The importance of family income in the formation and evolution of non-cognitive skills in childhood

•Track a representative cohort of US school children from Kindergarten to 5th grade.•We examine the family income gradient for non-cognitive skills as children age.•The gradient is large at school entry across multiple domains and increases.•Results are a step toward understanding whether policies may reduce gaps.•Policies may focus on early life, as large gaps are present at school entry. Little is known about the relationship between family income and children's non-cognitive (or socio-emotional) skill formation. This is an important gap, as these skills have been hypothesized to be a critical link between early outcomes and adult socioeconomic status. This paper presents new evidence of the importance of family income in the formation and evolution of children's non-cognitive skills using a recent US panel dataset that tracks children between grades K-5. Findings suggest an important divergence in non-cognitive skills based on family income that accumulates over time and does not seem to be explained by children's health status differences.