Panel Paper: Short-Run Effects of Parental Job Loss on Child Health

Thursday, November 6, 2014 : 8:50 AM
Taos (Convention Center)

*Names in bold indicate Presenter

Jessamyn Schaller and Mariana Zerpa, University of Arizona
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 no evidence that children experience negative health effects of parental job displacement in the short run. Instead, we find that displacement is associated with statistically significant reductions in the incidence of otitis (ear infections) and other infectious illnesses as well as reductions in diagnostic doctor visits and prescription drug utilization. These effects are stronger following maternal job displacement and are concentrated among children aged 0 to 4, which suggests that they may be driven by reductions in the use of childcare services. It does not appear that changes in insurance status are driving our results, as we find that the loss of private insurance coverage is largely counteracted by increased public insurance coverage and that there are no significant changes in routine medical care following displacement. We do find evidence of possible negative mental health effects of displacement for some groups.

Full Paper: