Labour Market Shocks During the Covid-19 Pandemic, Inequalities and Child Outcomes

46 Pages Posted: 4 Jan 2021

See all articles by Claudia Hupkau

Claudia Hupkau

Universidad Complutense de Madrid (UCM) - Colegio Universitario de Estudios Financieros (CUNEF)

Ingo E. Isphording

IZA Institute of Labor Economics

Stephen J. Machin

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); London School of Economics & Political Science (LSE) - Department of Economics

Jenifer Ruiz-Valenzuela

London School of Economics & Political Science (LSE)

Abstract

We study the effect of negative labour market shocks borne by parents during the Covid-19 crisis on resource and time investments in children and the channels through which negative labour market shocks experienced by parents might affect children. Using data collected in the UK before and during the pandemic, we show that fathers and mothers that were already disadvantaged were more likely to have suffered negative earnings and employment shocks. These shocks had an immediate intergenerational impact: Children whose fathers reported an earnings drop to zero are significantly less likely to have received additional paid learning resources compared to similar children whose fathers did not experience a drop in earnings. Potentially offsetting this, they received about 30 more mins of parental help with schoolwork per day. Parental mental health is negatively affected when they experience earnings losses, and fathers who experience a full loss in earnings were less likely to quarrel or talk about things that matter with their kids than fathers who did not suffer earnings drops. The interactions between labour market shocks, parental investments and school closures are likely to have important implications for future inequality.

JEL Classification: J63, J65, I20, I24

Suggested Citation

Hupkau, Claudia and Isphording, Ingo E. and Machin, Stephen J. and Ruiz-Valenzuela, Jenifer, Labour Market Shocks During the Covid-19 Pandemic, Inequalities and Child Outcomes. IZA Discussion Paper No. 14000, Available at SSRN: https://ssrn.com/abstract=3758701 or http://dx.doi.org/10.2139/ssrn.3758701

Claudia Hupkau (Contact Author)

Universidad Complutense de Madrid (UCM) - Colegio Universitario de Estudios Financieros (CUNEF) ( email )

Serrano Anguita 9
Madrid, Madrid 28004
Spain

Ingo E. Isphording

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Stephen J. Machin

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Jenifer Ruiz-Valenzuela

London School of Economics & Political Science (LSE)

Houghton Street
London, WC2A 2AE
United Kingdom

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