The effect of paternal and maternal unemployment on children’s education

Hannu Lehti, University of Turku
Aleksi Karhula, University of Turku
Jani Erola, University of Turku

The previous literature has shown mixed evidence on the effects of parental unemployment on children’s attainment. We study the intergenerational effects of paternal and maternal unemployment on children’s enrollment in higher education. We compare the effects according to the children’s age of exposure (at age 7-9, 10-12 and 13-15) and parental level of education (basic, secondary and tertiary). The topic is analyzed using Finnish register data on 28537 children in 13066 families, employing sibling fixed effect models. Our results suggest that parental unemployment has disadvantageous effects on children’s education achievement. Earlier exposure has more negative consequences than later. Both paternal and maternal unemployment have detrimental effects on children’s education, more clearly in the case of fathers than mothers. The results indicate that paternal higher education protects children from the disadvantageous effect of early paternal unemployment, while mother’s higher education strengthens the negative effect. On the other hand, at the older age, mother’s unemployment has positive effects on the educational attainment of the children of the low educated mothers. It seems that paternal education may compensate for the negative effects of his unemployment. For the low educated mothers the negative consequences of her unemployment are compensated by the higher involvement in upbringing.