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How unemployment hurts children and suppresses academic achievement

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Unemployment casts a long shadow. It makes people sicker, makes it harder for them to get a new job and can depress their wages permanently even when they go back to work. But there are more indirect effects  as well on the children of the unemployed, who may carry the impact of the current recession well into the next generation.

A new study from the Economic Policy Institute shows that the proportion of children with at least one unemployed parent has more than doubled during the recession, rising from 5.0 percent in 2007 to 10.6 percent in 2010. (The national unemployment rate that year was 9.6 percent.) Children living in single-family households were even more likely to have an unemployed parent. The share of children in a family of a single, unemployed mother rose from 6.6 percent to 11.7 percent during the same time period. Those living in families with a single, unemployed father rose the most dramatically, from 5.7 percent to 14.4 percent.

It should be no surprise, then, that the poverty rate has risen even faster among children than in the general population: In 2009, one in five Americans under the age of 18 was living in poverty, as compared to one in seven people nationally. Low-income children have long been shown to suffer academically and economically. But there’s evidence that parental job loss itself can have damaging effects on academic performance in unemployed families — particularly on poorer children, but not exclusively so.

Last year, Mike Konczal flagged a 2009 study by Ann Huff Stevens and Jessamyn Schaller of UC-Davis that examined the relationship between parental job loss and children’s academic achievement, drawing on data about job loss and grade retention from 1996, 2001 and 2004 panels of the Survey of Income and Program Participation:

We find that a parental job loss increases the probability of children’s grade retention by 0.8 percentage points, or around 15 percent. After conditioning on child fixed effects, there is no evidence of significantly increased grade retention prior to the job loss, suggesting a causal link between the parental employment shock and children’s academic difficulties. These effects are concentrated among children whose parents have a high school education or less.

In the end, the researchers concluded, “one percentage point higher unemployment rate leads to a 0.3 percentage point increase in the probability that a child repeats a grade.” If this is true, Konczal points out, the cumulative impact of unemployment is staggering. “There are roughly 55 million students in K-12 in the country right now. If unemployment is 1% higher that means, roughly, 165,000 additional years of schooling will be repeated,” he writes.

But just as children are at higher risk of underachieving, education budgets are being slashed across the country as the economy remains anemic and the politics of austerity have taken hold. It’s a continuous pile-up that could have lasting damage that goes well beyond sheer employment numbers.

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