"The Career Costs of Children's Health Shocks

Abstract: "I provide novel evidence on the impact of a child’s severe health shock on parental labor market outcomes. To identify the causal effect, I leverage long panels of high-quality Finnish administrative data and exploit variation in the exact timing of the health shock. I do this by comparing parents across families in similar parental and child age cohorts whose children experienced a health shock at different ages. Following their child’s adverse health event, parental earnings suffer a decline that is both substantial and persistent: five years after a child’s severe hospitalization, maternal earnings remain over 7.5% lower, while fathers’ earnings are 2.5% lower. Notably, the shock also impacts parents’ mental well-being"