Parental Unemployment Takes its Toll on Children

By Stephanie Schmit and Emily Firgens

As the U.S. continues recovering from the Great Recession, unemployment among the nation’s families is a persistent concern. In an average month in 2012, 6.2 million children lived with unemployed parents, and 12.1 million children were affected by an unemployed or underemployed parent. Parental unemployment and underemployment can create instability for low-income children, which can be exacerbated when families face reduced eligibility for child care subsidies, or loss of subsidies entirely. Federal cuts to child care and Head Start funding under sequestration may further reduce access as Head Start classrooms close, and states tighten their child care subsidy eligibility policies.

A recent report from the Urban Institute and First Focus analyzes unemployment from the perspective of children, looking at the impact a parent’s job loss can have on children and how many children around the country have been affected by this. Families experience decreased financial resources with the loss of a job, making it hard to cover monthly expenses and provide for their children’s developmental needs. Increased parent irritability and depression as a result of job loss can strain family relations and lead to increases in conflicts. Several studies have shown unemployment can negatively impact children’s school performance. 

The report finds that black children are twice as likely to live with an unemployed parent as white children, and that children of college-educated parents are less likely to have unemployed parents than other children. Children in single-parent families are also more likely to live with an unemployed parent than children in two-parent families. The number of children with unemployed parents varies greatly across states. Nationally, 9 percent of children live with at least one unemployed parent. In California, 11 percent of children live with at least one unemployed parent, and 13 percent of children in the District of Columbia live with at least one unemployed parent. However, less than 4 percent of children in North Dakota and Vermont live with an unemployed parent.

Families and children with one or more unemployed parent would benefit from strengthened policies for unemployment insurance, child care subsidies, and other benefit programs that are critical to the stability and well being of low-income, vulnerable families.  In combination with consistent funding, strong child care subsidy policies that can help families weather the disruptions of employment include:

  • Extended job search periods for families who have been eligible for subsidies but have had hours reduced, or have become unemployed;
  • More flexible eligibility and reporting requirements, such as reducing the employment or salary triggers for changes in subsidy eligibility;
  • Annual eligibility redetermination policies, to allow children continuity in care settings while their parents weather bumpy economic roads.

Policies should reflect what is best for children and families during times of unemployment. Thoughtful action at the federal, state, and local level can help support families through this difficult time and reduce the negative impact unemployment can have on children and the entire family.