Lynne Watts and John Nisbet, Legibility in Children’s Books, (p.19):
Legibility as a priority may suffer; but by knowing precisely what diminishes legibility, the designer is in a better position to decide how far reading efficiency should be reduced for considerations of impact, visual experience, ‘atmosphere’, etc.
Capital letters (p.21):
Research studies have shown that children are more familiar with capital letters than with lower case letters. They are able to name correctly more capital letters than lower case, to perceive capitals more easily and to experience less confusion in differentiating between individual letters.
Clarity vs. legibility (p.33):
The geometric design of modern typefaces is appreciated by many designers for its clarity and symmetry. However clarity and legibility may be in conflict.
Type size (p.49):
A type size should be large enough to enable ease of letter discrimination, but small enough to encourage word recognition rather than letter recognition. This would preclude the use of a type size larger than 18 points. Generous leading would appear appropriate for children in the early grades where perception and spatial difficulties are commonly found.