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Home | Events Archive | Multigenerational Effects of Unemployment Insurance Reform

Multigenerational Effects of Unemployment Insurance Reform

  • Location
    Online Seminar
  • Date and time

    December 10, 2020
    12:00 - 13:00

The unemployment insurance reform introduced in the Netherlands on 1st January 2004 increased the labour supply of individuals above 57.5 years old - age when individuals are likely to be grandparents (generation 1). We investigate the spillover effect of this reform on their grandchildren (generation 3). We implement a IV strategy which exploits variation yield by the policy introduction date and the age eligibility criteria to instrument for grandparents being active in 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.