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

Nathaniel G. Hilger

American Economic Journal: Applied Economics, 2016, vol. 8, issue 3, 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.

JEL-codes: I23 I24 I26 J13 J22 J31 J63 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/app.20150295
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Citations: View citations in EconPapers (101)

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