Snaebjorn Gunnsteinsson () and Herdis Steingrimsdottir ()
Herdis Steingrimsdottir: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Abstract: Childhood disability is a major health shock that aﬀects parents early in their working life. We estimate its impact on parents’ career trajectories, their balance sheets, and major life decisions using detailed register data from Denmark. To identify the causal eﬀect of childhood disability we use an event study approach, where we control for a rich set of pre-birth variables and focus on conditions that have no or weak associations with socioeconomic determinants. We ﬁnd that having a child with a disability has strong negative impact on mothers’ earnings. The eﬀect is persistent and the wage penalty appears to grow over time. Fathers’ earnings are also aﬀected but the impact is notably smaller. We ﬁnd that both parents are less likely to be employed in the long run and are less likely to ascend to top executive positions. The long-term structure of the household is also aﬀected as subsequent fertility is lower and partnership dissolution is more common. Finally, despite this ﬁnancial shock, long term net worth of families is not aﬀected or may be positively aﬀected, potentially due to help from government transfers and lower cost associated with having fewer other children, or due to a stronger savings motive for the long term care of the disabled child.
49 pages, June 18, 2019
Full text files
9745 Full text
Questions (including download problems) about the papers in this series should be directed to Lene Hald ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2022-03-04 14:16:00.