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The Effect of Parental Unemployment on Children's Short-Term Outcomes
Fri, April 22, 4:15 to 5:45pm PDT (4:15 to 5:45pm PDT), Division Virtual Rooms, Division L - Section 9: Policy Implementation and Going to Scale Virtual Roundtable Session RoomAbstract
Unemployment can have detrimental consequences for workers and their families. Building on the parent investment model and the family stress model, this study explores the causal effect of parental unemployment on children's short-term outcomes. To control for potentially endogeneity, this paper uses the 2001 recession and its severity across states as an exogenous shock to parental unemployment. Further, I use U.S. longitudinal data to account for non-observable factors related to children’s outcomes. The findings provide evidence that parental unemployment is negatively associated with children’s achievement in math and reading in states hit hard by the 2001 recession. These negative results are particularly salient for Black and low-income children. Lastly, I found no effect of parental unemployment on children’s behavior problems.