Its different for different children. Some of them understand more than you think, most of them dont.

I think that reading the classics can be beneficial to the first type. But some of the classics can be very bleak. Its not fair to the children to make them read those. 1984 is probably in this category. Read Animal Farm instead. It is also better for the second type of children.

If done properly, and in moderation, I think reading classics is beneficial.