Scandinavian Working Papers in Economics

Nationaløkonomisk tidsskrift,
Nationaløkonomisk Forening

Children in the Aftermath of the Great Recession

2022, Volume 2022, issue 1, pp. 28

Carsten Andersen (), Mikkel Aagaard Houmark (), Helena Skyt Nielsen () and Michael Svarer ()
Additional contact information
Carsten Andersen: De‐ partment of Economics and Business Economics, Aarhus University and Trygfonden’s Cen‐ tre for Child Research, Aarhus University
Mikkel Aagaard Houmark: De‐ partment of Economics and Business Economics, Aarhus University and Trygfonden’s Cen‐ tre for Child Research, Aarhus University
Helena Skyt Nielsen: De‐ partment of Economics and Business Economics, Aarhus University and Trygfonden’s Cen‐ tre for Child Research, Aarhus University
Michael Svarer: De‐ partment of Economics and Business Economics, Aarhus University and Trygfonden’s Cen‐ tre for Child Research, Aarhus University

Abstract: In this paper we study effects of mass layoffs on parents and their children in the aftermath of the Great Recession using staggered difference‐in‐differences (DiD). We exploit quasi‐experimental variation in announcements of mass layoffs in Danish firms in 2008‐2019. We document that parents exposed to a mass layoff during and immediately after the Great Recession are negatively affected 6 years after the event; more so and for a longer period of time for parents at high risk of long term unemployment. Perhaps surprisingly, we find no overall significant negative effects of parental mass layoffs on children; neither academic achievement, absenteeism nor well‐being are affected. We even find some positive effects for the children of parents who were more adversely affected by the layoff, consistent with an increase in parental time investment following unemployment. This last finding would not have appeared using a traditional two‐way fixed effects approach, which appears to be biased towards zero in our setting.

Keywords: mass layoff; unemployment; school outcomes; academic achieve‐ ment; wellbeing

JEL-codes: I20; J63

Language: English

Full text files

Artikel_3.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Lasse Wolsgård ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-03-20 23:25:50.