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Effects of Parental Death on Labor Market Outcomes

Mathias Fjællegaard Jensen, Ning Zhang

American Economic Review · 2026 · Volume 116 · Issue 5

DOI: 10.1257/aer.20240432

Abstract

We use Danish administrative data to examine the effects of parental death on labor market outcomes. Leveraging the timing of sudden, first parental deaths and a matched-control difference-in-differences strategy, we find that men's earnings decline by 2 percent, while women's earnings decline by 3 percent following a parental death. Both women and men experience mental health deterioration, leading to increased use of psychological assistance and prescriptions for mental health conditions and opioids. Women with young children experience a comparatively larger earnings decline (around 4 percent) likely due to the loss of informal childcare.

Keywords

Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making, Health Behavior, Fertility, Family Planning, Child Care, Children, Youth, Economics of Gender, Non-labor Discrimination, Wage Level and Structure, Wage Differentials

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