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Children of the Post-Communist Transition: Age at the Time of the Parents' Job Loss and Dropping Out of Secondary School

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  • Kertesi Gabor

    () (Institute of Economics, Hungarian Academy of Sciences)

  • Kezdi Gabor

    () (Central European University & Institute of Economics, Hungarian Academy of Sciences)

Abstract

Using data on children whose parents lost their jobs during the post-communist transition of Hungary, we address the causal effect of unexpected long-term unemployment of parents on their children's educational achievement. We estimate the effect of the children's age at the time of their parents' job loss on their probability of dropping out of secondary school (an event that follows the parents' job loss by many years). The treatment is an additional year reared in a family with regularly employed parents, which can be interpreted as additional human capital investment. We provide bounding estimates to the causal effect. The estimated bounds are tight, they show a substantial effect, and the effect is significantly stronger for preschool age children than for older ones.

Suggested Citation

  • Kertesi Gabor & Kezdi Gabor, 2008. "Children of the Post-Communist Transition: Age at the Time of the Parents' Job Loss and Dropping Out of Secondary School," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-27, January.
  • Handle: RePEc:bpj:bejeap:v:7:y:2008:i:2:n:8
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    References listed on IDEAS

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    1. Arnaud Chevalier & Colm Harmon & Vincent O’ Sullivan & Ian Walker, 2013. "The impact of parental income and education on the schooling of their children," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-22, December.
    2. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    3. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    4. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, July.
    5. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
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    Cited by:

    1. Gábor Kertesi & Gábor Kézdi, 2011. "Roma employment in Hungary after the post‐communist transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(3), pages 563-610, July.
    2. Jenifer Ruiz-Valenzuela, 2015. "Job Loss at Home: Children's School Performance During the Great Recession in Spain," CEP Discussion Papers dp1364, Centre for Economic Performance, LSE.
    3. Ruiz-Valenzuela, Jenifer, 2015. "Job loss at home: children’s school performanceduring the Great Recession in Spain," LSE Research Online Documents on Economics 63804, London School of Economics and Political Science, LSE Library.

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