Background Higher quality childcare in the years before school may help narrow developmental gaps between the richest and poorest children in our societies, but specific evidence is limited and inconsistent. We address this issue by examining whether higher quality childcare is associated with better developmental outcomes at school entry for children from lower than higher income families.

Methods The sample from the Longitudinal Study of Australian Children included children attending childcare from 2 to 3 years (n=980–1187, depending on outcome). Childcare quality was measured using carers assessment of their relationship with the child. Children's receptive vocabulary was directly assessed in the child's home, and behavioural difficulties were measured by teachers and parents at 4–5 years. We assessed additive and multiplicative income-related effect measure modification of the quality of carer–child relationship on developmental outcomes.

Results After adjusting for confounding, there was some evidence of effect measure modification on the additive and multiplicative scales of childcare quality by income. Children experiencing higher quality relationships and lower income had almost the same risk of poorer receptive vocabulary as children in higher quality relationships and higher incomes (relative excess risk due to interaction=0.18; 95% CI −0.20 to 0.52), ratio of relative risks=1.11 (1.04 to 1.17)). These patterns were similar for teacher-reported and parent-reported behavioural difficulties.

Conclusions The effects of higher quality childcare, in terms of quality relationships with carers, on children's cognitive and behavioural development at school entry were stronger among children from lower income families. This provides some evidence that higher quality relationships in childcare may be especially important in helping reduce developmental gaps for children from lower income families.