Short-Run Effects of Parental Job Loss on Children

Jack Byers

Ann Huff Stevens and Jessamyn Schaller
National Bureau of Economic Research
November 2009

If one or both parents are laid off, are their children more likely to be held back in school? That’s what this analysisprobes out using longitudinal data from the Survey of Income and Program Participation. Initially finding a correlation between grade retention for children and rates of parental job loss, the authors wanted to make sure that this relationship was not caused by other factors. But after controlling for a host of variables, such as household income (before the layoff), parental education, previous grade retention (whether the student was held back before), sibling grade retention (whether a brother or sister was held back), race, and gender, the relationship still persisted. In fact, the authors concluded that having a parent lose his or her job increased by fifteen percent the probability that their child would be held back in school. Though the authors overlook social promotion, a widespread problem likely to affect any grade-retention-based dataset, their findings make intuitive sense: Financial stress at home will probably leak into the classroom. That does not, however, mean we should add parental job loss to the list of excuses for weak pupil performance; instead, the authors advise, we should be devoting more energy and resources to these children rather than assuming they are beyond our reach. You can purchase the report here.

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