This report is concerned with understanding how the economic recession in Ireland affected stress within families, and in turn how this is associated with the behavioural and emotional adjustment of three-year-olds. The analysis is based on data collected from 9,793 families in the Infant Cohort of Growing Up in Ireland, interviewed first at Wave 1 when their children were nine months of age, and again at Wave 2 when their children were three years of age. The timing of the data collection at Wave 2 coincided with the onset of an economic recession in Ireland, thus enabling the changing financial circumstances of a representative sample of families to be documented, and the associations between these economic changes and parental well-being, parenting and child behavioural and emotional difficulties to be examined.