UM17-18 - Parental Transfers to Unemployed Children: Savings, Consumption, and Retirement EffectsJeffrey B. Wenger and Kathryn Edwards
The risk of labor-market, health, and asset-value shocks comprise profound challenges for older workers. However, shocks to their children may be a source of additional risk, and hence, an additional challenge for retirement security. In this study, we propose using longitudinal data on parents and children to from the PSID. Between the 1969-2013 waves of the PSID, we have approximately 8,000 parents who have children in the survey and are observed for at least six waves. Among their 17,000 children, we observe roughly 21,000 unemployment spells. We propose using these data to estimate the effect of child unemployment spells on parent behavior, including preretirement labor-force participation, consumption and savings levels, self-reported health, observed labor-force exit, and the age at which Social Security is claimed.