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The impact of childhood health shocks on parental labor supply

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  • Eriksen, Tine L. Mundbjerg
  • Gaulke, Amanda
  • Skipper, Niels
  • Svensson, Jannet

Abstract

We leverage the onset of type 1 diabetes (T1D) in childhood to estimate the impact of a childhood health shock on parental labor supply. T1D is the second most common childhood chronic physical health condition, inheritability is low, the exact cause is unknown, the onset is unpredictable, and receiving treatment is crucial to survival. Using Danish administrative registry data with both an event study and difference-in-differences analysis shows that mothers shift to part-time work, marginally shift from the private to public sector, and experience a long-term 4-5% decrease in wage income. The dynamic effects reveal large initial impacts, but the magnitudes decrease (although are not eliminated) over time. Fathers do not experience any long-term reduction in wage income. This suggests part of the motherhood penalty is likely due to mothers bearing the economic burden when their child is diagnosed with a chronic health condition.

Suggested Citation

  • Eriksen, Tine L. Mundbjerg & Gaulke, Amanda & Skipper, Niels & Svensson, Jannet, 2021. "The impact of childhood health shocks on parental labor supply," Journal of Health Economics, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:jhecon:v:78:y:2021:i:c:s0167629621000710
    DOI: 10.1016/j.jhealeco.2021.102486
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    Cited by:

    1. Achyuta Adhvaryu & N. Meltem Daysal & Snaebjorn Gunnsteinsson & Teresa Molina & Herdis Steingrimsdottir, 2023. "Child Health, Parental Well-Being, and the Social Safety Net," CESifo Working Paper Series 10418, CESifo.
    2. Francisca Vargas Lopes & Pieter Bakx & Sam Harper & Bastian Ravesteijn & Tom Van Ourti, 2022. "The effects of supported housing for individuals with mental disorders," Health Economics, John Wiley & Sons, Ltd., vol. 31(S2), pages 115-133, October.
    3. Amanda Gaulke, 2021. "Individual and family labor market impacts of chronic diseases," IZA World of Labor, Institute of Labor Economics (IZA), pages 482-482, January.
    4. Damian Clarke & Nicolas Lillo Bustos & Kathya Tapia-Schythe, 2022. "Estimating Inter-generational Returns to Medical Care: New Evidence from At-Risk Newborns," Working Papers wp537, University of Chile, Department of Economics.
    5. Eriksen, Tine L. Mundbjerg & Gaulke, Amanda P. & Skipper, Niels & Svensson, Jannet & Thingholm, Peter, 2023. "Educational consequences of a sibling's disability: Evidence from type 1 diabetes," Economics of Education Review, Elsevier, vol. 94(C).
    6. Jiayi Wen & Haili Huang, 2023. "Parental Health Penalty on Adult Children's Employment: Gender Difference and Long-Term Consequence," Papers 2308.13156, arXiv.org.
    7. Eriksen, Tine Louise Mundbjerg & Gaulke, Amanda & Svensson, Jannet & Skipper, Niels & Thingholm, Peter Rønø, 2023. "Childhood Health Shocks and the Intergenerational Transmission of Inequality," IZA Discussion Papers 16447, Institute of Labor Economics (IZA).
    8. Konstantin Kunze, 2022. "Public Health Insurance of Children and Parental Labor Market Outcomes," Working Papers 349, University of California, Davis, Department of Economics.

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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