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Parental Job Loss and Children’s Health: Ten Years after the Massive Layoff of the SOEs’ Workers in China

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  • Liu, Hong

    (Central University of Finance and Economics)

  • Zhao, Zhong

    (Renmin University of China)

Abstract

Beginning in the mid 1990s, China sped up its urban labor market reform and drastically restructured its state-owned enterprises (SOEs), which resulted in massive layoff of the SOEs' workers and a high unemployment rate. In this paper, we investigate the impact of the parents’ job loss on the health of their children, using six waves of the China Health and Nutrition Survey covering the period from 1991 to 2006. We find that paternal job loss has a significant negative effect on children's health, whilst maternal job loss has no significant effect. The rationale behind the findings is that the income loss resulting from maternal job loss is much smaller; at the same time, the unemployed mothers are likely to increase the time they devote to care of their children, and this may alleviate the negative effect resulting from maternal job loss. Our findings are robust to various specifications.

Suggested Citation

  • Liu, Hong & Zhao, Zhong, 2011. "Parental Job Loss and Children’s Health: Ten Years after the Massive Layoff of the SOEs’ Workers in China," IZA Discussion Papers 5846, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5846
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    Cited by:

    1. H. Lehmann & T. Razzolini & A. Zaiceva, 2011. "Job Separations, Job Loss and Informality in the Russian Labor Market," Working Papers wp800, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Lehmann, Hartmut & Razzolini, Tiziano & Zaiceva, Anzelika, 2011. "Job Separations and Informality in the Russian Labor Market," IZA Discussion Papers 6230, Institute of Labor Economics (IZA).
    3. Mörk, Eva & Sjögren, Anna & Svaleryd, Helena, 2020. "Consequences of parental job loss on the family environment and on human capital formation-Evidence from workplace closures," Labour Economics, Elsevier, vol. 67(C).
    4. Sarah Cattan & Christine Farquharson & Sonya Krutikova & Andrew McKendrick & Almudena Sevilla, 2023. "Parental labour market instability and children's mental health during the pandemic," IFS Working Papers W23/21, Institute for Fiscal Studies.
    5. Jessamyn Schaller & Mariana Zerpa, 2019. "Short-Run Effects of Parental Job Loss on Child Health," American Journal of Health Economics, MIT Press, vol. 5(1), pages 8-41, Winter.
    6. Hansen, Kerstin F. & Stutzer, Alois, 2022. "Parental unemployment, social insurance and child well-being across countries," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 600-617.
    7. Marianne Page & Jessamyn Schaller & David Simon, 2019. "The Effects of Aggregate and Gender-Specific Labor Demand Shocks on Child Health," Journal of Human Resources, University of Wisconsin Press, vol. 54(1), pages 37-78.
    8. Mörk, Eva & Sjögren, Anna & Svaleryd, Helena, 2019. "Consequences of parental job loss on the family environment and on human capital formation - Evidence from plant closures," Working Paper Series 2019:7, Uppsala University, Department of Economics.
    9. Feng, Jin & Wang, Zitai & Xie, Qiang, 2023. "Does trade liberalization improve child health? Evidence from China," China Economic Review, Elsevier, vol. 82(C).
    10. Yuhao Ge & Hartmut Lehmann, 2013. "The costs of worker displacement in urban labor markets of China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    11. Ren, Weiwei & Rammohan, Anu & Wu, Yanrui, 2014. "Is there a gender gap in child nutritional outcomes in rural China?," China Economic Review, Elsevier, vol. 31(C), pages 145-155.
    12. Nancy Kong & Lars Osberg & Weina Zhou, 2018. "The Shattered “Iron Rice Bowl”— Intergenerational Effects of Economic Insecurity During Chinese State-Owned Enterprise Reform," Discussion Papers Series 595, School of Economics, University of Queensland, Australia.
    13. Janneke Pieters & Samantha Rawlings, 2020. "Parental unemployment and child health in China," Review of Economics of the Household, Springer, vol. 18(1), pages 207-237, March.
    14. Fu, Wentao & Zhu, Feng & Cheng, Yao, 2023. "Gender differences in intergenerational effects of laid-off parents," Economic Systems, Elsevier, vol. 47(4).
    15. Mörk, Eva & Sjögren, Anna & Svaleryd, Helena, 2019. "Parental job loss and child human capital in the short and long run," Working Paper Series 2019:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    16. Daniel Berkowitz & Hong Ma & Shuichiro Nishioka, 2017. "Recasting the Iron Rice Bowl: The Reform of China's State-Owned Enterprises," The Review of Economics and Statistics, MIT Press, vol. 99(4), pages 735-747, July.
    17. Melanie Borah & Andreas Knabe & Christine Lücke, 2023. "Is a Sorrow Shared a Sorrow Doubled? Parental Unemployment and the Life Satisfaction of Adolescent Children," CESifo Working Paper Series 10776, CESifo.
    18. Tian, Xinping & Gong, Jinquan & Zhang, Yueqiu, 2018. "The effects of job displacement on health: Evidence from the economic restructuring in urban China," China Economic Review, Elsevier, vol. 52(C), pages 136-150.
    19. Hartmut Lehmann, 2014. "Worker displacement in transition economies and in China," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-20, May.
    20. Lee, Y-W.;, 2019. "Effects of Parental Job Loss and Insecurity on Children’s Health: Evidence from Korea," Health, Econometrics and Data Group (HEDG) Working Papers 19/09, HEDG, c/o Department of Economics, University of York.
    21. Tian, Xinping & Gong, Jinquan & Zhai, Zhe, 2022. "The effect of job displacement on labor market outcomes: Evidence from the Chinese state-owned enterprise reform," China Economic Review, Elsevier, vol. 72(C).
    22. Yong‐Woo Lee, 2022. "How do changes to parental job insecurity affect children's health?," Bulletin of Economic Research, Wiley Blackwell, vol. 74(1), pages 5-24, January.
    23. Riukula, Krista, 2024. "Childhood Shocks and Fertility: Evidence from Parental Job Loss," ETLA Working Papers 112, The Research Institute of the Finnish Economy.

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    More about this item

    Keywords

    Grossman’s model; children’s health; China; job loss;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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