Parental earnings response to children's job loss: Evidence from Finland

Mika Haapanen, Jaakko Pehkonen and Ville Seppälä

Labour Economics, 2025, vol. 94, issue C

Abstract: This study investigates how job displacement among adult children affects their parents’ earnings using population-based data from Finland. The research utilizes plant closures during the 1991–1994 recession as exogenous shocks to identify causal effects. Our results show that an adult child's job loss leads to increased parental earnings, particularly two to five years post-displacement, but the effect size gradually diminishes over time. The effects are pronounced among older parents and male parents. This study contributes to the literature on intergenerational economic spillovers and highlights the role of parents’ altruism and economic behavior in response to children's job displacement.

Keywords: Earnings; Displacement; Adult children; Parental earnings; Intergenerational effects (search for similar items in EconPapers)
JEL-codes: D15 D64 G51 J22 J26 J31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:94:y:2025:i:c:s0927537125000417

DOI: 10.1016/j.labeco.2025.102714

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