The Long-term Impact of Children's Disabilities on Families

Snaebjorn Gunnsteinsson, Herdis Steingrimsdottir

Publikation: Working paperForskning

Resumé

Childhood disability is a major health shock that affects parents early in their working life. We estimate its impact on parents’ career trajectories, their balance sheets, and major life decisions using detailed register data from Denmark. To identify the causal effect of childhood disability we use an event study approach, where we control for a rich set of pre-birth variables and focus on conditions that have no or weak associations with socioeconomic determinants. We find that having a child with a disability has strong negative impact on mothers’ earnings. The effect is persistent and the wage penalty appears to grow over time. Fathers’ earnings are also affected but the impact is notably smaller. We find that both parents are less likely to be employed in the long run and are less likely to ascend to top executive positions. The long-term structure of the household is also affected as subsequent fertility is lower and partnership dissolution is more common. Finally, despite this financial shock, long term net worth of families is not affected or may be positively affected, potentially due to help from government transfers and lower cost associated with having fewer other children, or due to a stronger savings motive for the long term care of the disabled child.
OriginalsprogEngelsk
Udgivelses stedFrederiksberg
UdgiverDepartment of Economics, Copenhagen Business School
Antal sider49
StatusUdgivet - 2019
NavnWorking Paper / Department of Economics. Copenhagen Business School
Vol/bind6-2019

Emneord

  • Disability
  • Children
  • Child
  • Insurance
  • Earnings
  • Income
  • Labor force participation
  • Fertility

Citer dette

Gunnsteinsson, S., & Steingrimsdottir, H. (2019). The Long-term Impact of Children's Disabilities on Families. Frederiksberg: Department of Economics, Copenhagen Business School. Working Paper / Department of Economics. Copenhagen Business School, Bind. 6-2019
Gunnsteinsson, Snaebjorn ; Steingrimsdottir, Herdis. / The Long-term Impact of Children's Disabilities on Families. Frederiksberg : Department of Economics, Copenhagen Business School, 2019. (Working Paper / Department of Economics. Copenhagen Business School, Bind 6-2019).
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Gunnsteinsson, S & Steingrimsdottir, H 2019 'The Long-term Impact of Children's Disabilities on Families' Department of Economics, Copenhagen Business School, Frederiksberg.

The Long-term Impact of Children's Disabilities on Families. / Gunnsteinsson, Snaebjorn; Steingrimsdottir, Herdis.

Frederiksberg : Department of Economics, Copenhagen Business School, 2019.

Publikation: Working paperForskning

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AU - Steingrimsdottir, Herdis

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N2 - Childhood disability is a major health shock that affects parents early in their working life. We estimate its impact on parents’ career trajectories, their balance sheets, and major life decisions using detailed register data from Denmark. To identify the causal effect of childhood disability we use an event study approach, where we control for a rich set of pre-birth variables and focus on conditions that have no or weak associations with socioeconomic determinants. We find that having a child with a disability has strong negative impact on mothers’ earnings. The effect is persistent and the wage penalty appears to grow over time. Fathers’ earnings are also affected but the impact is notably smaller. We find that both parents are less likely to be employed in the long run and are less likely to ascend to top executive positions. The long-term structure of the household is also affected as subsequent fertility is lower and partnership dissolution is more common. Finally, despite this financial shock, long term net worth of families is not affected or may be positively affected, potentially due to help from government transfers and lower cost associated with having fewer other children, or due to a stronger savings motive for the long term care of the disabled child.

AB - Childhood disability is a major health shock that affects parents early in their working life. We estimate its impact on parents’ career trajectories, their balance sheets, and major life decisions using detailed register data from Denmark. To identify the causal effect of childhood disability we use an event study approach, where we control for a rich set of pre-birth variables and focus on conditions that have no or weak associations with socioeconomic determinants. We find that having a child with a disability has strong negative impact on mothers’ earnings. The effect is persistent and the wage penalty appears to grow over time. Fathers’ earnings are also affected but the impact is notably smaller. We find that both parents are less likely to be employed in the long run and are less likely to ascend to top executive positions. The long-term structure of the household is also affected as subsequent fertility is lower and partnership dissolution is more common. Finally, despite this financial shock, long term net worth of families is not affected or may be positively affected, potentially due to help from government transfers and lower cost associated with having fewer other children, or due to a stronger savings motive for the long term care of the disabled child.

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Gunnsteinsson S, Steingrimsdottir H. The Long-term Impact of Children's Disabilities on Families. Frederiksberg: Department of Economics, Copenhagen Business School. 2019.