Labor Supply in the Terminal Stages of Lone Parents' Lives
By: Elisabeth Fevang, Snorre Kverndokk and Knut Røed
Journal of Population Economics, forthcoming
Based on Norwegian register data we show that having a lone parent in the terminal stage of life affects the offspring’s labor market activity. The employment propensity declines by around ½-1 percentage point among sons and 4 percentage points among daughters during the years prior to the parent’s death, ceteris paribus. After the parent’s demise, employment picks up again and earnings rise for both sons and daughters. Reliance on sickness insurance and other social security transfers increases significantly during the terminal stages of the parent’s life. For sons, the claimant rate remains at a higher level long after the parent’s demise.