Abstract

This study analyzes whether and how the event of a job loss in families with children changes family arrangements. Comparing outcomes for children whose parents become unemployed with children whose parents do not, we find a positive relationship between a parents job loss and destabilizing changes in family arrangements in subsequent months for children initially living with married parents, a single mother, or a mother cohabiting with a partner. Among single mothers, these negative consequences are concentrated among those with no high school degree.

For families, unemployment can mean more than just the loss of a job and resources. As parents struggle to make ends meet, instability can strain parents’ and children’s relationships and harm their overall well-being. Economic and psychological stress can lead to changes in housing or family structure that may have long-lasting adverse effects on children’s development.

Key findings

• Across the board, stability is lower for children with unemployed parents. The likelihood of a significant destabilizing change decreases as parents get older, however, regardless of family type.

• Children in families with unemployed parents are more likely to be Hispanic or black. They are also less likely to live with parents who have college degrees.

• Unemployed parents are less likely to be married. Stability across all family types is lower, however, in families with parents who have experienced unemployment. Families with married parents and single mothers provide the most stable living arrangements for children.

• Households with unemployed parents have lower earnings before unemployment than those who remain employed.

• Black parents are more likely to see their marriages dissolve than white parents. Black mothers are less likely than whites to transition out of single motherhood.

• Family structures tend to follow the same transitions regardless of parents’ employment. Households with married parents tend to change to households with single mothers. Transitioning single mothers are more likely to marry than cohabit. Families with unmarried parents may become families with married parents, but are also likely to transition to single-mother households. Cohabiting mothers are more likely to become single than to marry.

Key numbers

• Approximately one-third of children experienced parental unemployment at some point in the three- to four-year study period.

• Ninety-nine percent of children with employed married parents and ninety-seven percent of children with unemployed married parents were in the same living arrangement 13 months later.

• Ninety-four percent of children with employed single mothers and ninety-one percent of children with unemployed single mothers were in the same living arrangement 13 months later.

Policy recommendations

• Government programs geared toward the unemployed could include services that help stabilize families with young children, such as psychological counseling performed by social workers.

• Unemployment insurance and the Temporary Assistance for Needy Families program would be especially well-suited to target resources toward families with young children, including counselling services. Some states give higher benefits to families with dependents; expansion of such dependent allowances could help buffer the effects of income loss.

• States could make eligibility requirements for unemployment insurance less stringent for families with young children. For example, eligibility could be extended to those seeking part-time work.