Parental Health Penalty on Adult Children's Employment: Gender Difference and Long-Term Consequence

TL;DR

This study investigates how parental health shocks affect adult children's employment in China, revealing significant gender differences with long-lasting negative impacts on women’s employment rates, highlighting implications for aging populations in developing countries.

Contribution

It introduces an inter-temporal cooperative model and employs an event-study approach to establish a causal link between parental health shocks and employment, emphasizing gender-specific long-term effects.

Findings

Female employment declines significantly after parental health shocks.

Male employment remains largely unaffected.

Negative effects persist up to eight years after shocks.

Abstract

This paper examines the long-term gender-specific impacts of parental health shocks on adult children's employment in China. We build up an inter-temporal cooperative framework to analyze household work decisions in response to parental health deterioration. Then employing an event-study approach, we establish a causal link between parental health shocks and a notable decline in female employment rates. Male employment, however, remains largely unaffected. This negative impact shows no abatement up to eight years that are observable by the sample. These findings indicate the consequence of "growing old before getting rich" for developing countries.