Using unique data from four developing countries, this paper explores the relationship between material poverty and the psychosocial competencies of children. Within a cohort of 12-year-olds, we find that measures of self-efficacy, sense of inclusion, self-esteem and educational aspirations all correlate with measures of the material well-being of the family in which they are growing up. In short, material circumstances shape these wider dimensions of child well-being. As other evidence has shown, these measures of psychosocial competencies reflect important life skills that affect them as adults and shape their future socio-economic status. This suggests a mechanism by which poverty may be transmitted across generations. In addition, our evidence shows how a caregiver's education and school participation affects children's psychosocial competencies. This may indicate a possible means of overcoming such transmission of poverty over time.

Keywords:  poverty, psychosocial competencies, cohort study

The final published version of the article is available on the journal website.