Parental Health, Aging, and the Labor Supply of Young Workers

74 Pages Posted: 17 Nov 2022 Last revised: 18 Aug 2023

See all articles by Sara Casella

Sara Casella

University of Pennsylvania

Luca Mazzone

International Monetary Fund (IMF)

Date Written: November 14, 2022


To what extent are young workers affected by health shocks that happen to their parents? This paper studies the short and long-term spillover effects of parents' adverse health events on their adult children. We use the unique structure of the Panel Survey on Income Dynamics (PSID) to build family networks and construct a measure of sudden health changes. Exploiting news on parents' health status, we provide evidence of the existence of family insurance in the form of time and monetary transfers, and of the importance of family ties in shaping labor market outcomes. Following the deterioration of parents' health, time spent helping them goes up, while wealth, income and hours worked by children significantly decline.

Funding Information: None.

Conflict of Interests: None.

Keywords: Health, Family, Insurance, Intergenerational Altruism, Labor

JEL Classification: J01, J12, D1, E2

Suggested Citation

Casella, Sara and Mazzone, Luca, Parental Health, Aging, and the Labor Supply of Young Workers (November 14, 2022). Available at SSRN: or

Sara Casella

University of Pennsylvania ( email )

133 South 36th Street
Perelman Building
Philadelphia, PA 19104
United States

Luca Mazzone (Contact Author)

International Monetary Fund (IMF) ( email )

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