Stable Income, Stable Family

Suspended from Work and School? Impacts of Layoff Events and Unemployment Insurance on Student Disciplinary Incidence

“…Finally, the effect of a local labor market shock on children's behavior -both via direct effects from parental unemployment and indirect effects from community stress, peer effects, and changes to disciplinarians' classroom management practices -is likely to depend on the ability of unemployed workers to smooth consumption and find new labor market opportunities. Because unemployment benefit programs can help smooth consumption (Gruber, 1997), stabilize families (Swensen et al, 2023), and mitigate negative effects on health (Kuka, 2020), we expect more generous UI to lessen the effects of negative employment shocks on student behavior.…”

“…Finally, because we are interested in the potential moderating effects of UI on school discipline following a layoff event, we obtain information on the maximum weekly UI benefits allotted by state and year, as reported by the U.S. Department of Labor in July of each year. Maximum UI benefits is a commonly used summary measure of UI generosity in the literature (Krueger and Mueller, 2010;Swensen et al, 2023) and is a strong predictor of benefits received (Hsu et al, 2018). The states within our sample provide anywhere from $265 and $707 per week in maximum UI benefits.…”

“…Second, we contribute to a literature on the stabilizing effects of unemployment benefits for workers and families. Generous unemployment benefits allow households to smooth their consumption (Gruber, 1997), which, in turn, improves their health (Kuka, 2020) and reduces suicide rates (Cylus et al, 2014), opioid and antidepressant prescriptions among women (Ahammer and Packham, 2020), the probability of divorce (Swensen et al, 2023), and the likelihood that a child repeats a grade (Regmi, 2019). We provide evidence that this stabilizing mechanism also limits students exposure to exclusionary discipline practices, as they are no more likely to be suspended or expelled after a mass layoff event if state UI benefits are sufficiently generous.…”