The Effects of Aggregate and Gender-Specific Labor Demand Shocks on Child Health

In this paper, we estimate the relationship between cyclical changes in aggregate labor market opportunities and child health outcomes. In addition to using state unemployment rates to proxy for labor market conditions, as is common in the existing literature, we construct predicted employment growth indices that allow us to separately identify demand-induced changes in labor market opportunities for fathers and mothers. In contrast with prominent studies of adult health, we find no evidence that negative shocks to general economic conditions are associated with improvements in contemporaneous measures of children’s health. We do find, however, that focusing on gender-inclusive economic variables obscures the extent to which the labor market affects children. Specifically, we find evidence that improvements in labor market conditions facing women are associated with worse child health, while improvements in men’s labor market conditions have smaller positive effects on child health. These patterns, which are consistent with previous findings on the effects of individual parental employment and job displacement, suggest that family income and maternal time use are both important mechanisms mediating the effects of aggregate labor market conditions on child health.