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  3. American Economic Journal: Applied Economics
  4. July 2016
  5. Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs

Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs

  • Nathaniel G. Hilger
American Economic Journal: Applied Economics
vol. 8, no. 3, July 2016
(pp. 247-83)
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Abstract

How do parental layoffs and their large attendant income losses affect children's long-term outcomes? This question has proven difficult to answer due to the endogeneity of parental layoffs. I overcome this problem by exploiting the timing of 7 million fathers' layoffs when children are age 12-29 in administrative data for the United States. Layoffs dramatically reduce family income but only slightly reduce college enrollment, college quality, and early career earnings. These effects are consistent with a weak estimated propensity to spend on college out of marginal parental income. I find that larger effects based on firm closures stem from selection.

Citation

Hilger, Nathaniel G. 2016. "Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs." American Economic Journal: Applied Economics, 8 (3): 247-83. DOI: 10.1257/app.20150295

Additional Materials

JEL Classification

  • I23 Higher Education; Research Institutions
  • I24 Education and Inequality
  • I26 Returns to Education
  • J13 Fertility; Family Planning; Child Care; Children; Youth
  • J22 Time Allocation and Labor Supply
  • J31 Wage Level and Structure; Wage Differentials
  • J63 Labor Turnover; Vacancies; Layoffs
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