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Poverty affects children's educational success through family processes and neighborhood factors. Within the family, the type of talk children hear at home, their educationally relevant experiences, and the beliefs parents have about children's development as well as the nature of interactions predict educational achievement. How families relate to children's teachers also matters, as do neighborhood factors. In 2009, more than one in five children in the United States lived in families whose incomes fell below the federal poverty line ($21,756 for a family of four). The number of children living in poverty is higher than it has been in at least the past decade and higher than it is for other industrialized nations. Children growing up in families whose incomes fall at or below the poverty line are more likely to come from African American or Hispanic backgrounds, live in single-mother families, be under 6 years old, and experience educational difficulties.

This entry reviews two complementary theoretical explanations, the family process model and the ecological model, and discusses how aspects of each model mediate the relation between poverty and children's academic outcomes. The family process model shows how aspects of children's home experiences, including the type of talk directed at them as well as parents' beliefs and practices, serve as mediators. The ecological model shows how relations between children's parents and their school, as well as neighborhood factors, serve as mediators.

A large percentage of children growing up in poor or low-income families have difficulties in school. For example, results from the 2009 National Assessment of Educational Progress show that 49% of fourth graders who received low-cost or free school lunches (indicating a family income of up to 130% of the poverty level), compared to 20% who did not, received below-basic-level reading scores on a standardized national assessment. Children from poor or low-income families receive lower scores on various readiness or academic measures from the time they enter kindergarten. These initial differences in scores increase as children proceed through school, with children from poor families earning lower grades, being more likely to receive special education services and to be retained in grade, and being less likely to graduate from high school or attend college.

It is important to keep in mind, however, that what appear to be the effects of poverty may be effects of factors related to poverty. Children growing up in low-income or poor families often experience additional risk factors, including growing up in single-parent homes, having teenage parents or parents with psychiatric disorders, and being one of many children living at home. In addition, family income and parents' educational level are highly correlated. What may appear to be the impact of poverty on a child may reflect a parent's limited education, which, in turn, may limit a parent's knowledge of how to be involved in his or her child's schooling. Poverty or low income also may be associated with more limited social capital, that is, access to connections with others who are relevant for a child's academic and later vocational success.

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