This proposal seeks continuation of funding for three years to investigate the effects of rural economic stress on adolescent drug and alcohol use. Because of economic conditions reminiscent of those of the 1930s in rural America, rural families are experiencing substantially increased risk for health and behavioral problems that are known to be associated with economic hardship. In effect, the economic environment has created a natural experiment which may serve to clarify stress processes that influence adolescent substance use. It is especially important to identify characteristics of individual family members and family interactions that either exacerbate or protect against the risk of substance use and antisocial behavior under stressful life conditions. To increase understanding of the processes involved, the proposed research will continue the panel study of a sample which consisted at Wave (1989) of 450 two-parent, rural families with a 7th grade adolescent and near sibling (within 4 years of age) in the home. This proposal extends to original 2- wave study to a 4-wave, prospective panel study (yearly measurements) that will assess the direct impact of economic stress on the quality and stability of family relationship and on the emotional physical, and behavioral problems of individual family members. Four waves of data collection will allow the investigation of adolescent change from a period of relatively low risk for problem behaviors (12-13 years of age) to a stage of high risk (16-17 years of age), thus clarifying the stress and family processes that promote substance abuse emotional distress, and conduct problems during the high school years. Four waves of data also will eliminate many of the confounds characteristic of 2-wave panel designs. The status of family and individual characteristics, including adolescent pubertal development, early in the stress process is expected to condition (mediate or moderate) the eventual influence of economic hardship on adolescent deviance and substance use. Economic stress effects on risk factors such as emotional instability, martial distress, divorce, geographic relocation, parents' and sibs' substance use, parent-child conflict conventional values, and other conduct problems and adolescents are expected to exacerbate the negative influence of economic stress on alcohol and substance use. Characteristics such as self-confidence and control, family problem-solving skills and support, and parent child rearing skills are expected to buffer the negative impacts of economic loss. A multiple measurement methodology involving self, other, and trained observer reports is used to assess these constructs. Structural equation models (LISREL, EQS), as well as other appropriate multivariate techniques, will be used to determine the relationships between constructs across the four waves of data collection. In addition to theoretical significance, the findings will inform programs for the prevention of substance abuse.