Growing up poor; poverty packs several punches for child development.

You might call them the "baby bust" generation. In 1991, the U.S. Census Bureau reported that 21.8 percent of the nation's children -- approximately 14.3 million youngsters -- lived in families with annual incomes below federal poverty thresholds. To qualify officially as poor that year, a family of four could have brought in no more than $13,924.

Census data also show that the U.S. child poverty rate has risen by one-third over the past 20 years. By the late 1980s, it hovered at two to four times the rates of child poverty in Canada and Western Europe. In sheer numbers, white children suffer the most poverty, but the greatest proportion of poverty occurs among black children.

Despite continued massive counting of the young and the poor, researchers know relatively little about the ways in which economic deprivation influences children's intellectual and emotional development. A series of new studies, published in the April CHILD DEVELOPMENT, attempts to burrow beneath the statistics and extract clues to how poverty can drag a child down or, in some inspiring cases, serve as a launching pad to a successful life.

The findings offer more reason for concern than optimism. By age 5, children in persistently or occasionally poor families have markedly lower IQs and display more fearfulness, anxiety, and unhappiness than never-poor youngsters, report Greg J. Duncan, a sociologist at the University of Michigan in Ann Arbor, and his coworkers. Unremitting poverty, most commonly observed in black families, shows a particularly powerful link to these factors, the researchers assert. In fact, they suggest, childhood stints in extremely poor families and neighborhoods may largely account for lags in black youngsters' IQ scores, compared to those of their white counter-parts.

"There is little doubt that poverty is scarring the development of our nation's children," Duncan and his associates conclude.

Their findings come from a longitudinal study of 895 low-birthweight infants who entered a health and child-care program run at eight medical centers in different parts of the country. Black younsters made up more than half the sample, followed in number by white and Hispanic children.

Family income predicted the IQs of 5-year-olds far more accurately than the measures of socioeconomic status usually employed in poverty research, such as ethnicity, mother's educational background, and number of parents in the household, Duncan's group holds.

Children living in poor neighborhoods also scored lower on IQ tests than did those with more affluent neighbors. Youngsters' behavior problems cited by their mothers, such as destroying belongings and throwing frequent tantrums, jumped considerably in poor families and neighborhoods.

Given the dangerous realities of merely getting to school or playing outside in impoverished city enclaves, many poor mothers may promote aggressive behavior in their children as a survival tactic, the researchers suggest. Moreover, most young participants had entered some form of day care by age 5 and may already have been pressured to fight and intimidate others by their peers, whose influence grows rapidly throughout childhood, they add.

The power of peers may partly feed off the deteriorating family life that often accompanies long-standing poverty, according to Patricia Garrett, a psychologist at the University of North Carolina at Chapel Hill, and her colleagues. Expressions of parental warmth, provision of safe surroundings, and exposure to a variety of learning and language experiences shrink markedly over time for children in families that cannot break out of poverty, they argue.

These same aspects of home life improve most dramatically for children born into the poorest families who later see household income rise, Garrett's group notes. When poor families climb the economic ladder, most parents use the extra dollars to enhance their children's lives, they find.

The researchers analyzed data for 1,887 children who participated in a national survey. Interviews with parents and observations of their kids at home were conducted in 1986, when the youngsters ranged in age from newborn to 4 years old, and again in 1988 and 1990.

Investigations based on official definitions of poverty offer only a limited perspective on children's reactions to financial hardship. A child may more easily deal with a bare minimum family income if, for example, parents talk openly about their economic worries, points out Vonnie C. McLoyd of the University of Michigan. A child consistently denied desired objects and experiences because the family lacks money may view poverty most harshly, she adds.

In a study of 241 single black mothers and their seventh- or eighth-grade children, McLoyd and her associates find substantially more symptoms of depression in unemployed women, with the most depressed mothers citing the greatest reliance on harsh forms of child punishment, such as yelling, hitting, and threats of violence.

Teenagers exposed to the most punishment by their mothers noted the most distress and depression. In addition, adolescents who perceived their families as the most economically burdened reported greater anxiety and lower selfesteem.

McLoyd's analysis focused on people inhabiting lower- and working-class neighborhoods of a mid-size city. But economic pressure exerts similar effects on those living in rural areas, according to a project directed by Rand D. Conger, a sociologist at lowa State University in Ames.

Conger's team interviewed 180 boys and 198 girls, as well as their parents, on an annual basis in the seventh, eighth, and ninth grades. Each child lived with two parents either on a farm or in a small town.

On average, the largely white participants fell in the middle to lower range of the middle class, although 42 children lived in families with incomes below the federal poverty line at the start of the study.

In families dealing with constant or accumulating economic pressure, parents reported more depression and marital conflict, and conflicts over money increased between parents and children, Conger and his coworkers found. Financial hardship stoked a wide spectrum of hostile and threatening acts aimed at adolescents by parents, they add.

Teenage boys and girls reacted to economically induced family conflict with comparable amounts of distress, although boys more often got into fights and engaged in criminal acts and girls showed a greater tendency to develop anxiety and depression.

Important aspects of economic hardship often go unexamined, the scientists caution. For example, Conger's study and virtually all others fail to consider ongoing expenses for chronic medical problems that plague some families. And the extent of financial troubles often proves difficult to pin down. In the rural families, Conger's group suspects, many parents may have traded goods and possessions on the side or conducted cash-only businesses that did not show up in their reported incomes.

Despite such uncertainties, unrelenting poverty apparently boosts the likelihood of harsh parental discipline and family conflict -- with long-lasting effects on behavior -- by the time a child reaches preschool, argues Kenneth A. Dodge, a psychologist at Vanderbilt University in Nashville.

Dodge and his colleagues studied 585 urban children whose family income ranged from extremely poor to affluent. The researchers tracked youngsters and their parents from preschool to third grade.

As economic disadvantage increased, parental discipline grew harsher and the home environment deteriorated on all fronts, regardless of whether the family included one or two parents, the investigators assert. Most disruptive and hostile grade-school students, as identified by their teachers, came from these declining conditions, they note.

Again, poverty occurred largely among black participants, but financial hardship fractured families in the same ways across racial groups, Dodge contends.

Although poor children can squeeze precious little optimism out of such data, destitution is not necessarily destiny. A study of 728 black teenagers living in several large cities indicates that, even in cases of dire poverty, youths who get clear family support, feel emotionally secure, and approach school confidently score well on academic achievement tests. James Patrick Connell of Public/Private Ventures, a research firm in Philadelphia, directed this investigation.

Other evidence suggests that emotional and academic resilience in the face of poverty gets a major boost from early entry into preschools that also reach out to parents.

Children in low-income, mainly black families who took part in the Carolina Abecedarian Project, which provided educational day care from infancy to age 5 and in some cases included additional school help up to age 8, showed significant jumps in IQ and academic achievement, compared to kids who did not attend a preschool. These advantages remained stable at age 12, some 4 to 7 years after the project ended, report Frances A. Campbell of the University of North Carolina at Chapel Hill and Craig T. Ramey of the University of Alabama at Birmingham.

Preschool classes operated 8 hours a day, 5 days a week, 50 weeks a year. The program emphasized social, language, and thinking skills. Parents attended voluntary programs on nutrition, child rearing, and toy making. Grade-school interventions focused on individual help from a teacher who addressed learning needs cited by a child's classroom teacher.

Positive effects of the preschool program far outweighed those of extra grade-school instruction, according to Campbell and Ramey.

Researchers also take encouragement from a long-term study of 123 poor black children randomly assigned either to the Perry Preschool in Ypsilanti, Mich., or to a control group that received no preschool services. Perry graduates more often finished high school, found jobs, and avoided going on welfare or getting arrested. The Michigan preschool project consisted of educational classes for children and weekly home visits aimed at involving parents in the school curriculum.

Head Start, which began in 1965, remains the best-known preschool project for poor children. As Head Start approaches funding reauthorization in Congress this year, controversy surrounds the extent to which the program gives children a leg up on learning. In fact, opinions about Head Start's effectiveness have fluctuated greatly since its inception, notes Edward Zigler, a Yale University psychologist who ran the federal program from 1970 to 1972.

Head Start now serves primarily poor children age 3 to 5, most of whom attend half-day sessions for a school year. More than 600,000 youngsters and their families attend these preschools each year. Classes emphasize language and thinking skills, referrals for physical and emotional problems, nutrition education, and social services for children and parents.

Several longitudinal studies indicate that participation in high-quality Head Start classes boosts IQ and academic achievement for several years, after which these advantages fade, Zigler says. However, Head Start graduates show enduring improvement in school attendance and emotional adjustment, and their home situations often improve following parental involvement in preschool classes, he maintains.

"When children leave Head Start, they have better IQ scores and school readiness skills," Zigler contends. "In other words, Head Start does help prepare children for school."

Researchers have yet to initiate a study of the same children over a decade or more that evaluates how wide-ranging Head Start's benefits are and how long they last. And few investigators have tried to determine the effects of other federal and state policies on poor children, McLoyd says.

For instance, she asserts, no one knows whether publicly supported work programs improve the emotional and family lives of formerly unemployed adults, thus indirectly fostering school and social gains in their children. Similarly, it remains unclear whether enlarging family resources through Earned Income Tax Credits or other tax breaks reverberates helpfully through youngsters' lives.

Childhood poverty, it seems, still breeds a wealth of unanswered questions.