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If we could take a close look on Horrid Henry birthday story, you could understand the financial situation of the family. It seems that family income has an effective effect on child development. Even casual observers note that the children of affluent parents are more likely to succeed in life than the children of poor parents. For instance, compared to more affluent children, poor children:score low on tests of cognitive skill in early childhood, have more behaviour problems in school and at home; are more likely to drop out of high school, and those who do finish high school are less likely to enrol in or graduate course, are more likely to have children at young age; are more likely to be poor themselves when they adults. The most intuitive explanation for this difference is that rich parents can spend more than poor parents on their children and that these “investments” lead to better outcomes for their children. This intuition fit the interests of policy makers looking for simple solutions to alleviate poverty and its apparent by-products: If poor children fail because their parents cannot make sufficient monetary investments in their future, then government can improve the life chances of poor children by providing families with the means to make the investments or by providing the investments directly in the form of schooling, health care, and other human capital in- puts . However, poor parent’s inability to invest in their children is not the only possible explanation for the relationship between family poverty and child well-being. Other parental characteristics associated with their poverty have been implicated, especially parental education and marital status. Environment characteristics and parental behaviour or culture have also been implicated. These explanations argue for policies other than income support to improve children’s well-being as adults.


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