Finance and Economics Discussion Series (FEDS)

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August 2019

Parental Proximity and Earnings After Job Displacements

Patrick Coate, Pawel Krolikowski, and Mike Zabek

Abstract:

The earnings of young adults who live in the same neighborhoods as their parents completely recover after a job displacement, unlike the earnings of young adults who live farther away, which permanently decline. Nearby workers appear to benefit from help with childcare since grandmothers are less likely to be employed after their child's job displacement and since the earnings benefits are concentrated among young adults who have children. The result also suggests that parental employment networks improve earnings. Differences in job search durations, transfers of housing services, and geographic mobility, however, are too small to explain the result.

Accessible materials (.zip)

Keywords: Adult Children, Childcare, Family ties, Job loss, Parents, Transfers

DOI: https://doi.org/10.17016/FEDS.2019.062

PDF: Full Paper

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Last Update: January 09, 2020