Child development and life outcomes are partly linked to prenatal and maternal conditions such as mother’s age at birth. Thus, the issue of teenage motherhood has attracted significant concern from researchers and policymakers because of its potential implications for children. The existing literature on effects of teenage motherhood on children is typically limited to weight at childbirth. Other studies are mainly descriptive in nature and do not account for selection bias associated with teenage mothers and their deprived environment resulting in their children also being brought up in similar environment. This article examined the effects of teenage motherhood on child outcomes, specifically on children’s education, economic well-being, reported health status and body mass index (BMI). Children (0–14 years) of teenage mothers (less than 20 years at first birth) in National Income Dynamics Survey (NIDS) data constitute the subjects under investigation in this study. Using NIDS data, the study applied pooled regression, random effects model and propensity score matching (PSM) technique to examine the effect of teenage motherhood on child outcomes. The study confirms that the PSM method is more robust to selection bias than pooled regression and random effect techniques. The findings from this study reveal that teenage motherhood significantly increases child grade repetition and economic dependency. However, teenage motherhood association with child health and BMI is found to be insignificant. Teenage motherhood has far-reaching effects on children outcomes, thus proactive, reactive and post-active policies and programmes focusing on minimising the effect of teenage motherhood and enhancing children’s welfare are recommended.