Job Losses and Child Outcomes

Based on matched employer-employee data from Norway, we analyze the effects of worker displacement in 1986-1987 on their children’s earnings in 1999-2001. Using displacement of fathers to indicate an exogenous earnings shock we seek to identify whether family resources have a direct effect on children’s economic outcome. As in previous Scandinavian studies, we find the intergenerational earnings mobility to be fairly high compared to the U.S. and the U.K. Displacement appears to have a negative effect on earnings and employment of those affected, while we find no significant effects on offspring.