| Sumario: | Previous studies reported negative effects of financial deprivation on child development during early childhood. As already shown, child development, in particular language development, is associated with family background, e.g., educational level. However, less is known about the impact of (restricted) financial resources on early language skills. Therefore, the present study investigates whether family income, measured as a metric variable by net equivalence income, and poverty, operationalized as income groups based on official income thresholds, impact vocabulary and grammar skills of 2-year-old children even when taking the educational level of the mother as well as aspects of the home-learning environment (joint picture book reading) and other relevant variables into account. Drawing on a German sample of N = 1782, we found that especially poverty is significantly associated with early language skills over and above maternal education and joint picture book reading. Hence, our results indicate the relevance to consider the effect of (restricted) financial resources and especially poverty on child development during early childhood additionally to other indicators of social background. Highlights: Children that experienced poverty during the first year show comparatively lower early language skills even when maternal education and joint picture book reading are considered. Using income groups defined by official income thresholds allow to more directly analyse the impact of poverty on children. Especially poverty is found to affect child development even in a rich country with a strong social system such as Germany.
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