. Working Paper No. 10/06. (New Zealand Treasury, 2010), 10, 41. Gibbons found the IGE for New Zealand to be 0.26, similar to Corak’s figure. Caution is required with this finding using the Dunedin data, as the cohort at age 32 when this research was undertaken had not yet reached their peak earning years (late thirties-early forties)—many raising families. Dunedin also has fewer Māori and Pasifika people, so the results are not representative of ethnic diversity.
 OECD Economic Surveys, NZ (2015), 121-2. Corak 2013 (see OECD source). See also, Gibbons (2010), 41
 Gibbons, Income and occupational intergenerational mobility in New Zealand, 41.
 OECD (2015), 121. This is based on a correlation between income inequality and intergenerational mobility.
 Markus Jantti et al., American exceptionalism in a new light: A comparison of intergenerational earnings mobility in the Nordic countries, the United Kingdom and the United States (2006). d’Addio, Intergenerational transmission of disadvantage 37-39; Bernt Bratsberg et al. “Nonlinearities in Intergenerational Earnings Mobility: Consequences for Cross-Country Comparisons,” The Economic Journal 117, no. 519 (2007). See also OECD, Growing unequal.
 d’Addio, Intergenerational transmission of disadvantage 38-9. d’Addio cites several international studies that provide evidence of this intergenerational persistence of poverty. See also Stephen Gibbons and Jo Blanden, The persistence of poverty across generations: A view from two British cohorts (JRF, 2006).
 For recent findings from the US, see Mitnik et al., New Estimates of Intergenerational Mobility Using Administrative Data, 4, 71.
 UK Department of Work and Pensions, An evidence review of the drivers of child poverty for families in poverty now and for poor children growing up to be poor adults.
 EAG, Working Paper no.2: Life course Effects on Childhood Poverty, 8.
 Chapple and Richardson, Doing better for children, 168.
 Sheree J. Gibb, David M. Fergusson and L. John Horwood. “Childhood family income and life outcomes in adulthood: findings from a 30-year longitudinal study in New Zealand,” Social Science & Medicine 74, no. 12 (2012): 1979-1986.
 Mayer, The influence of parental income on children’s outcomes, 68.
 Gordon B. Dahl and Lance Lochner, The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit (2010), 23.
 Matt Barnes, Anne Conolly and Wojtek Tomaszewski, The circumstances of persistently poor families with children: Evidence from the Families and Children Study (FACS) (Department of Work and Pensions, 2008) cited in UK Department of Work and Pensions, An evidence review of the drivers of child poverty for families in poverty now and for poor children growing up to be poor adults, 103.
 Matt Barnes, Anne Conolly and Wojtek Tomaszewski, The circumstances of persistently poor families with children.
 Chapple and Richardson, Doing better for children, 168, citing Robert Haveman and Barbara Wolfe, “The determinants of children’s attainments: A review of methods and findings.” Journal of economic literature 33, no. 4 (1995): 1829-1878; Jeanne Brooks-Gunn and Greg J. Duncan. “The effects of poverty on children,” The future of children (1997): 55-71; Mayer, The influence of parental income on children’s outcomes; Stephen P. Jenkins and Christian Schluter, The effect of family income during childhood on later-life attainment: evidence from Germany, (2002) and Laura Blow. et al., Parental Background and Child Outcomes: How Much Does Money Matter and What Else Matters? (2005).
 Sandra Black and Paul Devereux note that background factors tend to contribute more to the variance in intergenerational mobility in the US than in Nordic countries. Recent developments in intergenerational mobility, 70.
 Greg J. Duncan, Katherine Magnuson and Elizabeth Votruba-Drzal, “Boosting Family Income to Promote Child Development,” The Future of Children, Vol. 24, No. 1 (2014) 99-120; Pamela Morris, Greg J. Duncan and Christopher Rodrigues, “Does money really matter? Estimating impacts of family income on children’s achievement with data from random-assignment experiments,” (2004); Greg J. Duncan, Ariel Kalil and Kathleen M. Ziol-Guest, “Early childhood poverty and adult achievement, employment and health,” Family Matters 2013 No. 93 (2013); Duncan and Magnuson, “The importance of poverty early in childhood.” Boston and Chapple, Child Poverty in New Zealand show that early years are generally more important than teenage years.
 Katrine V. Løken, Magne Mogstad, and Matthew Wiswall. “What linear estimators miss: The effects of family income on child outcomes.” American Economic Journal: Applied Economics 4, no. 2 (2012): 1-35.
 Boston and Chapple, Child Poverty in New Zealand, 49.
 Joseph M. Boden, David M. Fergusson and L. John Horwood. “Pathways to economic outcomes at age 30: Income and living standards in a New Zealand birth cohort,” New Zealand Sociology 28, no. 3 (2013).
 The Growing Up in New Zealand longitudinal survey administered by the University of Auckland in partnership with Superu will, when the cohort members get older, provide a rich and valuable source of data for future work in this area to complement the Christchurch and Dunedin studies.
 Gibb, Fergusson and Horwood, “Childhood family income and life outcomes in adulthood.”
 Gibb, Fergusson and Horwood, “Childhood family income and life outcomes in adulthood.”
 David M. Fergusson, L. John Horwood and Sheree J. Gibb, “Childhood family income and later outcomes: results of a 30 year longitudinal study,” Children, No.79 (Office of the Children’s Commissioner, 2011), 26.
 Figures derived by this method are indicative and should be compared with the unadjusted associations as the covariates may influence one another. See Gibb, Fergusson and Horwood, “Childhood family income and life outcomes in adulthood,” 1983.
 Gibb, Fergusson and Horwood, “Childhood family income and life outcomes in adulthood,” 1984.
 Gibbons, Income and occupational intergenerational mobility in New Zealand, 41.
 Boston and Chapple, Child Poverty in New Zealand, 51.
 Richie Poulton et al., “Association between children’s experience of socioeconomic disadvantage and adult health: a life-course study,” The lancet 360, no. 9346 (2002): 1640-1645.
 For more on theories, see Shively, The craft of political research,15-17. For a critical realist perspective, see Smith, What is a person? 11.
 Gibbons, Income and occupational intergenerational mobility in New Zealand. The author warns that this figure may be diminished if further individual and family background factors were added to the model.
 Goldthorpe (2001), 4. See also Smith, What is a person? 299-304.
 For an extended discussion on these three perspectives, Duncan, Magnuson and Votruba-Drzal, “Boosting Family Income to Promote Child Development,” 102-7. See also Tim Maloney, “Are the outcomes of young adults linked to the family income experienced in childhood?” Social Policy Journal of New Zealand (2004): 58 and Gibb, Fergusson and Horwood, “Childhood family income and life outcomes in adulthood,” 1985.
 See Anandi Mani et al., “Poverty impedes cognitive function,” science 341, no. 6149 (2013): 976-980 for a comprehensive theory and related evidence about how a lack of resources can cause mental and physical stress and, subsequently, poor outcomes.
 OECD (2009), 170. See also Beck Taylor, Eric Dearing and Kathleen McCartney, “Incomes and outcomes in early childhood,” Journal of Human Resources 39, no. 4 (2004): 980-1007; Lawrence Berger, Christina Paxman and Jane Woldfogel, Income and Child Development: Center for Research on Child Wellbeing Working Paper No. 05-16-FF (2005).
 James Heckman and Stefano Mosso, The economics of human development and social mobility (National Bureau of Economic Research, 2014), 31.
 James Heckman, “Skills and Scaffolding,” accessed 29 August 2015, http://www.brookings.edu/research/papers/2014/10/22-skills-scaffolding-heckman.
 d’Addio, Intergenerational transmission of disadvantage, 4.
 Matt Barnes et al., Intergenerational transmission of worklessness: Evidence from the Millennium Cohort and the Longitudinal Study of Young People In England (2012) cited in UK Department of Work and Pensions, An evidence review of the drivers of child poverty for families in poverty now and for poor children growing up to be poor adults, 59.
 Boden, Fergusson and Horwood, “Pathways to economic outcomes at age 30: Income and living standards in a New Zealand birth cohort,” 126-7.
 Jean Yeung, Miriam R. Linver and Jeanne Brooks–Gunn, “How money matters for young children’s development: Parental investment and family processes,” Child development 73, no. 6 (2002): 1874-6. Walking the line between including as few variables as possible in models to make sense of the findings while at the same time including enough to reflect reality well and to make accurate predictions where possible is difficult—a process characterised as a quest for “sufficient complexity.” Smith, What is a person, 11. When it comes to theories about causes of poverty, simplistic, one-dimensional explanations will not be predictive or broadly applicable, leaving them of little use. An overly elaborate explanation will be just as worthless, capturing everything and explaining nothing.