Parental Job Loss and Early Child Development in the Great Recession.

Abstract

The study examines whether and why parental job loss may stifle early child development, relying on cohort data from the population of children born in Ireland in 2007–2008 (N = 6,303) and followed around the time of the Great Recession (2008–2013). A novel approach to mediation analysis is deployed, testing expectations from models of family investment and family stress.Parental job loss exacerbates problem behavior at ages 3 and 5 (.05–.08 SDs), via the channels of parental income and maternal negative parenting. By depressing parental income, job loss also hampers children’s verbal ability at age 3 (.03 SDs). This is tied to reduced affordability of formal childcare, highlighting a policy lever that might tame the intergenerational toll of job loss.