The effects of parental death and health shocks on children’s outcomes

Nearly everyone experiences the death of a parent, but this loss can occur at different stages of people’s
lives. Parental death affects children differently depending on the age of the children: in preliminary
work, we find that parental death has long-term impacts on the labour market outcomes of both young
and adult children, but that the effects vary substantially over the life cycle. Although one cannot
prevent people from dying, the negative effects of parental death and illness can be mediated by
appropriately targeted (perhaps age-specific) policy interventions. Creating policies capable of
ameliorating the effects of parental death, however, depends crucially on understanding the mechanisms
through which parental death and illness affect children’s labour market outcomes. For example, losing
a parent during childhood may alter children’s labour market trajectories by affecting their mental health,
academic success and choice of study. The mechanisms through which parental death and health shocks
affect children’s labour market outcomes are only poorly understood in the current literature. By
shedding more light on these mechanisms and understanding the degree to which these “middle year”
effects predict later life outcomes, our project seeks to guide policymakers.