Is a sorrow shared a sorrow doubled? Parental unemployment and the life satisfaction of adolescent children

Abstract

This paper examines the possible spillover effects of parental unemployment on the subjective well-being of 12- to 21-year-old children. Using German panel data (SOEP), we show that unemployment of fathers and mothers is negatively associated with their children’s life satisfaction. When controlling for time-invariant individual heterogeneity, our results suggest that maternal unemployment has adverse effects, while we cannot detect an effect of fathers’ unemployment. We do not find strong evidence for differential impacts between sons and daughters or younger and older children in subgroup analyses. Further results suggest that the effect of parental unemployment differs between high- and low-unemployment regions.