Parental Joblessness and the School-to-Work Transition in Australia and the United States

As young adults transition from education into the labor market, they are at risk of periods of non-employment, which can affect their subsequent labor market outcomes. We test whether the proportion of time that children spend in households with jobless parents is associated with a lengthened first job search following educational exit in Australia and the U.S. using Cox proportional hazards models run on longitudinal household survey data. We also examine whether effects of parental joblessness differ according to the respondent’s highest level of educational attainment. We find that parental joblessness is associated with longer initial spells of joblessness upon exiting education on average in both the U.S. and Australia, though this relationship is stronger in Australia. We also find that bachelor’s degree attainment mitigates much of this negative relationship in Australia, suggesting that parental joblessness is most harmful for Australians who leave school before earning a university degree. However, there was no evidence for a similar interaction in the U.S., suggesting that the relationship between education, parental joblessness, and the school-to-work transition may depend on contextual factors such as the welfare regime or other policies affecting young adults’ employment.