Abstract
This paper studies the intergenerational impact of parental job loss on school performance during the Great Recession in Spain. Collecting data through parental surveys in a school in the province of Barcelona, I obtain information about the parental labour market status before and after the Great Recession. I can then link this information to repeated information on their children’s school performance, for a sample of over 300 students. Using individual fixed effects, the estimates show a negative and significant decrease on average grades of around 15% of a standard deviation after father’s job loss. These results are mainly driven by those students whose fathers suffer long unemployment spells. In contrast, the average impact of mother’s job loss on school performance is close to zero and non-significant. The decline in school performance during the Great Recession after father’s job loss, particularly among disadvantaged students, could result in detrimental long-term effects that might contribute to increased inequality. This could be an important and underemphasised cost of recessions.
Highlights
One of the most distinct features of the past Great Recession was the high incidence of job losses on either side of the Atlantic
The results using the fixed effect model are compared to those obtained in a fashion similar to that used in the plant closure literature, and those coming from value-added regressions
This paper has contributed to this literature by looking at the intergenerational impact of labour market shocks on school performance during the Great Recession in Spain
Summary
Given the high unemployment incidence during the Great Recession, the effect of parental job loss on children’s educational outcomes during this period is potentially large. The average impact of mother’s job loss on school performance is close to zero and non-significant These results are in line with those reported by Rege et al (2011) that argue that a disparate effect of job loss across fathers and mothers is consistent with recent empirical studies documenting that the mental distress experienced by displaced workers is generally more severe for men than for women [see, for instance, Kuhn et al (2009)].
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