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Intergenerational Transmission of Unemployment: Causal Evidence from Austria

Author

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  • Grübl, Dominik

    (University of Linz)

  • Lackner, Mario

    (University of Linz)

  • Winter-Ebmer, Rudolf

    (Johannes Kepler University Linz)

Abstract

We estimate the causal effect of parents' unemployment on unemployment among their children in their own adulthood. We use administrative data for Austrian children born between 1974 and 1984 and apply an instrumental variables (IV) identification strategy using parents' job loss during a mass layoff as the instrument. We find evidence of unemployment inheritance in the next generation. An additional day of unemployment during childhood causally raises the average unemployment days of the adult child by 1 to 2%. The greatest effects are observed for unmarried parents, young children, children of low-education parents, and in families living in capital cities. We also explore various channels of intergenerational unemployment, such as education, income, and job matching by parents.

Suggested Citation

  • Grübl, Dominik & Lackner, Mario & Winter-Ebmer, Rudolf, 2020. "Intergenerational Transmission of Unemployment: Causal Evidence from Austria," IZA Discussion Papers 13068, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13068
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    Cited by:

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    2. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Gielen, Anne C., 2020. "The Intergenerational Effects of Requiring Unemployment Benefit Recipients to Engage in Non-Search Activities," IZA Discussion Papers 13618, Institute of Labor Economics (IZA).
    3. Jim Been & Anne C. Gielen & Marike Knoef & Gloria Moroni, 2022. "Prolonged worklife among grandfathers: Spillover effects on grandchildren's educational outcomes," Tinbergen Institute Discussion Papers 22-033/V, Tinbergen Institute.

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    More about this item

    Keywords

    intergenerational transmission; mass layoff; unemployment duration; instrumental variable;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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