How Does Unemployment Affect Family Arrangements for Children?

Elizabeth Peters, Urban Institute
Stephan Lindner, Urban Institute

This study uses the SIPP to analyze whether and how the event of a job less in families with children changes family arrangements. We distinguish between four types of initial family arrangements: married parents, non-married parents, mothers cohabiting with their partner, and single mothers. Comparing outcomes for children whose parents become unemployed to children whose parents do not, we find a positive association between job loss and the probability of experiencing a change in family arrangements for children who initially live with their married parents or their single mother. Fixed effect models further corroborate this positive relationship for children who initially live with their married parents. Single mothers, however, appear to be less able to change toward more formal family arrangements after their job loss. These results suggests that changes in family structure may function as a channel through which parental job loss affects the well-being of children.