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ABSTRACT Since children's homes in Croatia and elsewhere nowadays deal with children who have more problems than in the past, there is a need to identify predictors of the children's behavioural and emotional problems in order to provide adequate interventions and an appropriate developmental environment. This research was carried out in all children's homes in Croatia. The sample consisted of 263 children aged 10–14. Standardized instruments (Youth Self‐Report and Child Behaviour Check‐List) were used as outcome measures of children's psychosocial functioning. The results showed significantly more behavioural and emotional problems in children in children's homes than in the comparison group of children living with their families. Child care‐workers assessed fewer behavioural and emotional problems than did the children themselves. Multiple regression analyses were used to determine predictors for well‐being scores. The level of everyday stress in children's homes, coping strategies, perception of social support and school achievements proved to be the most significant predictors. Since those variables belong to mediating variables within the suggested model of research, it is argued that positive changes in these areas can facilitate a better psychosocial functioning of the children in children's homes.
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