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The Long-Term Labor Market Effects of Parental Unemployment

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  • Bernhard Schmidpeter

    (RWI – Leibniz Institute for Economic Research; Christian Doppler Laboratory Aging, Health and the Labor Market, JKU Linz; IZA, Institute for the Study of Labor, Bonn)

Abstract

I investigate the impact of parental unemployment on children’s educational attainment and long-run labor market outcomes in Austria. I find that parental unemployment shortly before an important educational decision by parents for their children lowers a child’s probability of holding a university degree by more than 5 percentage points. I do not find that income is affected at the beginning of a child’s labor market career along the distribution, but I find a gradual deterioration later on. A substantial share of these long-term losses can be explained by the lower parental investment decision. My results emphasize the intergenerational and long-lasting consequences of parental unemployment.

Suggested Citation

  • Bernhard Schmidpeter, 2020. "The Long-Term Labor Market Effects of Parental Unemployment," Upjohn Working Papers 20-322, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:20-322
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    References listed on IDEAS

    as
    1. Andrey Fradkin & Frédéric Panier & Ilan Tojerow, 2019. "Blame the Parents? How Parental Unemployment Affects Labor Supply and Job Quality for Young Adults," Journal of Labor Economics, University of Chicago Press, vol. 37(1), pages 35-100.
    2. Alberto Abadie & Matthew M. Chingos & Martin R. West, 2018. "Endogenous Stratification in Randomized Experiments," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 567-580, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Esther Arenas-Arroyo & Bernhard Schmidpeter, 2022. "Spillover Effects of Immigration Policies on Children's Human Capital," Economics working papers 2022-13, Department of Economics, Johannes Kepler University Linz, Austria.
    2. Matías Ciaschi & Guido Neidhöfer, 2024. "Job Loss and Household Labor Supply Adjustments in Developing Countries: Evidence from Argentina," The World Bank Economic Review, World Bank, vol. 38(3), pages 558-579.
    3. Mari, Gabriele & Keizer, Renske & van Gaalen, Ruben, 2022. "The Timing of Parental Unemployment, Insurance, and Children's Education," SocArXiv 7rm6g, Center for Open Science.
    4. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.

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    More about this item

    Keywords

    parental unemployment; intergenerational effects; long-term effects; unemployment; wage loss; decomposition;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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