Parental depressive symptoms and the child labor-schooling nexus: evidence from Mexico

Research in psychology has suggested that parental depression translates into bad parenting and worsened behavioral outcomes for children. In this article, I look at the effect of depression on child education and labor outcomes in Mexico. Using a rich panel data set and making use of violent assault as a source of exogenous variation in depressive symptoms, I estimate the impact of a shock to parents' mental health on a series of child outcomes. The findings suggest that worsened parental mental health increases the probability of grade repetition and market work for children. The effects are not driven by those children whose parents had the worst mental health status at the onset of the survey, and are robust to alternative specifications. Given the documented extensive underutilization of mental health services in Mexico, public interventions in this domain have the potential to come with positive externalities and be cost-efficient.