Abstract
This paper provides new empirical evidence on the impact of parental health shocks on investments in children's education using detailed longitudinal data from Bosnia and Herzegovina. Our study controls for individual unobserved heterogeneity by using child fixed effects, and it accounts for potential misreporting of self-reported health by employing several, more precise, health indicators. Results show that co-living children of ill mothers, but not of ill fathers, are significantly less likely to be enrolled in education at ages 15–24. Moreover, there is some evidence that mother's negative health shocks are likely to raise the employment probability of children due to the need to cover higher health expenditures.
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