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

Kathryn Anne Edwards; Jeffrey B. Wenger

Open Access

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

Kathryn Anne Edwards

and

Jeffrey B. Wenger

| Jul 05, 2019

IZA Journal of Labor Economics

Volume 8 (2019): Issue 1 (June 2019)

About this article

Cite

Page range: -

DOI: https://doi.org/10.2478/izajole-2019-0001

Keywords
Unemployment, intervivos transfers, retirement security, consumption, female labor supply

© 2019 Kathryn Anne Edwards, Jeffrey B. Wenger published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Year of Birth of Three Age Groups of MothersSource: Author’s Analysis of PSID data, 1985-2013. Mom group 1 are mothers who are age 62 and less, mom group 2 are mothers who are 62-70, and mom group 3 are mothers who are 70 and older. Mothers can transition between groups.

Age of Unemployed Child and Matched MothersSource: Author’s Analysis of PSID data, 1985-2013. Not included in unemployed children and individuals whose unemployment coincided with final year of schooling.

Coefficient Estimates, Regression of Transfers Sent to Child on Child’s UnemploymentSource: Author’s Analysis of PSID data, 1985-2013. Figure shows coefficient estimates from a regression of the dollar amount of transfers sent to children in a year on the time path of an unemployment spell.

Coefficient Estimates, Regression of Log Household Food Consumption on Child’s UnemploymentSource: Author’s Analysis of PSID data, 1985-2013. Figure shows coefficient estimates from a regression of the household’s usual log food consumption in a year on the time path of an unemployment spell.

Coefficient Estimates, Regression of Mother’s Annual Weeks Employed on Child’s UnemploymentSource: Author’s Analysis of PSID data, 1985-2013. Figure shows coefficient estimates from a regression of the weeks employed in a year on the time path of an unemployment spell.

Coefficient Estimates, Regression of Mother’s Average Pension Contribution Share on Child’s UnemploymentSource: Author’s Analysis of PSID data, 1999-2013. Figure shows coefficient estimates from a regression of the average share of income contributed to a retirement account in a year on the time path of an unemployment spell. In 1999, survey became biennial, hence the years are now spaced two years apart.

Coefficient Estimates, Regression of Mother’s Vehicle Value on Child’s UnemploymentSource: Author’s Analysis of PSID data, 1999-2013. Figure shows coefficient estimates from a regression of total household vehicle value on the time path of an unemployment spell. In 1999, survey became biennial, hence the years are now spaced two years apart.

Age Pairs of Mother and Unemployed ChildSource: Author’s Analysis of PSID data, 1985-2013.

Share of Mothers Reporting a Transfer Sent to a Child, Average by AgeSource: Author’s Analysis of PSID data, 1985-2013.

Size of Reported Transfers Sent to a Child, Average by AgeSource: Author’s Analysis of PSID data, 1985-2013. Transfers shown in $2014

Usual Household Food Consumption, Average by AgeSource: Author’s Analysis of PSID data, 1985-2013.

Histogram of Mother’s Weeks Employed Per YearSource: Author’s Analysis of PSID data, 1985-2013. Figure shows the weeks worked per year for all mothers in the sample, including non-working mothers.

Histogram of Mother’s Weeks Employed Per Year, Conditional on Positive WeeksSource: Author’s Analysis of PSID data, 1985-2013. Figure shows the weeks worked per year for all mothers in the sample, excluding any mothers who did not work in a year.

Histogram of Mother’s Hours per Week, Conditional on Positive HoursSource: Author’s Analysis of PSID data, 1985-2013. Figure shows the usual hours worked per week for all mothers in the sample, excluding any mothers who did not work in a year.

Share of Individuals in Households with Social Security Income, by AgeSource: Author’s Analysis of PSID data, 1985-2013. Given variable construction, figure indicates if individual is in a household with SSA income, not necessarily receiving SSA income themselves.

Share of Individuals in Households with SNAP Benefits, by AgeSource: Author’s Analysis of PSID data, 1985-2013.

Share of Individuals Contributing to Pension, by AgeSource: Author’s Analysis of PSID data, 1999-2013.

Conditional Share of Income Contributed to a Pension, Average by AgeSource: Author’s Analysis of PSID data, 1999-2013. Figure shows the share of income contributed to a pension, conditional on positive contribution.

Histogram of Observed IRA WealthSource: Author’s Analysis of PSID data, 1999-2013. Amounts in $2014

Histogram of Observed Vehicle WealthSource: Author’s Analysis of PSID data, 1999-2013. Amounts in $2014

Select Coefficient Estimates from Event Study of Child Unemployment

	Transfer Sent (Dummy)	Household Food ($ Amount)	Hours Per Week (Mother)	Any SSA Income (Dummy)	IRA Value ($2014)
Three Years Prior omitted		53.624	0.002	0.002
		63.071	0.004	0.006
Two Years Prior	-0.003	-92.137	0.009	0.003
	0.004	47.369	0.005	0.004
One Year Prior	0.004
	0.004
Year of Spell	0.017***	-247.932***	0.005	0.005
	0.004	49.094	0.004	0.004
One Year Following	0.006	-99.408	-0.004	-0.004
	0.004	58.54	0.005	0.005
Two Years Following	0.006	-182.690***	-0.003	-0.003
	0.004	47.453	0.004	0.004
Three Years Following	0.002	1.45	-0.005	-0.006
	0.004	62.927	0.006	0.006
Six Years Prior					-1681.603
					1866.971
Four Years Prior					4238.236**
					1631.711
Two Years Prior
Year of Spell					-404.534
					1766.55
Two Years Following					-1978.394
					1739.658
Four Years Following					-3165.834
					1954.675
Six Years Following					-473.223
					1936.578
X_pt and X_ct	Yes	Yes	Yes	Yes	Yes
Age & Year FE	Yes	Yes	Yes	Yes	Yes
Individual FE	Yes	Yes	Yes	Yes	Yes
N	38004	38004	38004	38004	15242

Summary of Mothers, by Age

	All N=38004	Moms Age < 62 N=23885	Moms Age 62-70 N=7972	Moms Age >70 N=6147
Age	59.6	50.1	65.7	78.6
White	0.772	0.762	0.851	0.804
Black	0.127	0.133	0.073	0.136
High School or Less	0.575	0.545	0.736	0.834
Some College or More	0.423	0.453	0.256	0.166
Married	0.594	0.659	0.651	0.383
Divorced/Sep.	0.201	0.240	0.197	0.105
Never Married	0.040	0.062	0.012	0.007
Widow	0.165	0.039	0.139	0.506
Disabled	0.044	0.055	0.031	0.028
Housewife	0.136	0.121	0.142	0.172
Working	0.492	0.703	0.336	0.082
Sent Transfer to Kid	0.070	0.085	0.068	0.035
Size of Transfer to Kid	$329	$373	$344	$206
Received Transfer	0.059	0.069	0.037	0.052
Size of Received Transfer	$187	$227	$101	$154
Usual Food Consumption	$7196	$8060	$7124	$5060
Family Size	2.370	2.730	1.890	1.560
Per Capita Food Consumption	$4808	$4738	$5361	$4430
Hours Per Week	19.8	27.5	10.0	2.3
Weeks Worked	25.0	35.3	17.7	4.7
Receiving SSA Income	0.458	0.138	0.840	0.966
Receiving SNAP	0.070	0.093	0.044	0.032
Contribute to a Pension	0.079	0.122	0.034	0.005
Percent of Income Cont.	0.006	0.009	0.003	0.0003
Ever Contributed to Pension	0.222	0.321	0.149	0.027
Vehicle Value	$16851	$18320	$18972	$11437
IRA Value	$65123	$47195	$111975	$73405

Summary of Adult Children in the Year of Unemployment, by Age of Mother

	All N=9236	With Moms Age <62 N=6259	With Moms Age 62-70 N=2066	With Moms Age >70 N=911
Age	32.2	28.8	37.1	44.9
Female	0.509	0.517	0.488	0.501
Male	0.491	0.483	0.512	0.499
With Minors	0.727	0.771	0.672	0.543
Married	0.464	0.450	0.494	0.488
Same State	0.821	0.832	0.809	0.774
Kid more educated that mother	0.541	0.502	0.620	0.631
Concurrent w/disability	0.006	0.004	0.010	0.019
Concurrent w/new child	0.097	0.111	0.080	0.041
Concurrent w/divorce	0.101	0.104	0.100	0.085
Concurrent w/sibling unemp.	0.308	0.309	0.317	0.285
Displaced	0.277	0.278	0.279	0.261
Layoff	0.187	0.194	0.181	0.154
Firm Closing	0.044	0.420	0.054	0.041
Voluntary	0.261	0.291	0.216	0.153
Not Known	0.477	0.446	0.518	0.595
Worked FT previously	0.592	0.576	0.617	0.643
Unemp. Spell <26 weeks	0.728	0.741	0.716	0.661
Remain in LF after spell	0.758	0.761	0.760	0.737

Select Results from Regressions of Mothers’ Outcomes on Child Unemployment Indicator, Varied by Spell Features and Mother Characteristics

	Hours Per Week (Mother)	Any SSA Income (Dummy)	Pension Contribution (% of Income)	Vehicle Value ($2014)	IRA Value ($2014)
Reason for Unemp
Displacement	-0.085 0.222	0.006 0.006	-0.016 0.081	-609.951 411.754	873.839 2483.971
Voluntary	0.166	0.004	-0.009	496.037	1885.715
	0.223	0.006	0.077	521.466	2708.635
Not known	0.042	0.002	-0.078	-234.815	-882.662
	0.183	0.005	0.05	288.635	1859.501
Labor Supply Before Spell
In school	-0.191	-0.005	0.062	-965.514	-2413.764
	0.593	0.015	0.162	958.416	5344.529
Working	0.271	0.007	-0.121*	-167.978	-1454.786
	0.224	0.007	0.056	388.189	2528.836
(Re)Entry spell	0.013	-0.003	-0.079	-599.676	1211.68
	0.331	0.007	0.082	453.678	2603.126
Duration of Spell
Less than 4 weeks	-0.081	0.006	-0.063	-848.764	-1927.471
	0.223	0.006	0.072	460.423	2801.018
5 - 25 weeks	0.156	0.006	-0.078	-67.61	-81.938
	0.177	0.005	0.052	300.077	1829.726
26 weeks or more	-0.036 0.246	0.004 0.007	0.035 0.061	-636.967 351.531	-249.583 2172.317
Labor Supply After Spell
Remain in LF	0.08	0.007	-0.042	-457.824	63.698
	0.152	0.005	0.049	278.039	1821.423
Exit LF	-0.12	0.003	-0.085	125.597	-201.137
	0.254	0.007	0.063	390.191	2112.369

Age of Mother
<62 years old	-0.034	0.011*	-0.136*	-629.627*	1193.747
	0.181	0.005	0.062	323.912	1938.567
62 - 70 years old	0.247	-0.013	0.09	59.071	-11955.068**
	0.295	0.011	0.103	589.662	4364.769
>70 years old	0.328 0.353	-0.002 0.01	0.024 0.033	756.538 501.562	4062.347 3578.795
Mother’s Work Status
Working Mom	1.103***	0.034	-0.008	-1791.323	-270.684
	0.225	0.078	0.005	1974.127	350.927
Not Working Mom	-0.114	0.153*	0.007	-928.61	-330.582
	0.200	0.068	0.006	2767.183	350.957
Number of Kids Unemp
Multiple	-0.264	0.009	0.025	-67.433	968.341
	0.338	0.01	0.082	605.542	3121.918
Single	0.097	0.005	-0.076	-347.493	-508.813
	0.149	0.004	0.048	270.376	1702.294

Sample Drops

Target	PSID Group	N (person-year)
(i.) Individuals with annual labor force measures	Heads and Spouses	410,524
(iia.) Potential children	Person number of mom is given	314,200
(iib.) Potential mothers	Female who indicates she has/ had children	172,032

(iii.) Matched observations	(iia.) = (iib.)	52,653
(iv.) Matched Moms	All observations of mother has a matched child	117,843
(v.) Years with transfer recipient info	1985-2013	69,541
(vi.) Kids living separately		38,004

Summary of Women 40-80 years old in the PSID by child match and motherhood

	Matched Moms N=35919	Unmatched Moms N=27375	Remaining Women N=8791
Age	62.0	51.3	56.7
Min Observed Age	34.9	29.6	35.5
Max Observed Age	68.0	57.8	61.0
White	0.744	0.709	0.738
Black	0.134	0.115	0.104
High School or Less	0.696	0.432	0.371
Some College or More	0.298	0.565	0.604
Married	0.596	0.676	0.443
Divorced/Sep.	0.194	0.196	0.118
Never Married	0.029	0.053	0.333
Widow	0.180	0.074	0.106
Disabled	0.045	0.030	0.062
Housewife	0.145	0.132	0.086
Working	0.456	0.671	0.587
Sent Transfer to Kid	0.072	0.041	0.037
Size of Transfer to Kid	$336	$214	$198
Received Transfer	0.051	0.073	0.059
Size of Received Transfer	$159	$287	$216
Weeks Worked	23.2	33.1	28.6
Weeks Unemployed	1.1	1.6	1.0
Receiving SSA Income	0.510	0.207	0.322
Receiving SNAP	0.061	0.063	0.048
Usual Food Consumption	$6904	$9235	$6576
Contribute to a Pension	0.071	0.110	0.125
Percent of Income Cont.	0.537	0.784	1.025
Ever Contributed to Pension	0.204	0.296	0.283
Vehicle Value	$17,181	$18,037	$16,536
IRA Value	$69,016	$40,668	$62,113

Results from Regressions of Mother Outcomes on Child Unemployment Indicator

	Pension Contribution (Dummy)	Stock Value ($2014)	Debt Value ($2014)	Home Value ($2014)
Unemp Kid	-0.002	-1513.996	454.556	1561.479
	0.005	1666.428	255.919	1403.293
Child Controls Kid Becomes Disabled	0	2626.709	1166.494*	-5197.965
	0.008	4438.054	520.158	2718.213
Kid Gets Married	0	789.654	19.885	85.658
	0.007	2298.371	314.955	1558.143
Kid Gets Divorced	-0.009	-4895.298	389.929	924.424
	0.007	2614.122	376.085	1974.571
Kid has a Kid	0.013	278.443	-283.017	913.566
	0.007	2205.188	286.884	1607.339
Mother Controls Unemp in Mom‘s HH	-0.018	70.956	339.314	-350.68
	0.011	3505.753	716.126	2961.22
Partnered	-0.036	19356.652	-1086.066	54720.251***
	0.049	15887.211	2723.026	14534.935
Divorced/Sep	-0.012	14333.635	-2919.139	41898.055**
	0.049	15451.726	2687.231	14323.284
Never Married	-0.042	10205.989	-1909.768	7158.833
	0.053	15374.619	2933.508	15570.792
Widow	-0.043	15397.166	-1398.312	47426.496**
	0.049	15707.192	2731.242	14577.005
Housewife	0.007	16.673	-570.592	4878.95
	0.006	2940.404	514.792	2624.946
Retired	-0.007	-2265.561	-1008.653	5290.923
	0.008	3774.213	536.777	2940.598
Disabled	-0.004	55.829	581.966	-3280.404
	0.008	3601.853	640.836	3117.021
Working	0.058***	-4727.845*	-922.344	768.266
	0.008	2228.33	510.185	2216.697
State UR	-0.002	-29.477	-51.83	-6495.694***
	0.002	898.708	124.402	779.443
Year & Age FE	Yes	Yes	Yes	Yes
Individual FE	Yes	Yes	Yes	Yes
N	15242	15242	12903	15242

Main Coefficient Estimates, Adjusted by Sequential Addition of Controls

	No Controls	Individual Fixed Effects	Year and Age Controls	Mother Controls	Child Controls	Ever Unemp Only	Ever Xfer Only
Transfer Sent	0.013***	0.020***	0.018***	0.018***	0.018***	0.018***	0.041***
(Dummy)	0.003	0.003	0.003	0.004	0.004	0.004	0.009
Transfer Sent	8.53	87.052***	67.379**	76.464**	77.561**	77.364**	169.893**
($ Amount)	19.649	22.081	22.875	25.563	25.559	25.675	60.202
Household Food	86.449	-331.010*	-287.719***	-257.769***	-254.045***	-254.947***	-363.754***
($ Amount)	130.911	160.788	47.062	49.334	49.415	49.453	73.565
Household Food	-0.100***	-0.039***	-0.047***	-0.041***	-0.041***	-0.041***	-0.046***
(Log)	0.008	0.008	0.008	0.008	0.008	0.008	0.012
Weeks worked	-0.589*	0.613*	-0.136	0.379*	0.380*	0.371*	0.659**
	0.272	0.241	0.217	0.162	0.162	0.162	0.237
Hours per week	-0.521*	0.699***	0.062	0.052	0.058	0.058	0.159
	0.171	0.205	0.189	0.147	0.147	0.147	0.236
Any SSA income	-0.033***	-0.026***	0.002	0.005	0.005	0.005	0.005
	0.006	0.006	0.004	0.004	0.004	0.004	0.007
Pension cont.	-0.177***	-0.034	-0.062	-0.066	-0.068	-0.07	-0.099
	0.045	0.039	0.04	0.047	0.047	0.047	0.084
Vehicle value	-2918.407***	-458.103*	-411.898	-335.144	-324.563	-318.569	-660.155
	281.631	225.372	233.06	264.927	265.048	266.08	384.992
IRA value	-10093.551***	1809.03	73.393	-289.506	-387.872	-345.395	-1367.046
	1892.288	1432.179	1481.23	1660.82	1666.556	1667.105	2873.747

eISSN:: 2193-8997
Language:: English

Publication timeframe:: Volume Open
Journal Subjects:: Business and Economics, Political Economics, Microeconomics, Macroecomics, Economic Policy, Mathematics and Statistics for Economists, Econometrics

Journal RSS Feed

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

Published Online: Jul 05, 2019

Page range: -

DOI: https://doi.org/10.2478/izajole-2019-0001

Keywords
Unemployment, intervivos transfers, retirement security, consumption, female labor supply

© 2019 Kathryn Anne Edwards, Jeffrey B. Wenger published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Figure 6

Figure 7

Figure A1

Figure A2

Figure A3

Figure A4

Figure A5

Figure A6

Figure A7

Figure A8

Figure A9

Figure A10

Figure A11

Figure A12

Figure A13

Select Coefficient Estimates from Event Study of Child Unemployment

Summary of Mothers, by Age

Summary of Adult Children in the Year of Unemployment, by Age of Mother

Select Results from Regressions of Mothers’ Outcomes on Child Unemployment Indicator, Varied by Spell Features and Mother Characteristics

Sample Drops

Summary of Women 40-80 years old in the PSID by child match and motherhood

Results from Regressions of Mother Outcomes on Child Unemployment Indicator

Main Coefficient Estimates, Adjusted by Sequential Addition of Controls

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

Published Online: Jul 05, 2019

Page range: -

DOI: https://doi.org/10.2478/izajole-2019-0001

KeywordsUnemployment, intervivos transfers, retirement security, consumption, female labor supply

© 2019 Kathryn Anne Edwards, Jeffrey B. Wenger published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 Public License.

Figure 1

Figure 2

Figure 3

Figure 4

Figure 5

Figure 6

Figure 7

Figure A1

Figure A2

Figure A3

Figure A4

Figure A5

Figure A6

Figure A7

Figure A8

Figure A9

Figure A10

Figure A11

Figure A12

Figure A13

Select Coefficient Estimates from Event Study of Child Unemployment

Summary of Mothers, by Age

Summary of Adult Children in the Year of Unemployment, by Age of Mother

Select Results from Regressions of Mothers’ Outcomes on Child Unemployment Indicator, Varied by Spell Features and Mother Characteristics

Sample Drops

Summary of Women 40-80 years old in the PSID by child match and motherhood

Results from Regressions of Mother Outcomes on Child Unemployment Indicator

Main Coefficient Estimates, Adjusted by Sequential Addition of Controls

Keywords
Unemployment, intervivos transfers, retirement security, consumption, female labor supply