Parental Job Loss and Children's Educational Attainment

Patrick Wightman, University of Chicago

Parental labor market experiences can have far-reaching consequences. Opportunities, conditions and experiences at work not only influence parents’ own attitudes and expectations, but can extend across generations to affect the life-course trajectories of their children as well. In this paper, I explore the intergenerational impact of the labor market using the data from the Panel Study of Income Dynamics (PSID). Specifically, I examine the educational attainment of 1,064 children whose parents report having lost their jobs because their employer “folded, changed hands, moved out of town, died, or went out of business.” As a group, these children drop out of high school at a greater rate and attend and finish college at a lower rate than children experiencing no such shock. I will use a multinomial logit model and the household, employment and income information available in the PSID to investigate the demographic, developmental and economic links between these outcomes.