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PARENTAL EARNINGS AND CHILDREN'S WELL‐BEING: AN ANALYSIS OF THE SURVEY OF INCOME AND PROGRAM PARTICIPATION MATCHED TO SOCIAL SECURITY ADMINISTRATION EARNINGS DATA

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We estimate the association between parental earnings and child well‐being using data from the Survey of Income and Program Participation matched to Social Security Administration earnings records. We use very large samples on a wide variety of measures of child well‐being that are also linked to long histories of parent earnings from administrative records. Consistent with previous studies, we find that the use of longer time averages of parent earnings leads to substantially higher estimated associations compared to using only a single year of parent earnings. Using 7‐year time averages of parent earnings, we show, for example, that a doubling of parent earnings is associated with a reduced probability of a teenager reporting being in poor health by close to 50% and a decrease in the likelihood of a child repeating a grade by 39%. We also examine how the associations vary by the timing of when parental earnings are received during childhood. We find suggestive evidence that parental earnings received during the child's school‐going years (ages 6 to 17) are more strongly associated with college enrollment and children's future earnings as adults than parent earnings received earlier or later in the child's life. (JEL J13, I1, I2)
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Document Type: Research Article

Affiliations: 1: Senior Economist, Federal Reserve Bank of Chicago, 230 S. La Salle Street, Chicago, IL 60641. Phone 312-322-8166, Fax: 312-322-2357 2: Graduate Student, Irving B. Harris Graduate School of Public Policy, 1155 East 60th Street, Chicago, IL 60637.

Publication date: July 1, 2013

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