Labour market shocks and parental investments during the Covid-19 pandemic

Hupkau, Claudia ORCID: 0000-0002-7545-3835, Ruiz-valenzuela, Jenifer ORCID: 0000-0002-7238-2074, Isphording, Ingo E. and Machin, Stephen (2023) Labour market shocks and parental investments during the Covid-19 pandemic. Labour Economics, 82. ISSN 0927-5371

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Abstract

This paper studies spill-over effects of parental labour market shocks at two time points in the Covid-19 crisis: right after its onset in April 2020, and in January 2021. We use rich data from the UK to look at the consequences of immediate and persistent shocks that hit parents’ economic livelihoods. These negative labour market shocks have substantially larger impacts when suffered by fathers than by mothers. Children of fathers that suffered the most severe shocks - earnings dropping to zero - are the ones that are consistently impacted. In April 2020, they were 10 percentage points less likely to have received additional paid learning resources, but their fathers were spending about 30 more minutes per day helping them with school work. However, by January 2021, this latter association switches sign, as the negative spill-over onto children’s education occurred for those fathers facing more persistent, negative labour market shocks as the crisis progressed. The paper discusses potential mechanisms driving these results, finding a sustained deterioration of household finances and a worsening of father’s mental health to be factors at play.

Item Type:	Article
Additional Information:	© 2023 The Author(s).
Divisions:	Centre for Economic Performance Economics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
JEL classification:	J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J65 - Unemployment Insurance; Severance Pay; Plant Closings I - Health, Education, and Welfare > I2 - Education > I20 - General
Date Deposited:	08 Mar 2023 16:03
Last Modified:	15 Apr 2024 21:33
URI:	http://eprints.lse.ac.uk/id/eprint/118365

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