The Effect of Labor Market Shocks Across the Life Cycle

2021 ◽  
Author(s):  
Kjell G. Salvanes ◽  
Barton Willage ◽  
Alexander Willén
Keyword(s):  
Labor Market ◽  
Life Cycle ◽  
Labor Market Shocks ◽  
Market Shocks

The Effect of Labor Market Shocks Across the Life Cycle

2021 ◽  
Author(s):  
Kjell G. Salvanes ◽  
Barton Willage ◽  
Alexander Willén
Keyword(s):  
Labor Market ◽  
Life Cycle ◽  
Labor Market Shocks ◽  
Market Shocks

scholarly journals Parents with an Unemployed Adult Child: Consumption, Income, and Savings Effects

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
Kathryn Anne Edwards ◽  
Jeffrey B. Wenger
Keyword(s):  
Labor Market ◽  
Older Workers ◽  
Financial Support ◽  
Risk Sharing ◽  
Panel Study ◽  
Adult Child ◽  
Retirement Savings ◽  
Parent Outcomes ◽  
Labor Market Shocks ◽  
Market Shocks

AbstractThe risk of labor market, health, and asset-value shocks comprise profound retirement savings challenges for older workers. Parents, however, may experience added risk if their children experience adverse labor market shocks. Prior research has shown that parents support their children financially through an unemployment spell. In this paper, we also provide evidence of financial support from parents and investigate if this financial support is accompanied by adjustments to parental consumption, income, or savings behavior. With longitudinal data on mothers and children from the Panel Study of Income Dynamics, we use within-mother variation in behavior to identify the effect of a child’s labor market shock on parent outcomes. We find evidence of a decline in consumption, an increase in labor supply, and a decrease retirement savings, though the results are heterogenous among mothers. Our results point to aggregate inefficiencies and inequities that may result from family risk sharing.

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