Family Adaptations to Economic Loss

A PSC Brown Bag Seminar

Sandra Hofferth (PSC)
Wei-Jun Jean Yeung (University of Michigan, Institute for Social Research)

Monday, 2/26/1996.   ARCHIVED EVENT

Location: 6050 ISR Thompson St

This paper examines how black and nonblack families adjust to a major economic loss such as a substantial loss of employment hours of the family head or a substantial loss of family income. The data come from the Panel Study of Income Dynamics. Our sample consists of children born between 1967 and 1972 who were followed over the first 20 years of their lives. As expected, families that experience substantial income loss are more likely to receive AFDC, food stamps, experience divorce, or to make a residential move. We also found that families whose head experiences a substantial loss of work hours make similar adaptations. Contrary to expectations, we found no evidence for increased labor force participation of other family members associated with loss of income, though we did find that black families, in particular, do adapt to a substantial loss of work hours of the head through increasing the work hours of other family members. Finally, black families may respond to economic hardship by splitting up.

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