Urban Wire Lose your job, lose your family: How unemployment affects family stability
Stephan Lindner
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Family stability is crucial for children's health development. That's why many people at the Urban Institute, like my colleagues Gina Adams and Margaret Simms, have been working on understanding the sources of instability, how that instability affects children, and what we can do about it.

In a newly released report, my colleague Elizabeth Peters and I have looked at what happens to families when a parent becomes unemployed. We focused on the year following a job loss for families with children under age 10. Our results suggest that families become more unstable when one parent loses a job.

Perhaps the most striking finding is for children with married parents: in such families, the risk of a divorce roughly doubles when a parent loses a job.

Job loss is also bad news for children of single mothers. These children are at a higher risk of not living with their mother during the year following her job loss compared with children with single mothers who are employed. This elevated risk seems to be concentrated among single mothers with no high school degree.

While our data cannot tell us why these instabilities arise, we know that losing a job is a very stressful event. It means less money, a potentially lengthy job search, and, often, diminished self-esteem. Such stress in turn can destabilize family bonds. An important question is what we can do to support parents who lose their jobs—and the answer might be to use creative solutions to augment existing work support policies.

Government programs, most notably Unemployment Insurance and Temporary Assistance for Needy Families, provide often crucial income support for young families hit by unemployment. However, based on our research, we think that there are policy options that could make these programs even more effective for such families. These include:

  • Counselling services: Aside from providing cash benefits, the government also could provide funding to support programs offering psychological counselling to the unemployed parent and other family members, including children. Such counselling could help family members cope with the new situation and thereby reduce stress in the household.
  • Expanded benefits: Part-time workers who become unemployed are often not eligible for Unemployment Insurance benefits. Allowing them to receive such benefits could be especially helpful for families with young children, where part-time work is prevalent. Although expanding unemployment insurance costs more money, the benefits of doing so—ensuring greater stability for children—could outweigh these costs.
  • Modify work requirements: Both programs encourage non-working recipients to find employment. Such requirements can provide incentives to get out and find work, but they can also add to existing stress, especially if parents don’t have child care. Therefore, it might be more helpful to reduce such requirements for some beneficiary groups, like young families, and provide child care subsidies for those who continue to seek employment.

These options could help mitigate the stress of job loss on families and provide some stability for children during a difficult time.

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Research Areas Families Children and youth Child welfare
Tags Family and household data Employment and income data Child support Family structure Child care Wages and nonwage compensation Child welfare Economic well-being Labor force Parenting Unemployment and unemployment insurance Work-family balance Kids in context Child care and workers
Policy Centers Income and Benefits Policy Center