What happens to junior when mum or dad loses their job?

What happens to kids’ school performance if their parent becomes unemployed? According to a new study from Norway, the answer depends on whether it’s mum or dad. They use plant closings rather than all job losses, since economists generally think that having your firm shut down is more exogenous (ie. more like a random shock) than being fired.

Parental Job Loss and Children’s School Performance
Mari Rege, Kjetil Telle and Mark Votruba
Using Norwegian register data we estimate how children’s school performance is affected by their parents’ exposure to plant closure. Fathers’ exposure leads to a substantial decline in children’s graduation-year grade point average, but only in municipalities with mediocre-performing job markets. The negative effect does not appear to be driven by a reduction in father’s income and employment, an increase in parental divorce, or the trauma of relocating. In contrast, mothers’ exposure leads to improved school performance. Our findings appear to be consistent with sociological “role theories,” with parents unable to fully shield their children from the stress caused by threats to the father’s traditional role as breadwinner, and mothers responding to job loss by allocating greater attention towards child rearing.

One thing I love about these Scandinavian studies is the data. None of these namby-pamby 1-in-100 samples for them. 

Our analysis utilizes a comprehensive, longitudinal register database containing annual records for every person in Norway (FD-trygd), in addition to a database containing the school grades of all graduating secondary students in Norway from 2003 to 2005. Importantly, the two databases contain personal identifiers allowing us to link each child’s educational outcomes to the parents’ records. This provides us with a unique opportunity to investigate the causal effect of parental job loss on a child’s school performance.

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7 Responses to What happens to junior when mum or dad loses their job?

  1. Kevin Cox says:

    I am interested to know how of if the information from these sorts of studies ever result in any action on the part of anyone? What now happens. How do they get used. Is it just background information for people making policy for elections? Do charitable organisations set up to help the unemployed use it to help them in deciding what to do? In other words do these studies sit out there waiting to be googled or is there something a bit more proactive that takes place – like the authors automatically emailing organisations around the world who they think may find the information useful.

  2. conrad says:

    I love the sample size of that study too. If its the one all the other info comes from, I think its one of the best data sets in the world.

  3. derrida derider says:

    Yep, the Nordics have this interesting attitude to privacy. Their line is that in an open society anything the government knows should be known to the citizenry, with exceptions mainly limited to national security (and even there they take a tightly circumscribed view of what “national security” involves, unlike English-speaking governments) . That’s the best way to ensure government remains the citizens’ servant, not their master.

    So logically anything you tell the government should be publicly available – including, for instance, your tax return.

  4. backroom girl says:

    Yes, even though I have no particular desire to be like the Nordics in most ways, their attitude to data privacy (or not) has a lot to be said for it. Speaking as an occasional researcher of course, but I don’t think I would have a problem with any administrative data on myself being made available for research.

    And once again scientists prove that kids do better at school when mum stays home – though I guess I should be grateful that the effect is only marginally significant and only where the labour market it weaker. But presumably these (average) results could be driven by a relatively small group of individuals – fathers who react particularly badly to job loss and mothers who welcome the opportunity to stay at home and give more time to their children. They don’t provide the basis for any kind of policy prescription, in my view.

  5. Don Arthur says:

    The researchers speculate that parental stress reduces children’s school performance.

    If this is right then you’d expect tough welfare to work policies might also adversely affect children’s performance.

    If stay-at-home-by-choice single mothers are threatened with loss of income unless they work or participate in welfare to work activities, you’d expect an increase in stress.

    The US research I’ve seen shows that there is little impact on outcomes for younger children but some (small) impact on older children.

    It would be interesting to see research which tests hypotheses about the mechanisms involved. If stress is the mechanism then perhaps any major life change will depress children’s school performance (eg remarriage, career change, promotion).

  6. backroom girl says:

    Don – I have only a passing familiarity with the US research, but I think the main reason that older children show more adverse effects from the US version of Welfare to Work is that they have less parental supervision.

    However, I don’t think those findings are very generalisable to the Australian context, for a number of reasons.

    First, WtW in the US involves full-time work, while here it is 15 hours a week. So the capacity of mothers to supervise their older children should not be adversely affected.

    Second, in the US many of the welfare mothers go into minimum wage jobs (ie jobs that pay below the official US poverty line). So their families don’t even benefit financially by the movement of the mother into work. In Australia, by contrast, most single parents have access to very generous income support arrangements that enable them to continue to receive top-up income support even in low-paid full-time work and assistance for children is also much more generous here than in the US. So, barring cases with very high work-related costs (which again should be uncommon given the 15 hour requirement is placed only on people whose children are all at school), single parent families in Australia are quite a lot better off if Mum goes into work.

    As far as I know, there is a fairly major evaluation of the Australian WtW changes that is under way, though it is not clear how much of its findings will make it into the public arena.

  7. Patrick says:

    They use plant closings rather than all job losses,

    Does any else think that this is, er, highly likely to focus the results on a particular socio-economic group and that that might be really relevant to the results achieved?

    but only in municipalities with mediocre-performing job markets.

    oh, shock, it is (really relevant to the results).

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