Parental unemployment and children's happiness: a longitudinal study of young people's well-being in unemployed households

Using a unique longitudinal data of British youths we estimate how adolescents' overall happiness is related to parents' exposure to unemployment. Our within-child estimates suggest that parental job loss when the child was relatively young has a positive influence on children's overall happiness. However, this positive association became either strongly negative or statistically insignificant as the child grew older. The estimated effects of parental job loss on children's happiness also appear to be unrelated to its effect on family income, parent-child interaction, and children's school experience. Together these findings offer new psychological evidence of unemployment effects on children's livelihood.