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Multigenerational Spillover effect of Unemployment Insurance Reform: the Effect of Grandparents’ Labour Supply on Grandchildren Educational Outcomes (AME)

Wednesday 20 January 2021, 11.00AM to 12.00pm

Speaker(s): Gloria Moroni, Erasmus University Rotterdam

Host: Cheti Nicoletti

Abstract: The 2004 unemployment insurance reform introduced in the Netherlands increased the labour supply of individuals above 57.5 years old - age when individuals are likely to be grandparents (generation 1). Using unique administrative data covering three generations in families, we investigate the spillover effect of this reform on their grandchildren (generation 3). We implement an IV strategy which exploits exogenous variation yielded by the policy introduction date and the age eligibility criteria to instrument for grandparents being active on the labour market. We find a positive impact of grandfathers' activity on the grandchildren's educational outcomes. We provide evidence on potential direct mechanisms driving this relationship - i.e. going directly from grandparents to grandchildren - as well as potential indirect mechanisms - i.e. mediated by changes in mothers' (generation 2) labour supply and fertility.

Location: Zoom link to follow