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The effects of geographic variations in cost of living and family income on children’s academic achievement and social competence in first grade (mean age = 86.9 months) were examined, mediated through material hardship, parental investments, family stress, and school resources. Using data from the Early Childhood Longitudinal Study–Kindergarten Cohort (N = 17,565), higher cost of living was associated with lower academic achievement. For poor children only, higher cost of living was also detrimental to parental investments and school resources. Parental investments and school resources were more strongly associated with achievement for lower income than higher income children. Results suggest that cost of living intersects with income in meaningful ways for family and child well-being and should be accounted for in the poverty measure.
