Income instability is an important and understudied dimension of the established empirical relation between family income and children's healthy development. Frequent fluctuations in income may influence daily processes and routines of family life, but the nature of such effects also may vary by specific patterns of income instability, parents' responses, and children's characteristics. In this article, we review existing theory and research on income, family functioning, and child development to better understand the potential implications of income instability for children's development. We also integrate theoretical insights from developmental psychology, economics, sociology, and social neuroscience to propose a set of testable hypotheses for social science investigations on this topic.

Economic life for most American households is quite dynamic. Such income instability is an understudied aspect of households' economic contexts that may have distinct consequences for children. We examine the empirical relationship between household income instability, as measured by intrayear income change, and adolescent school behavior outcomes using a nationally representative sample of households with adolescents from the Survey of Income and Program Participation 2004 panel. We find an unfavorable relationship between income instability and adolescent school behaviors after controlling for income level and a large set of child and family characteristics. Income instability is associated with a lower likelihood of adolescents being highly engaged in school across the income spectrum and predicts adolescent expulsions and suspensions, particularly among low-income, older, and racial minority adolescents.

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Conventional methods for mediation analysis generate biased results when the mediator-outcome relationship depends on the treatment condition. This article shows how the ratio-of-mediator-probability weighting (RMPW) method can be used to decompose total effects into natural direct and indirect effects in the presence of treatment-by-mediator interactions. The indirect effect can be further decomposed into a pure indirect effect and a natural treatment-bymediator interaction effect. Similar to other techniques for causal mediation analysis, RMPW generates causally valid results when the sequential ignorability assumptions hold. Yet unlike the model-based alternatives, including path analysis, structural equation modeling, and their latest extensions, RMPW requires relatively few assumptions about the distribution of the outcome, the distribution of the mediator, and the functional form of the outcome model. Correct specification of the propensity score models for the mediator remains crucial when parametric RMPW is applied. This article gives an intuitive explanation of the RMPW rationale, a mathematical proof, and simulation results for the parametric and nonparametric RMPW procedures. We apply the technique to identifying whether employment mediated the relationship between an experimental welfare-to-work program and maternal depression. A detailed delineation of the analytic procedures is accompanied by online Stata code as well as a stand-alone RMPW software program to facilitate users' analytic decision making.

This study examines whether maternal employment affects the health status of low-income, elementary-school-aged children using instrumental variables estimation and experimental data from a welfare-to-work program implemented in the early 1990s. Mother's report of child health status is predicted as a function of exogenous variation in maternal employment associated with random assignment to the program group. IV estimates show a modest adverse effect of maternal employment on children's health. Making use of data from another welfare-to-work program we propose that any adverse effect on child health may be tempered by increased family income and access to public health insurance coverage, findings with direct relevance to a number of current policy discussions. In a secondary analysis using fixed effects techniques on longitudinal survey data collected in 1998 and 2001, we find a comparable adverse effect of maternal employment on child health that supports the external validity of our primary result.

Growing evidence suggests that child care instability is associated with child behavior problems, but existing studies confound different types of instability; use small, convenience samples; and/or control insufficiently for selection into child care arrangements. This study uses survey and calendar data from the Fragile Families and Child Well-Being Study to estimate the associations between three different types of child care instability—long-term instability, multiplicity, and the use of back-up arrangements—and children’s internalizing, externalizing, and prosocial behaviors at age 3, controlling for a large number of child and family background characteristics. Long-term instability between birth and age 3, as measured in both the survey and calendar data, is associated with higher levels of externalizing behavior problems. Current multiplicity at age 3 (as measured by survey data) is associated with higher levels of both externalizing and internalizing behavior problems, but stable multiplicity over time (as measured using calendar data) is not. Finally, the use of back-up arrangements at age 3 is associated with higher levels of internalizing behaviors. We find no consistent differences in these results by the timing of instability, child gender, family income, or type of care.

This special issue of Social Service Review presents original research on the determinants and consequences of economic instability, with a focus on the interplay between instability and social policy. To frame that discussion, we define economic instability as repeated changes in employment, income, or financial well-being over time, particularly changes that are not intentional, predictable, or part of upward mobility. We also present a conceptual framework for how instability occurs in multiple domains of family life and how social policy has the potential to both buffer and exacerbate instability in employment and family structure. The articles in the volume engage many of these domains, including employment and program instability, and multiple areas of social policy, including workplace regulations and childcare subsidies. They also point to paths for future research, which we summarize in the final section of this introduction. Across many areas of life, instability marks the day-today reality of low-income Americans. Unpredictable employment and work schedules (Hollister 2011; Hollister and Smith 2014; Lambert, Fugiel, and Henly 2014), fluctuating public benefits (Lambert and Henly 2013; Mills et al. 2014; Ben-Ishai 2015), changes in romantic relationships and household composition (Cherlin 2010), and unwanted housing and neighborhood churning (Desmond, Gershenson, and Kiviat 2015; Desmond and Shollenberger 2015; Desmond 2016) all too commonly mark the lives of poor Americans. Taken together, these sources of economic instability create much greater income variability for low-income families than for their high-income counterparts, and this gap in income variability has grown larger in recent years (Morris et al. 2015). Both the causes of income variability and the fluctuations in resources have been shown to affect material hardship and adult and child outcomes (e.g.