Non-Technical Summary:
Children may suffer in various ways when their parents are unemployed. They can suffer from poor performance at school, experience high risks of grade repetition and have lower chances to finish school. This poor performance in early life tends to persist into high school or college and is critical to later success in the labour market. From a policy perspective it is therefore crucial to understand the size and persistence of parental unemployment on children’s educational attainment.
Our aim is to challenge existing knowledge on this area by understanding the process underlying the unemployed parent and child. We do so by focussing on a sample of Dutch children who were exposed to their parents’ unemployment during the previous economic crisis in the early 1980s. To trace the labour force dynamics of the parents and the educational attainment of their children we first integrated Dutch household survey data with administrative register data. We then engaged in a series of analytical models to test for the size and persistence of parental unemployment on their children’s educational attainment.
Our study reveals three central findings. First, we find that it is the volatility – rather than the average – in the occurrence and duration of parent unemployment that inflicts the largest negative effects on children’s educational attainment. Second, we find that the negative effects of fathers’ unemployment are primarily transmitted through the changing views of their wives and mothers towards the importance of work. These become negative over the duration of their husbands’ unemployment and influence negatively their children’s educational attainment. This process works similarly among employed parents and their children. A final key finding is that the timing of parents’ unemployment influences children’s educational attainment in distinct ways, with younger children more adversely impacted. In this respect, our findings about the added compilation of parental unemployment among the younger children adds to previous research on this topic by showing why adverse family economic conditions are most detrimental among the young.
Our findings have important implications for policy as well. We have shown that unemployment limits families’ ability to invest in the lives and learning environments of their children, which in turn hampers their educational development and outcomes. We also show that these effects may be stronger when parents, and in particular mothers, become discouraged and detached from labor markets. This means that policies that promote equal distribution of resources and foster positive views about work can be more effective in combating the negative effects of unemployment. Policymakers should encourage and expand strategies that increase parents’ involvement in the labor market, as well as activities that promote the normative aspects and importance of work. Cultivating positive norms about work is crucial because it influences the work aspirations and ambitions of future generations, which determine the kind of society that we will have in the future.