Consequences of Parents’ Unemployment on Investments in Children’s Education in Brazil

This paper investigates whether parents’ entry into unemployment affects investment in children’s education through their decision to provide public or private education for their children. The empirical approach makes use of longitudinal data from the Continuous National Household Sample Survey (Pesquisa Nacional por Amostra de Domicílios Contínua–PNAD contínua) and propensity-score matching with difference-in-difference methods. According to estimates, parents’ unemployment reduces the probability of children’s enrollment in the private educational system, which usually has better quality but high costs, instead of in the public educational system, which is offered for free but typically has poor quality. Thus, evidence suggests that reductions in household income as a consequence of unemployment can have impacts on the quality of human capital accumulated by children.