Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 22/2020: Postpartum Job Loss: Transitory Effect on Mothers, Long-run Damage to Children

Barton Willage () and Alexander Willén ()
Additional contact information
Barton Willage: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Alexander Willén: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: The first year after childbirth involves dramatic changes to parents’ lives and is crucial for children’s development. Using plausibly exogenous job loss from mass layoffs, we study the effect of labor shocks on mothers and children. Mothers displaced in the postpartum year experience significantly larger effects than mothers displaced in non-birth years. No such effects are present among fathers. Additionally, we find long-lasting harm to children’s educational outcomes. These effects do not extend to children who experience maternal job loss later in life nor to children who experience paternal job loss. Examining potential mechanisms suggest effects are driven by maternal stress.

Keywords: Job Loss; Maternal Labor Supply; Education; Early Childhood; Fertility

JEL-codes: I20; I24; J13; J16; J24

29 pages, November 19, 2020

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