Effects of Parental Death on Labor Market Outcomes (with Mathias Jensen), IZA Discussion Paper Series No. 17127, Revision Requested by American Economic Review
Nearly everyone experiences the death of a parent in adulthood, but little is known about its effects on adult children's labor market outcomes and the underlying mechanisms. In this paper, we use Danish administrative data to examine the impact of parental loss on individual labor market outcomes. We leverage the timing of sudden, first parental deaths and adopt a matched-control difference-in-differences strategy. Our findings show that parental death negatively affects adult children's earnings: sons’ earnings decline by 2% five years after parental loss, while daughters’ earnings decrease by 3% during the same period. Exploring the underlying mechanisms, we find that both men’s and women’s mental health deteriorates following parental loss: women seek psychological assistance more frequently, while both men and women increase their use of mental health and opioid prescriptions. Furthermore, women with young children experience a comparatively larger earnings decline (around 4%) due to the loss of informal childcare. These findings collectively highlight a substantial labor market penalty for individuals who experience parental death.
The Economic Impact of Rape (with Abi Adams, Kristiina Huttunen, and Emily Nix), Revision Requested by American Economic Review
Rape and sexual assault are common worldwide: one in twelve women across 28 EU countries have experienced a rape (European Institute for Gender Inequality, 2012). Yet there is no systematic evidence on how sexual violence affects women's economic outcomes. We harness detailed administrative data from Finland to provide new empirical facts on the economic effect of rape on victims and its spillovers. A third of police reports for rape involved victims younger than 21 years old at the time of the assault. We show that the age-25 employment and college completion rates of younger victims are 12.8 p.p and 10 p.p lower respectively than those of other young women with the same (pre-event) GPA and family background. For older victims, we use a matched difference-in-difference design to show that rape has a large and persistent economic impact on women: victims' employment falls by 7.8 percentage points and their labor market earnings decline 16.5% relative to observationally equivalent women in the five years following the assault. These results are robust to controlling for a variety of shocks preceding rape that could make it more likely for a woman to be victimized and independently suppress her economic outcomes. We also document important spillovers of these crimes to the victim's parents and peers. Mothers and fathers experience significant declines in their employment and female schoolmates experience a deterioration in mental health. Last, we show that higher clearance rates of rape cases mitigate the negative impacts on victims. Together, these results indicate that preventing and addressing sexual violence is a vital economic issue.
Effects of Parental Death on Youth (with Moira Daly, Mathias Jensen, and Yunbin Zhang)
Early-life shocks, such as the loss of a parent, can have lasting effects on inequality and human capital development. We study the effects of parental death during adolescence on both immediate and long-term outcomes, including education, mental health, criminal behavior, teenage pregnancy, and labor market performance. Using four decades of population-wide Danish administrative data and a difference-in-differences design with soon-to-be-treated children as controls, we provide causal evidence that parental death reduces high school graduation rates and tertiary educational enrollment while increasing the uptake of mental health treatment. Behavioral responses to parental death differ by gender: girls show an increased risk of teenage pregnancy, while boys demonstrate a higher likelihood of engaging in criminal activity. These more immediate effects lead to a long-term reduction in annual earnings. We find that living closer to grandparents, higher school quality, and a greater share of female teachers can mitigate some of these negative effects.
Resettlement Agency Resource Strain and Refugee Outcomes: Evidence from Catholic Sex Abuse Scandals (with Jia Huang, Neil Silveus, and K. Pun Winichakul)
Partner agencies are an important part of the United States refugee resettlement process. In this paper, we explore how resource strains on partner resettlement organizations shape refugee outcomes. We consider reduced refugee support provided by the largest partner entity, the United States Conference of Catholic Bishops, resulting from revelations of sexual abuse allegations across US dioceses. Combining this information with recent administrative data and a novel approach to identify likely refugees at the diocese level, we find that resource strain resulting from newly disclosed abuse scandals leads to reductions in refugee participation in federal social safety net programs. We also find suggestive evidence of negative effects on labor market outcomes such as employment and wages. When evaluating mechanisms, we note the negative impact of scandals on organizational financial and non-financial resources which reduces their capacity to offer comprehensive services to refugees. Our paper provides important insights to consider when designing a refugee resettlement process to best support this vulnerable population.
The Boomerang Kids: Unemployment, Job Mismatch and Coresidence (with Stefania Albanesi and Rania Gihleb), NBER Working Paper #30397
Labor market outcomes for young college graduates have deteriorated substantially in the last twenty five years, and more of them are residing with their parents. The unemployment rate at 23-27 years old for the 1996 college graduation cohort was 9%, whereas it rose to 12% for the 2013 graduation cohort. While only 25% of the 1996 cohort lived with their parents, 31% for the 2013 cohort chose this option. Our hypothesis is that the declining availability of "matched jobs" that require a college degree is a key factor behind these developments. Using a structurally estimated model of child-parent decisions, in which coresidence improves college graduates' quality of job matches, we find that lower matched job arrival rates explain two thirds of the rise in unemployment and coresidence between the 2013 and 1996 graduation cohorts. Rising wage dispersion is also important for the increase in unemployment, while declining parental income, rising student loan balances and higher rental costs only play a marginal role.