Family processes affecting the socioemotional functioning of children living in poor families and families experiencing economic decline are reviewed. Black children are of primary interest in the article because they experience disproportionate shares of the burden of poverty and economic loss and are at substantially higher risk than white children of experiencing attendant socioemotional problems. It is argued that (a) poverty and economic loss diminish the capacity for supportive, consistent, and involved parenting and render parents more vulnerable to the debilitating effects of negative life events, (b) a major mediator of the link between economic hardship and parenting behavior is psychological distress deriving from an excess of negative life events, undesirable chronic conditions, and the absence and disruption of marital bonds, (c) economic hardship adversely affects children's socioemotional functioning in part through its impact on the parent's behavior toward the child, and (d) father‐child relations under conditions of economic hardship depend on the quality of relations between the mother and father. The extent to which psychological distress is a source of race differences in parenting behavior is considered. Finally, attention is given to the mechanisms by which parents' social networks reduce emotional strain, lessen the tendency toward punitive, coercive, and inconsistent parenting behavior, and, in turn, foster positive socioemotional development in economically deprived children. Copyright © 1990, Wiley Blackwell. All rights reserved
