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The long shadow of labor market entry conditions: Intergenerational determinants of mental health

Author

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  • De Vera, Micole
  • Garcia-Brazales, Javier
  • Lin, Jiayi

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.

Suggested Citation

  • De Vera, Micole & Garcia-Brazales, Javier & Lin, Jiayi, 2026. "The long shadow of labor market entry conditions: Intergenerational determinants of mental health," Labour Economics, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:labeco:v:98:y:2026:i:c:s0927537125001678
    DOI: 10.1016/j.labeco.2025.102843
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    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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