A substantial body of research demonstrates a robust link between family income and children's development, particularly in brain structure and mental health. Children from lower-income families consistently exhibit smaller hippocampal volumes and higher rates of internalizing and externalizing psychopathology compared to their higher-income peers. This relationship is likely multifaceted, stemming from the various environmental challenges associated with poverty. Financial hardship often limits access to essential resources, leading to increased exposure to stressors such as neighborhood violence, food insecurity, and unpredictable environments. These stressors can negatively impact brain development and mental well-being. However, the strength of the association between low income and adverse outcomes may be influenced by broader societal factors, including cost of living and the generosity of state-level anti-poverty programs. This study leverages the nationally representative Adolescent Brain and Cognitive Development (ABCD) study to investigate whether state-level macroeconomic factors moderate the association of low family income with hippocampal volume and mental health in early adolescence. Understanding this complex interplay is crucial for developing effective interventions to mitigate the impact of poverty on child development.

Previous research has established a strong correlation between family income and children's brain development, particularly concerning hippocampal volume. Studies consistently demonstrate smaller hippocampal volumes in children from lower-income families. This finding aligns with the understanding that chronic stress, more prevalent in low-income environments, negatively impacts hippocampal neurons. This neural impact, in turn, may contribute to the observed disparities in later-life outcomes such as educational attainment, mental health, and economic stability. However, the influence of broader socioeconomic factors on this relationship remains under-investigated. While the federal poverty line is used to determine eligibility for support programs, the cost of living varies significantly across the United States. This disparity means that the effective value of a dollar differs greatly depending on location, leading to potentially larger financial strain for low-income families in higher cost-of-living areas. Conversely, the presence of a robust social safety net, particularly generous anti-poverty programs, could potentially mitigate the negative impact of low income on child development. The availability and generosity of such programs like the Earned Income Tax Credit (EITC), Temporary Assistance for Needy Families (TANF), and Medicaid expansion vary significantly across US states, providing an opportunity to study their moderating effect.

This study utilized data from the Adolescent Brain and Cognitive Development (ABCD) study, a large, multisite study of children and adolescents in the United States. The sample included 10,633 9-11 year olds from 21 sites across 17 states. Family income was measured using parent-reported total household income, adjusted for household size and compared to the 2017 poverty thresholds. Hippocampal volume was assessed via structural MRI scans, following rigorous quality control procedures to exclude data with significant artifacts. Mental health was measured using parent-reported scores on the Child Behavior Checklist (CBCL), focusing on internalizing and externalizing problems. State-level macroeconomic factors included cost of living (Regional Price Parity – RPP), and the generosity of state anti-poverty programs: average monthly cash benefits (mean of EITC and TANF), and Medicaid expansion status. Statistical analyses employed linear mixed-effects models, incorporating random intercepts for study sites to account for clustering. Three-way interaction terms were included to assess the moderating effects of cost of living and the generosity of anti-poverty programs on the association between family income and hippocampal volume and mental health outcomes. Sensitivity analyses controlled for various state-level social, economic, and political factors to rule out alternative explanations.

The results replicated previous findings showing a positive association between family income and hippocampal volume, and a negative association between family income and internalizing psychopathology. Importantly, the study revealed significant three-way interactions between family income, cost of living, and the generosity of state-level anti-poverty programs, specifically cash benefits (EITC and TANF) and Medicaid expansion, in relation to both hippocampal volume and internalizing problems. In states with high costs of living, more generous cash assistance programs were associated with a 34% reduction in socioeconomic disparities in hippocampal volume. Similarly, in high cost of living states, more generous cash benefits reduced income-related disparities in internalizing problems by approximately 48%. These effects were most prominent among children from lower-income families, those likely to be eligible for such benefits. Medicaid expansion showed a similar pattern of interaction, whereby in states with a high cost of living, Medicaid expansion was associated with substantially reduced income disparities in hippocampal volume and internalizing problems. The interactions were robust to controls for a wide range of state-level social, economic, and political characteristics, ruling out many alternative explanations. No such three-way interaction was observed for externalizing problems.

The findings of this study underscore the critical role of state-level macroeconomic factors in moderating the association between low income and children's neurodevelopmental and mental health outcomes. The significant three-way interactions highlight the crucial interplay between individual-level factors (family income), state-level economic indicators (cost of living), and the presence of robust social safety nets (generous anti-poverty programs). The results suggest that in high-cost-of-living areas, the negative impacts of low income on brain development and mental health can be partially offset by more generous state-level anti-poverty programs. This suggests that policies aimed at alleviating financial strain, particularly through cash assistance and expanded healthcare access, may be effective in reducing socioeconomic health disparities in children. The study's findings have implications for policy-makers and researchers alike, emphasizing the need for comprehensive interventions that consider both individual circumstances and broader macroeconomic contexts.

This study demonstrates that state-level macroeconomic factors, specifically cost of living and the generosity of anti-poverty programs, significantly moderate the association between family income and children's hippocampal volume and internalizing problems. The findings highlight the importance of considering broader societal contexts when studying socioeconomic disparities in child development. Future research should investigate the underlying mechanisms through which these macroeconomic factors exert their influence, and explore the long-term consequences of these developmental disparities for children’s overall well-being. Longitudinal studies are needed to examine the sustained impacts of these programs and contextual factors.

The study's cross-sectional design limits causal inferences, although the observed interactions are consistent with causal evidence from other studies. The limited number of states included in the ABCD study, while geographically diverse, may restrict the generalizability of the findings. Additionally, the use of state-level cost of living may not fully capture the variability within states. Finally, the study focuses on children aged 9-11 years old, and therefore the generalizability to other age groups remains to be investigated.