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This paper investigates family characteristics that enable children to achieve competence despite being exposed to socio‐economic adversity, and analyses the long‐term outcomes of this positive adaptation. The main finding is that the protective factors that modify the impact of adversity are context specific, and show age as well as period effects. Positive adaptation during early childhood has long‐term consequences, yet resilient young people cannot completely overcome the experience of early socio‐economic disadvantage. The results indicate that future research must identify specific rather than general protective factors that provide protection against specific risks for young people in specific life contexts. Copyright © 2002 John Wiley & Sons, Ltd.
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