The Long Shadow of Labor Market Entry Conditions: Intergenerational Determinants of Mental Health

Micole De Vera (), Javier Garcia-Brazales () and Jiayi Lin
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Micole De Vera: Banco de España
Javier Garcia-Brazales: CEMFI
Jiayi Lin: Universitat Pompeu Fabra

No 18305, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: What determines long-term mental health and its intergenerational correlation? Exploiting variation in unemployment rates upon labor market entry across Australian states and cohorts, we provide novel evidence that the mental health of daughters is affected by the labor market entry conditions of their parents. In particular, a one standard deviation shock to the unemployment rate upon parental labor market entry worsens daughters' mental health during adolescence by 11% of a standard deviation. This effect is accompanied by lower levels of satisfaction with their health, financial situation, safety, and overall life. A mediation analysis suggests that a sizable proportion (24%) of the impacts on the descendants' mental health is explained by the worse mental health of their parents at mid-life. We do not detect any systematic impact of parental labor market entry conditions among sons.

Keywords: intergenerational correlation; well-being; mental health; recession; Australia (search for similar items in EconPapers)
JEL-codes: E32 I14 I31 J62 (search for similar items in EconPapers)
Date: 2025-12
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