Parental Health Events and Children’s Skill Development

This paper examines parents and children in the longitudinal Panel Study of Income Dynamics and PSID-Child Development Supplement to identify how a child's level of skills is affected by the onset of a negative parental health event. I estimate effects for two measures of health events—the diagnosis of one of eleven specific health conditions and an unspecified physical or nervous condition—each of which are reported to limit the activities of the parent. For both measures of health events, the analysis suggests that the onset of a parental health event has, on average, small negative effects on the level of children's noncognitive skills. However, small average effects mask heterogeneous effects across: the sex of the parent, sex of the child, and the type of health condition. Specifically, parental health events are estimated to significantly impair noncognitive skill development when a father is afflicted with a health event, affect sons more negatively than daughters, and are worse for certain—vascular or cancerous—conditions. Further exploration suggests that effects of parental health events on skill investments are driven by the hypothesized mechanism, changes in skill investments. Specifically, when parental health events are estimated to create the poorest behavior outcomes, large reductions in one measure of skill investment, time that parents participate in activities with children, is also commonly found.