The effect of recessions and economic shocks has long been thought to negatively effect parenting and child wellbeing. Research by Elder (1974) and Elder and Conger (2000) has investigated the association between economic hardship and changes in parenting in the context of the Great Depression and the Iowa Farm crisis. Elder and Conger find that the effect of economic stress on child wellbeing is mediated by changes in parenting that result from economic shocks (Conger et. al., 2002).  They propose a family stress model wherein economic stress diminishes parenting quality and negatively affects child development (2000). In addition to research specifically focused on large-scale economic changes, a range of research has demonstrated a link between low-income, stress and reduced parenting quality (Park et. al, 2004; McCloyd, 1994; Jackson et. al, 2000; Berger et. al, 2008; Gershoff et. al, 2007 Duncan & Brooks-Gunn, 2000).

In this analysis, we examine the effect of the Great Recession on four aspects of mothers’ parenting: (1) physical and psychological aggression towards children, (2) warmth and monitoring, (3) parenting activities and closeness, and (4) parenting stress. The Great Recession, beginning in December 2007 and officially ending in June 2009 (NBER, 2012), severely disrupted the American economy and family life, including events such as the fall of Lehman Brothers in September 2008 and the ensuing stock market crash. It also serves as an exogenous economic shock allowing us to investigate the link between economic instability and parenting. To this end, we employ three distinct measures of the Great Recession: consumer confidence (using data from the Consumer Sentiment Index), unemployment rates (from the Bureau of Labor Statistics), and home foreclosure rates (from the Mortgage Bankers Association).

Specifically, we ask whether declining consumer sentiment and increasing unemployment and home foreclosures were associated with increased harsh parenting and other measures of maternal parenting. We expect that these economic measures will capture different effects of the Great Recession. Consumer confidence is likely measuring consumer uncertainty, which we might expect to affect a broader spectrum of the population than experienced unemployment or home foreclosures. Similarly, unemployment is likely to affect a wider range of the population than those affected by home foreclosures. To better understand which economic measure best captures the effect of the Great Recession on parenting, we estimate the effect of each individual macro-economic measure both individually and combined. Additionally, we assess change in parenting by estimating a lagged dependent variable model. Last, we test whether effects differed by socio-economic status.

The Fragile Families and Child Wellbeing Study is particularly well suited for examining the effects of the Great Recession on families and children. The 9-year follow up survey was collected from May 2007 to February 2010, providing us with a survey frame which includes the Great Recession as well as data prior to and after the recession. We find that the Great Recession is associated with increased risk of maltreatment, as well as increased parenting activities and decreased monitoring, and that worsening consumer confidence is the primary macro-economic pathway.