Socioeconomic status, neighborhood disadvantage, and poverty-related stress: Prospective effects on psychological syndromes among diverse low-income families Catherine DeCarlo Santiago a, * , Martha E. Wadsworth a , Jessica Stump b a University of Denver, Department of Psychology, 2155 South Race St., Denver, CO 80208, USA b University of Pennsylvania, Department of Psychology, 3720 Walnut St., Philadelphia, PA 19104, USA article info Article history: Received 19 December 2008 Received in revised form 12 July 2009 Accepted 30 October 2009 Available online 5 November 2009 JEL classification: 13 PsycINFo classification: 2910 3210 Keywords: Poverty Stress Neighborhood SES Family Children Adolescents Psychopathology abstract Living with persistent poverty is toxic for one’s psychological health. This study examined SES, income, neighborhood disadvantage, and poverty-related stress as predictors of a wide range of psychological problems including anxiety, depression, aggression, relationship problems, physical problems, and trouble with the law. Longitudinal analyses were con- ducted with a low-income multiethnic sample of 98 families recruited from the greater Denver, CO metropolitan area (300 family members: 136 adults, 82 preadolescents, 82 ado- lescents) using hierarchical linear modeling to predict all eight ASEBA narrow band syn- dromes. Analyses showed that poverty-related stress was directly related to anxious/ depressed symptoms and social problems and interacted with prior symptoms, contribut- ing to worsening symptoms for delinquency, attention problems, somatic complaints, and anxious/depressed symptoms. Hollingshead SES also had direct predictive effects for cer- tain syndromes, though these effects were in the opposite direction predicted. In contrast, lower income-to-needs predicted more problems as expected. Neighborhood disadvantage also predicted psychological syndromes. Developmental differences are discussed. Our data show that parents are not the only family members who are affected by stress from living in poverty. SES, neighborhood disadvantage and poverty-related stress take a toll on children, adolescents, and adults. Ó 2009 Elsevier B.V. All rights reserved. 1. Introduction Living with persistent poverty damages one’s psychological health. Social causation studies show that poverty contrib- utes to the development of a wide range of psychopathology (Miech, Caspi, Moffitt, Wright, & Silva, 1999). Understanding how poverty translates to psychopathology for children and adults is critical for developing effective intervention and advo- cating for sound policy. Socioeconomic status (SES) and low income contribute to negative outcomes by limiting financial resources and opportunities for higher paying employment. In addition, low SES and income are associated with mental health disorders such as depression, because of the stress of living with less money than one needs (Siefert, Bowman, Heflin, Danziger, & Williams, 2000). Living in a poor neighborhood is also a chronic stressor whereby poverty, unemployment and 0167-4870/$ - see front matter Ó 2009 Elsevier B.V. All rights reserved. doi:10.1016/j.joep.2009.10.008 * Corresponding author. Tel.: +1 303 889 9650; fax: +1 303 871 4747. E-mail address: cdecarlo@du.edu (C.D. Santiago). Journal of Economic Psychology 32 (2011) 218–230 Contents lists available at ScienceDirect Journal of Economic Psychology journal homepage: www.elsevier.com/locate/joep