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Title: Unemployment Compensation's Effect on Early Childhood Development
Resulting in 1 citation.
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Kukla-Acevedo, Sharon Heflin, Colleen M. |
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Unemployment Compensation's Effect on Early Childhood Development Presented: Baltimore MD, Association for Public Policy Analysis and Management (APPAM) Research Conference, November 2012 Cohort(s): Children of the NLSY79, NLSY79 Publisher: Association for Public Policy Analysis and Management (APPAM) Keyword(s): Benefits, Insurance; Home Observation for Measurement of Environment (HOME); Maternal Employment; Modeling, Fixed Effects; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Peabody Picture Vocabulary Test (PPVT); Unemployment Compensation; Unemployment Insurance Permission to reprint the abstract has not been received from the publisher. PURPOSE: Unemployment spells are associated with substantive long-lasting reductions in future earnings and negative mental health status outcomes. The negative effects of unemployment also extend to intergenerational transfers such that parental job displacement, especially of fathers, is correlated with children's lower annual earnings, lower educational achievement, grade retention, and high school completion. Despite ample evidence demonstrating a link between parental unemployment spells and negative child outcomes, there is very little research that explores the role of unemployment insurance (UI) in alleviating these negative intergenerational transfers. DATA: In this study, we will analyze data from the National Longitudinal Survey of Youth 79 (NLSY79) and Children of the NLSY79. The NLSY79 is a panel survey of 12,686 men and women who were 14-21 years old in 1978 and is designed to gather detailed data about employment, education/training, income, fertility, and family characteristics. The data are nationally representative of people living in the United States in 1978. The Children of the NLSY79 is a supplemental survey of all children born to the 6,283 women in the original sample. The supplemental survey provides data on the cognitive development of the children born to these mothers. METHODS: We use a lagged dependent variables approach to model the relationship between early childhood cognitive scores and unemployment insurance receipt. It is possible that parental characteristics associated with employment termination and layoffs are also correlated with child cognitive outcomes. To minimize this selection bias threat, our sample includes only those families who faced an unanticipated firm closure. Our baseline models control for as many measurable characteristics as possible that might differ between short-term and long-term UI participants and be related to child outcomes. However, endogeneity is still a substantial problem because those who leave UI may be systematically different from those who experience prolonged exposure to UI in unmeasured ways that are correlated with child outcomes. To further reduce the possibility of selection bias, we use a family fixed effects model that compares siblings' outcomes when UI was received to those when UI was not received. POLICY IMPLICATIONS: This research can inform public policy in important ways. UI has often been criticized for creating disincentives to find work. However, one very good reason for states to provide UI to displaced workers is to minimize the negative effects of unemployment spells that might be associated with reduced income levels. Currently, very little is known about the effects of parental UI receipt on children's cognitive or behavioral outcomes. This study seeks to address this area of need in the research base, given the current focus and multiple expansions of UI eligibility across the states. |
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Bibliography Citation
Kukla-Acevedo, Sharon and Colleen M. Heflin. "Unemployment Compensation's Effect on Early Childhood Development." Presented: Baltimore MD, Association for Public Policy Analysis and Management (APPAM) Research Conference, November 2012. |