Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282904 
Year of Publication: 
2024
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2024-007/V
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
This paper studies the mechanisms and the extent to which parental wage risk passes through to children's skill development. Through a quantitative dynamic labor supply model in which two parents choose whether to work short or long hours or not work at all, time spent with children, and child-related expenditures, we find that income risk impacts skill accumulation, permanently lowering children's skill levels. To the extent that making up for cognitive skill losses during childhood is hard-as available evidence suggests-uninsurable income risk can negatively impact the labor market prospects of future generations.
Subjects: 
Wage risk
Household labor supply
Child development
Social insurance
JEL: 
D1
J13
J22
Document Type: 
Working Paper

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