Limited income is highly correlated with child maltreatment and child protective services (CPS) involvement. Yet, research has made little progress toward understanding the nature of these associations and whether they are causal. Income and child maltreatment may be causally linked in several ways. First, limited income may directly restrict a parent’s ability to meet a child’s basic needs. Second, it may be indirectly linked to child maltreatment through mechanisms such as parental stress and depression. Third, low-income parents may invest less in children than higher-income parents because they expect lesser returns to such investments. Fourth, low-income parents may have fewer disciplinary or behavioral control options than higher-income parents and thus rely more heavily on punitive discipline. However, it is also possible that correlations between income and child maltreatment are not causal, but rather reflect social selection such that they are driven by other factors that influence both income and whether a parent is likely to engage in child maltreatment. Such factors may include limited education, mental health problems, and substance abuse. A related concern, at least when considering CPS involvement (as opposed to parental behaviors per se), is that low-income families may simply be more likely to become involved with CPS—for example, as a result of higher levels of exposure to potential reporters or due to disparities by socioeconomic status in reporting—even if they are no more likely than their higher income counterparts to maltreat their children. Whether income and maltreatment are causally linked has important implications for child maltreatment prevention programs and policies.

This study uses an instrumental variables strategy to estimate the effect of income on both CPS involvement and a range of parenting behaviors that proxy for child maltreatment risk in the areas of physical abuse, physical neglect, lack of supervision, and emotional abuse. Following work by Dahl and Lochner (2012), we take advantage of differences between states and over time in the generosity of the total state and federal Earned Income Tax Credit to identify exogenous variation in family income. Our individual-level data are drawn from the Fragile Families and Child Wellbeing Study, a longitudinal birth-cohort of relatively disadvantaged urban children who have been followed from birth to age nine. Preliminary results suggest that an exogenous increase in income is associated with relatively large reductions in the probability of both CPS involvement and risk for physical child neglect; we find less consistent evidence with regard to the other maltreatment risk proxies. These findings suggest that there is a causal link between income and CPS involvement, which most likely reflects a causal link between income and physical neglect—the most common form of maltreatment and the form of maltreatment most strongly correlated with poverty. Given that child neglect and CPS involvement impose tremendous economic costs to both victims and society as a whole, this research suggests that economic support policies may be an efficient prevention strategy for physical neglect, and also that child welfare interventions may be well served by addressing families’ economic issues.