American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs
American Economic Journal: Applied Economics
vol. 8,
no. 3, July 2016
(pp. 247–83)
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.20150295Additional 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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