How Economic Downturns Affect Children's Development: An Interdisciplinary Perspective on Pathways of Influence

To understand how economic downturns affect children's development, scholars have concentrated on how parents' loss of a job affects children's well-being, but have largely ignored the potential effects of downturns on children whose parents remain employed. In this article, we review research across disciplines to demonstrate that economic downturns should be conceptualized as a community-level event that affects all children in a community, not just those whose parents have lost jobs. We focus on three mechanisms linking downturns to children's developmental outcomes: structural changes to communities, the economic and psychological effects on individuals who are continuously employed, and the strain of job loss on social networks. We conclude by discussing ongoing research and looking at implications for public policy.