The Intergenerational Consequences of Unexpected Job Loss (original) (raw)
Related papers
Disparate Impacts of Job Loss by Parental Income and Implications for Intergenerational Mobility
2021
We show that after losing their jobs adult children born to parents in the bottom 20% of the income distribution have double the unemployment compared with those born in the top 20%, with 118% higher earnings losses. We nd this has important implications for intergenerational mobility. As a result of the disparate incidence and impact of job loss, the population rank-rank correlation is 3.9% higher at age 40. We show that direct interventions by parents after their child loses a job and earlier life investments both play roles in explaining the di erent impacts of job loss by parental income.
Labour Economics, 2008
Based on matched employer-employee data from Norway, we analyze the effects of worker displacement in 1986-1987 on their children's earnings in 1999-2001. Using displacement of fathers to indicate an exogenous earnings shock we seek to identify whether family resources have a direct effect on children's economic outcome. As in previous Scandinavian studies, we find the intergenerational earnings mobility to be fairly high compared to the U.S. and the U.K. Displacement appears to have a negative effect on earnings and employment of those affected, while we find no significant effects on offspring.
Fiscal Studies, 2012
The research on intergenerational correlations in outcomes is increasingly moving from measurement into assessment of causal transmission mechanisms. This paper analyses the causal impact of fathers' job loss on their children's educational attainment and later economic outcomes. To do so, we isolate the effect of job loss associated with major industry contractions, mainly in manufacturing, during the recession of the 1980s by mapping industry-level employment change data from 1980 to 1983 into the British Cohort Study (BCS). Children with fathers who were identified as being displaced did significantly worse in terms of their GCSE attainment than those with non-displaced fathers. A child with a displaced father obtained, on average, 18 grade points lower or half a GCSE at grades A*-C less than their otherwise-identical counterparts, the equivalent of about 2 per cent lower wages as an adult. There is also a small effect of fathers'
2007
Using Statistics Canada's Longitudinal Worker File, we document short-term and long-term earnings losses for a large (10%) sample of Canadian workers who lost their job through firm closures or mass layoffs during the late 1980s and the 1990s. Our use of a nationally representative sample allows us to examine how earnings losses vary across age groups, gender, industries and firms of different sizes. Furthermore, we conduct separate analyses for workers displaced only through firm closures and for a broader sample displaced either through firm closures or mass layoffs. Our main finding is that while the long-term earnings losses experienced on average by workers who are displaced through firm closures or mass layoffs are important, those experienced by displaced workers with considerable seniority appear to be even more substantial. Consistent with findings from the United States by Jacobson, , high-seniority displaced men experience long-term earnings losses that represent between 18% and 35% of their pre-displacement earnings. For their female counterparts, the corresponding estimates vary between 24% and 35%.
Parental Proximity and the Earnings Consequences of Job Loss
Economic Commentary (Federal Reserve Bank of Cleveland), 2017
We find post-job-loss earnings recovery is faster for young adults who live near their parents than for young adults who live farther away. This positive effect diminishes gradually as the distance to one's parents increases. Most of the effect is driven by higher wages after job displacement, not by differences in the number of hours worked. The effect is not present for older workers, who may be caring for elderly parents.
Parental Assistance after Job Losses
Economic Commentary (Federal Reserve Bank of Cleveland), 2018
We have previously shown that young adults who live near their parents experience faster earnings recoveries after a job loss than young adults who live farther from their parents. In this analysis, we present evidence that demonstrates the relationship is causal; that is, there is something about living close to one’s parents that enables one to find another job that pays as well as the one lost. We also explore what type of parental help might be driving the relationship and find that it is possibly the provision of childcare and access to job networks, but likely not help with housing expenses.
Parental Job Loss, Parental Ability and Children’s Educational Attainment
2012
The recent recession has focused attention on the effects of job loss and unemployment, but job loss is a common experience even during times of economic expansion. While much is known about the impact of job loss on the earnings, income, and unemployment of adults, less is understood regarding the relationship between parental displacement and children’s outcomes. I estimate the effect of parental job loss on children’s educational attainment. In particular, I focus on the role of parental ability, both cognitive and non-cognitive, using observed measures of parents’ attributes and an instrumental variable analysis to account for unobserved attributes. Using the Panel Study of Income Dynamics (PSID) I find that experiencing a parental job loss during childhood reduces the probability that an offspring will obtain any post-secondary education (by age 21) by at least 10 percent and perhaps as high as 50 percent. Furthermore, household resources, including family income and wealth, do...
Unemployment and its effects on families: Evidence from a plant closing study
American Journal of Community Psychology, 1990
Assessed the impact of unemployment on the families of auto workers recently unemployed or anticipating unemployment, as perceived by the workers themselves. A quasi-experimental design is used in the study; workers were sampled from plants scheduled to close (n = 831) and those not closing (n = 766). Results indicate that financial hardship produced by the unemployment experience has powerful negative effects on the families of these workers. Further results indicate that the stress of unemployment on families is mediated by financial hardship. The stress of unemployment on families operates largely through financial hardship. ~These data were collected under the direction of William S. Hoffman. Funds for the study were provided to the Michigan Health and Social Security Research Institute by the Michigan Health Care Research and Education Foundation; the United Auto Workers Union provided partial support. The paper's views are those of its authors and should not be construed as the positions of these funding sources. We are especially grateful to the men and women of the UAW whose experiences and views form this investigation. We also thank Donald Ephlin, Ernest Lofton, and Stanley Marshall of the UAW for their support and cooperation. We are
Parental job loss and child human capital in the short and long run
2019
We study the effects of parental job loss on children’s health, educational achievement and labor market success as young adults. Past evidence shows mixed results which could be due to small sample sizes and that workers who suffer job loss are a selected group. Using Swedish register data, including more than 140,000 children whose parents were displaced due to workplace closures, and conditioning on a wide set of pretreatment outcomes of both parents and children, we find no effects of parental job loss on childhood health, school performance or outcomes as young adults although parents are negatively affected.
2011
Unexpected events such as job displacement, disability, and divorce can have negative effects on individual and family income. For many families, social insurance provided by the government plays an important role in buffering the impact of these shocks. However, on average, Americans depend more on private resources rather than the public sector to insure against these losses.