Child Maltreatment, Unemployment, and Safety Nets

Abstract

This paper studies the impact of unemployment on child abuse and neglect between 2004 and 2012 in the United States, by using unique administrative data on every reported incident of child maltreatment made to the state Child Protective Services for nearly every county. We identify the effect of county-level unemployment rates using an industry shift-share instrument which we create by interacting initial county industry shares and national industry unemployment rates. We estimate a large positive effect of unemployment on child neglect. We show that this result captures an impact on the actual incidence of neglect and not reporting behaviour, is not only driven by the manufacturing sector which explains most of the variation in our shift-share instrument, and is robust to alternative instruments. We find indication for a direct income channel: higher unemployment leads to a decrease in real expenditure on basic goods, like food and beverages. We further support this evidence by showing that the effect of unemployment on neglect is significantly smaller in states that introduced longer extensions to the duration of unemployment benefits following the onset of the Great Recession.