Examining the Externality of Unemployment Insurance on Children's Educational Achievement

Abstract

I exploit differences in the generosity of unemployment insurance (UI) benefits across states and over time to investigate the link between UI and children's academic achievement. Estimates show that a 1% increase in maximum weekly UI benefits reduces the probability that a child repeats a grade by around 0.03 percentage points. The effect is concentrated among children of low‐ and middle‐income families. This paper's findings, which are the first in the literature to show evidence of a positive effect of UI on children's educational outcomes, provide insight into the role of UI in the human capital accumulation of children. (JEL I20, I38, J65)

Labor Demand Shocks at Birth and Cognitive Achievement During Childhood

“…UI benefits are also shown to be helpful in children's education (Regmi 2019). In line with these strands of the literature, it could be argued that UI benefits are being positively correlated both with the unemployment rate and a child's test scores.…”

Unemployment benefits, food insecurity, and supplemental nutrition assistance program spending

“…Because changes in state maximum weekly UI benefits are not necessarily binding for all UI-recipients, this identification strategy estimates the intention-to-treat rather than the average treatment effect. A similar approach has been used to analyze the effects of unemployment benefits on job search behaviors (Krueger & Mueller 2010), health conditions (Kuka 2020), academic achievements among children (Regmi 2018), and cigarette smoking (Fu & Liu 2019).…”

The effect of unemployment insurance on the safety net and infant health in the USA

“…In the one-year period between 2008 and 2009 total claims increased from around three to six million. The slow economic recovery accompanied by larger payments and longer duration of payments stimulated a strand of studies revisiting the social costs and benefits of the UI programme (Barr and Turner, 2015;Bitler and Hoynes, 2016;Card et al, 2015a;Mueller, Rothstein, and Wachter, 2016), as well as its unintended and unplanned externalities on other outcomes including crime (Beach and Lopresti, 2019), foreclosure (Hsu, Matsa, and Melzer, 2018), alcohol abuse (Lantis and Teahan, 2018), cigarette smoking (Fu and Liu, 2019), health (Kuka, 2018), mental health (Tefft, 2011a), college enrolment (Barr and Turner, 2015), and children's educational outcomes (Regmi, 2019).…”