This report confirms the detrimental effects of low family income on children by examining the well-being of children across all incomes and race-ethnicity groups in a nationally representative sample of children attending kindergarten and participating in the Early Childhood Longitudinal Study, Kindergarten Class of 1998-99. The sample included 51 percent boys and was 59 percent European-American, 17 percent Latino, 14 percent African-American, 5 percent Asian-American, and 5 percent other race/ethnic group. Seventy-five percent were from two-parent families. Forty-five percent of kindergartners lived in low-income families. Data were comprised of three indicators of academic development, four indicators of social and emotional development, and one indicator of physical development. Findings revealed that children in families whose incomes fell below 200 percent of the federal poverty level (FPL) were well below average in reading, math, and general knowledge test scores, compared to well-above-average scores of children living in families with incomes over 300 percent of FPL. Some children in low-income families scored considerably above the mean. As families' incomes increased, so did levels of both children's social competence and self-regulation. As families' incomes increased, levels of externalizing and internalizing problem behaviors decreased at regular intervals. Children in low-income families were more likely than other children to be overweight, although 10 percent of all kindergartners, regardless of family income, were seriously overweight. The report concludes with a discussion of public policy implications, noting that the findings provide clear support for a broad perspective on factors that promote school readiness and early school success. (Contains 17 endnotes.) (KB)