Short-Run Effects of Parental Job Loss on Child Health

Working Paper: NBER ID: w21745

Authors: Jessamyn Schaller; Mariana Zerpa

Abstract: Recent research suggests that parental job loss has negative effects on children's outcomes, including their academic achievement and long-run educational and labor market outcomes. In this paper we turn our attention to the effects of parental job loss on children's health. We combine health data from 16 waves of the Medical Expenditure Panel Survey, which allows us to use a fixed effects specification and still have a large sample of parental job displacements. We find that paternal job loss is detrimental to the physical and mental health of children in low-socioeconomic status (SES) families, increasing their incidence of injuries and mental disorders. We separately find that maternal job loss leads to reductions in the incidence of infectious illness among children in high-SES families, possibly resulting from substitution of maternal care for market-based childcare services. Increases in public health insurance coverage compensate for a large share of the loss in private coverage that follows parental displacement, and we find no significant changes in routine or diagnostic medical care.

Keywords: Parental Job Loss; Child Health; Mental Health; Socioeconomic Status; Health Insurance

JEL Codes: I10; I12; I13; J60

Causal Claims

Cause	Effect
paternal job loss (J12)	adverse health outcomes in children (I14)
paternal job loss (J12)	increased incidence of injuries in children (J28)
paternal job loss (J12)	increased incidence of mental disorders in children (J13)
maternal job loss (J63)	decrease in the incidence of infectious illnesses among children in high-SES families (I14)
increases in public health insurance coverage (I13)	offset loss in private insurance following parental job displacement (J65)
parental job loss (J63)	no significant changes in routine or diagnostic medical care utilization (I11)