IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/14505.html
   My bibliography  Save this paper

Intergenerational Transmission of Unemployment - Causal Evidence from Austria

Author

Listed:
  • Winter-Ebmer, Rudolf
  • Grübl, Dominik
  • Lackner, Mario

Abstract

We estimate the causal effect of parents' unemployment on unemployment among their children in their own adulthood. We use administrative data for Austrian children born between 1974 and 1984 and apply an instrumental variables (IV) identification strategy using parents' job loss during a mass layoff as the instrument. We find evidence of unemployment inheritance in the next generation. An additional day of unemployment during childhood causally raises the average unemployment days of the adult child by 1 to 2%. The greatest effects are observed for unmarried parents, young children, children of low-education parents, and in families living in capital cities. We also explore various channels of intergenerational unemployment, such as education, income, and job matching by parents.

Suggested Citation

  • Winter-Ebmer, Rudolf & Grübl, Dominik & Lackner, Mario, 2020. "Intergenerational Transmission of Unemployment - Causal Evidence from Austria," CEPR Discussion Papers 14505, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14505
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP14505
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eriksson, Tor & Bratsberg, Bernt & Raaum, Oddbjørn, 2005. "Earnings persistence across generations: Transmission through health?," Memorandum 35/2005, Oslo University, Department of Economics.
    2. Gordon B. Dahl & Lance Lochner, 2012. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," American Economic Review, American Economic Association, vol. 102(5), pages 1927-1956, August.
    3. Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
    4. Juan C. Palomino & Gustavo A. Marrero & Juan G. Rodríguez, 2019. "Channels of Inequality of Opportunity: The Role of Education and Occupation in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(3), pages 1045-1074, June.
    5. Jo Blanden, 2019. "Intergenerational income persistence," IZA World of Labor, Institute of Labor Economics (IZA), pages 176-176, January.
    6. Steffen Müller & Regina T. Riphahn & Caroline Schwientek, 2017. "Paternal unemployment during childhood: causal effects on youth worklessness and educational attainment," Oxford Economic Papers, Oxford University Press, vol. 69(1), pages 213-238.
    7. Bhashkar Mazumder, 2005. "Fortunate Sons: New Estimates of Intergenerational Mobility in the United States Using Social Security Earnings Data," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 235-255, May.
    8. Daniela Del Boca & Christopher Flinn & Matthew Wiswall, 2014. "Household Choices and Child Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 137-185.
    9. Erik Plug & Bas van der Klaauw & Lennart Ziegler, 2018. "Do Parental Networks Pay Off? Linking Children's Labor‐Market Outcomes to Their Parents' Friends," Scandinavian Journal of Economics, Wiley Blackwell, vol. 120(1), pages 268-295, January.
    10. Minchul Yum, 2023. "Parental Time Investment And Intergenerational Mobility," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(1), pages 187-223, February.
    11. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," American Economic Review, American Economic Association, vol. 95(1), pages 437-449, March.
    12. Gottschalk, Peter, 1996. "Is the correlation in welfare participation across generations spurious?," Journal of Public Economics, Elsevier, vol. 63(1), pages 1-25, December.
    13. Philip Oreopoulos & Marianne Page & Ann Huff Stevens, 2008. "The Intergenerational Effects of Worker Displacement," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 455-483, July.
    14. Antel, John J, 1992. "The Intergenerational Transfer of Welfare Dependency: Some Statistical Evidence," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 467-473, August.
    15. Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1265-1306.
    16. Paul Gregg & Lindsay Macmillan & Bilal Nasim, 2012. "The Impact of Fathers’ Job Loss during the 1980s Recession on their Child’s Educational Attainment and Labour Market Outcomes," The Centre for Market and Public Organisation 12/288, The Centre for Market and Public Organisation, University of Bristol, UK.
    17. Lindsey Macmillan, 2014. "Intergenerational worklessness in the UK and the role of local labour markets," Oxford Economic Papers, Oxford University Press, vol. 66(3), pages 871-889.
    18. Tyra Ekhaugen, 2009. "Extracting the causal component from the intergenerational correlation in unemployment," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(1), pages 97-113, January.
    19. Black, Sandra E. & Devereux, Paul J., 2011. "Recent Developments in Intergenerational Mobility," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 16, pages 1487-1541, Elsevier.
    20. Josef Zweim�ller & Rudolf Winter-Ebmer & Rafael Lalive & Andreas Kuhn & Jean-Philippe Wuellrich & Oliver Ruf & Simon B�chi, 2009. "Austrian social security database," IEW - Working Papers 410, Institute for Empirical Research in Economics - University of Zurich.
      • Josef Zweimüller & Rudolf Winter-Ebmer & Rafael Lalive & Andreas Kuhn & Jean-Philippe Wuellrich & Oliver Ruf & Simon Büchi, 2009. "Austrian Social Security Database," NRN working papers 2009-03, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    21. Christina Gathmann & Ines Helm & Uta Schönberg, 2020. "Spillover Effects of Mass Layoffs," Journal of the European Economic Association, European Economic Association, vol. 18(1), pages 427-468.
    22. Coelli, Michael B., 2011. "Parental job loss and the education enrollment of youth," Labour Economics, Elsevier, vol. 18(1), pages 25-35, January.
    23. Jones, Loring P., 1988. "The effect of unemployment on children and adolescents," Children and Youth Services Review, Elsevier, vol. 10(3), pages 199-215.
    24. Nicolas Hérault & Guyonne Kalb, 2016. "Intergenerational correlation of labor market outcomes," Review of Economics of the Household, Springer, vol. 14(1), pages 231-249, March.
    25. Huang, Jin, 2013. "Intergenerational transmission of educational attainment: The role of household assets," Economics of Education Review, Elsevier, vol. 33(C), pages 112-123.
    26. Lars Lefgren & Matthew J. Lindquist & David Sims, 2012. "Rich Dad, Smart Dad: Decomposing the Intergenerational Transmission of Income," Journal of Political Economy, University of Chicago Press, vol. 120(2), pages 268-303.
    27. FAN, Yi, 2016. "Intergenerational income persistence and transmission mechanism: Evidence from urban China," China Economic Review, Elsevier, vol. 41(C), pages 299-314.
    28. Paul Gregg & Lindsey Macmillan & Bilal Nasim, 2012. "The Impact of Fathers' Job Loss during the Recession of the 1980s on their Children's Educational Attainment and Labour Market Outcomes," Fiscal Studies, Institute for Fiscal Studies, vol. 33(2), pages 237-264, June.
    29. Yum, Minchul, 2016. "Parental time investment and intergenerational mobility," Working Papers 16-06, University of Mannheim, Department of Economics.
    30. Florian Wendelspiess Chávez Juárez, 2015. "Intergenerational transmission of education: the relative importance of transmission channels," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-44, December.
    31. Andrew Foote & Michel Grosz & Ann Stevens, 2019. "Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response," ILR Review, Cornell University, ILR School, vol. 72(1), pages 101-126, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bicakova, Alena & Kaliskova, Klara, 2022. "Is Longer Maternal Care Always Beneficial? The Impact of a Four-Year Paid Parental Leave," IZA Discussion Papers 15640, Institute of Labor Economics (IZA).
    2. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Gielen, Anne C., 2020. "The Intergenerational Effects of Requiring Unemployment Benefit Recipients to Engage in Non-Search Activities," IZA Discussion Papers 13618, Institute of Labor Economics (IZA).
    3. Jim Been & Anne C. Gielen & Marike Knoef & Gloria Moroni, 2022. "Prolonged worklife among grandfathers: Spillover effects on grandchildren's educational outcomes," Tinbergen Institute Discussion Papers 22-033/V, Tinbergen Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Steffen Müller & Regina T. Riphahn & Caroline Schwientek, 2017. "Paternal unemployment during childhood: causal effects on youth worklessness and educational attainment," Oxford Economic Papers, Oxford University Press, vol. 69(1), pages 213-238.
    2. Matteo Picchio & Michele Ubaldi, 2023. "Intergenerational Scars: The Impact Of Parental Unemployment On Individual Health Later In Life," Working Papers 478, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. Gimenez-Nadal, José Ignacio & Molina, José Alberto & Velilla, Jorge, 2020. "Short- vs Long-Term Intergenerational Correlations of Employment and Self-Employment in Europe," IZA Discussion Papers 12933, Institute of Labor Economics (IZA).
    4. Paul Bingley & Lorenzo Cappellari & Marco Ovidi, 2023. "When it hurts the most: timing of parental job loss and a child’s education," LISER Working Paper Series 2023-12, Luxembourg Institute of Socio-Economic Research (LISER).
    5. Di Maio, Michele & Nisticò, Roberto, 2019. "The effect of parental job loss on child school dropout: Evidence from the Occupied Palestinian Territories," Journal of Development Economics, Elsevier, vol. 141(C).
    6. Robert Lucas & Sari Kerr, 2013. "Intergenerational income immobility in Finland: contrasting roles for parental earnings and family income," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1057-1094, July.
    7. Gabriella Berloffa & Eleonora Matteazzi & Paola Villa, 2016. "Family background and youth labour market outcomes across Europe," Working Papers 393, ECINEQ, Society for the Study of Economic Inequality.
    8. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    9. Mäder Miriam & Riphahn Regina T. & Schwientek Caroline & Müller Steffen, 2015. "Intergenerational Transmission of Unemployment – Evidence for German Sons," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 355-375, August.
    10. Martti Kaila & Emily Nix & Krista Riukula, 2021. "Disparate Impacts of Job Loss by Parental Income and Implications for Intergenerational Mobility," Opportunity and Inclusive Growth Institute Working Papers 53, Federal Reserve Bank of Minneapolis.
    11. Uta Bolt & Eric French & Jamie Hentall-MacCuish & Cormac O'Dea, 2021. "The intergenerational elasticity of earnings: exploring the mechanisms," IFS Working Papers W21/07, Institute for Fiscal Studies.
    12. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2022. "Intergenerational disadvantage: Learning about equal opportunity from social assistance receipt," Labour Economics, Elsevier, vol. 79(C).
    13. Boll, Christina & Hoffmann, Malte, 2015. "It's not all about parents' education, it also matters what they do: Parents' employment and children's school success in Germany," HWWI Research Papers 162, Hamburg Institute of International Economics (HWWI).
    14. Nick Drydakis, 2023. "Parental unemployment and adolescents' academic performance," International Journal of Manpower, Emerald Group Publishing Limited, vol. 44(7), pages 1362-1381, February.
    15. Ruiz-Valenzuela, Jenifer, 2015. "Job loss at home: children’s school performanceduring the Great Recession in Spain," LSE Research Online Documents on Economics 63804, London School of Economics and Political Science, LSE Library.
    16. Jake Anders & Lindsey Macmillan, 2020. "The unequal scarring effects of a recession on young people's life chances," CEPEO Briefing Note Series 6, UCL Centre for Education Policy and Equalising Opportunities, revised Jun 2020.
    17. Gordon B. Dahl & Andreas Ravndal Kostøl & Magne Mogstad, 2014. "Family Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(4), pages 1711-1752.
    18. Bevis, Leah E.M. & Barrett, Christopher B., 2015. "Decomposing Intergenerational Income Elasticity: The Gender-differentiated Contribution of Capital Transmission in Rural Philippines," World Development, Elsevier, vol. 74(C), pages 233-252.
    19. Jake Anders & Andy Dickerson & Paul Gregg & Lindsey Macmillan, 2020. "Unemployment: The Coming Storm, Who Gets Hit, Who Gets Hurt, and Policy Remedies," CEPEO Working Paper Series 20-12, UCL Centre for Education Policy and Equalising Opportunities, revised Jul 2020.
    20. Duque, Valentina & Schmitz, Lauren L., 2020. "The Influence of Early-life Economic Shocks on Long-term Outcomes: Evidence from the U.S. Great Depression," Working Papers 2020-11, University of Sydney, School of Economics.

    More about this item

    Keywords

    Intergenerational transmission; Mass layoff; Unemployment duration; Instrumental variables;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:14505. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.