This study examines the role of maternal depressive symptoms and low maternal literacy in predicting outcomes in two generations in families receiving welfare: mothers' employment and children's development. The sample consists of 351 African-American families, each with a preschool-age child, in which the mother had applied for or was receiving welfare. Close to the start of the study, 52.6 percent of the mothers in the sample had scores indicating lower literacy, 39.5 percent reported moderate to high levels of depressive symptoms, and 24.6 percent had a co-occurrence of these. Using continuous scores, in multivariate analyses of variance, neither level of literacy, extent of depressive symptoms, nor the interaction of these, were found to predict two measures of subsequent employment (any employment across the two year follow-up period, and current employment at the time of the follow-up). However, when cut points were used (low literacy; moderate to high depressive symptoms), mothers with low literacy were found less often to be employed approximately two years later. Multivariate analyses of variance examining the set of child outcomes (cognitive school readiness and behavior problems) in light of mothers' depressive symptoms and literacy level found a statistically significant interaction of literacy level and extent of depressive symptoms: children of mothers with more depressive symptoms had less favorable developmental outcomes only in the presence of low maternal literacy. Structural equation models provide evidence that parenting behavior mediates the relationship between the predictor variables and child outcomes, and that the pathways from depressive symptoms through parenting to child outcomes are stronger when maternal depressive symptoms co-occur with low maternal literacy.

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