Economic Conditions, Parental Job Loss, and Children’s Living Arrangements

Rebecca A. London, University of California, Santa Cruz
Robert Fairlie, University of California, Santa Cruz

This study examines how economic conditions relate to children's living arrangements over time. We use data from the 1989-2004 CPS to document changes in living arrangements, defining these as children living with: two parents, one parent, one parent and a cohabitor, parent(s) and grandparent(s), parent(s) and others, and no parents. We use these data to study how variations in state economic conditions over time affect the distribution of living arrangements. We use various specifications to correct for demographic trends in living arrangements not related to economic conditions and include controls for welfare reform measures put in place during the time period as well as other background characteristics. We also use the 2001 SIPP to examine how parental job loss affects children's living arrangements over a one-year period. We follow families in which a parent is laid off to model the effect of these layoffs on changes in family structure and living arrangements.