The Distributional Effects of Parental Job Loss on Long-Term Labor Market Outcomes
Early Career Research Award
This project will study the effect of parental unemployment at the time of important parental investment milestones on the distribution of children's long-term labor market outcomes. Using high-qualitative administrative data from Austria, I will exploiting the early tracking at age 10 in the Austrian education system to define such an important milestone and compare outcomes of children whose parents had an unemployment spell shortly before and after the track choice. Taking advantage of the timing of the spell will enable me to compare children of families where unemployment had a similar effect on family income. This strategy will allow me to overcome possible selection into unemployment and evaluate the importance of short term constraints at important milestones on long-run outcomes. I will decompose the estimated long-run effect and quantify how much can be explained by possible sub-optimal parental investment as a consequence of the constraints. Results from this project will further help decision makers understand how parental unemployment can affect children's long-term outcomes and will guide them to improve prospects for affected children.