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Divorce, Family Arrangements, and Children's Adult Outcomes
May 2025
Working Paper Number:
CES-25-28
Nearly a third of American children experience parental divorce before adulthood. To understand its consequences, we use linked tax and Census records for over 5 million children to examine how divorce affects family arrangements and children's long-term outcomes. Following divorce, parents move apart, household income falls, parents work longer hours, families move more frequently, and households relocate to poorer neighborhoods with less economic opportunity. This bundle of changes in family circumstances suggests multiple channels through which divorce may affect children's development and outcomes. In the years following divorce, we observe sharp increases in teen births and child mortality. To examine long-run effects on children, we compare siblings with different lengths of exposure to the same divorce. We find that parental divorce reduces children's adult earnings and college residence while increasing incarceration, mortality, and teen births. Changes in household income, neighborhood quality, and parent proximity account for 25 to 60 percent of these divorce effects.
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The Impact of Childcare Costs on Mothers' Labor Force Participation
April 2025
Working Paper Number:
CES-25-25
The rising costs of childcare pose challenges for families, leading to difficult choices including those impacting mothers' labor force participation. This paper investigates the relationship between childcare costs and maternal employment. Using data from the National Database of Childcare Prices, the American Community Survey, and the Longitudinal Employer Household Dynamics, we estimate the impact of childcare costs on mothers' labor force participation through two empirical strategies. A fixed-effects approach controls for geographic and temporal heterogeneity in costs as well as mothers' idiosyncratic preferences for work and childcare, while an instrumental variables approach addresses the endogeneity of mothers' preferences for work and childcare by leveraging exogenous geographic and temporal variation in childcare licensing requirements. Our findings across both research designs indicate that higher childcare costs reduce labor force participation among mothers, with lower-income mothers exhibiting greater responsiveness to changes in childcare costs.
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Peer Income Exposure Across the Income Distribution
February 2025
Working Paper Number:
CES-25-16
Children from families across the income distribution attend public schools, making schools and classrooms potential sites for interaction between more- and less-affluent children. However, limited information exists regarding the extent of economic integration in these contexts. We merge educational administrative data from Oregon with measures of family income derived from IRS records to document student exposure to economically diverse school and classroom peers. Our findings indicate that affluent children in public schools are relatively isolated from their less affluent peers, while low- and middle-income students experience relatively even peer income distributions. Students from families in the top percentile of the income distribution attend schools where 20 percent of their peers, on average, come from the top five income percentiles. A large majority of the differences in peer exposure that we observe arise from the sorting of students across schools; sorting across classrooms within schools plays a substantially smaller role.
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Potential Bias When Using Administrative Data to Measure the Family Income of School-Aged Children
January 2025
Working Paper Number:
CES-25-03
Researchers and practitioners increasingly rely on administrative data sources to measure family income. However, administrative data sources are often incomplete in their coverage of the population, giving rise to potential bias in family income measures, particularly if coverage deficiencies are not well understood. We focus on the school-aged child population, due to its particular import to research and policy, and because of the unique challenges of linking children to family income information. We find that two of the most significant administrative sources of family income information that permit linking of children and parents'IRS Form 1040 and SNAP participation records'usefully complement each other, potentially reducing coverage bias when used together. In a case study considering how best to measure economic disadvantage rates in the public school student population, we demonstrate the sensitivity of family income statistics to assumptions about individuals who do not appear in administrative data sources.
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CTC and ACTC Participation Results and IRS-Census Match Methodology, Tax Year 2020
December 2024
Working Paper Number:
CES-24-76
The Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC) offer assistance to help ease the financial burden of families with children. This paper provides taxpayer and dollar participation estimates for the CTC and ACTC covering tax year 2020. The estimates derive from an approach that relies on linking the 2021 Current Population Survey Annual Social and Economic Supplement (CPS ASEC) to IRS administrative data. This approach, called the Exact Match, uses survey data to identify CTC/ACTC eligible taxpayers and IRS administrative data to indicate which eligible taxpayers claimed and received the credit. Overall in tax year 2020, eligible taxpayers participated in the CTC and ACTC program at a rate of 93 percent while dollar participation was 91 percent.
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Comparison of Child Reporting in the American Community Survey and Federal Income Tax Returns Based on California Birth Records
September 2024
Working Paper Number:
CES-24-55
This paper takes advantage of administrative records from California, a state with a large child population and a significant historical undercount of children in Census Bureau data, dependent information in the Internal Revenue Service (IRS) Form 1040 records, and the American Community Survey to characterize undercounted children and compare child reporting. While IRS Form 1040 records offer potential utility for adjusting child undercounting in Census Bureau surveys, this analysis finds overlapping reporting issues among various demographic and economic groups. Specifically, older children, those of Non-Hispanic Black mothers and Hispanic mothers, children or parents with lower English proficiency, children whose mothers did not complete high school, and families with lower income-to-poverty ratio were less frequently reported in IRS 1040 records than other groups. Therefore, using IRS 1040 dependent records may have limitations for accurately representing populations with characteristics associated with the undercount of children in surveys.
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Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility
July 2024
Working Paper Number:
CES-24-38
We show that intergenerational mobility changed rapidly by race and class in recent decades and use these trends to study the causal mechanisms underlying changes in economic mobility. For white children in the U.S. born between 1978 and 1992, earnings increased for children from high-income families but decreased for children from low-income families, increasing earnings gaps by parental income ('class') by 30%. Earnings increased for Black children at all parental income levels, reducing white- Black earnings gaps for children from low-income families by 30%. Class gaps grew and race gaps shrank similarly for non-monetary outcomes such as educational attainment, standardized test scores, and mortality rates. Using a quasi-experimental design, we show that the divergent trends in economic mobility were caused by differential changes in childhood environments, as proxied by parental employment rates, within local communities defined by race, class, and childhood county. Outcomes improve across birth cohorts for children who grow up in communities with increasing parental employment rates, with larger effects for children who move to such communities at younger ages. Children's outcomes are most strongly related to the parental employment rates of peers they are more likely to interact with, such as those in their own birth cohort, suggesting that the relationship between children's outcomes and parental employment rates is mediated by social interaction. Our findings imply that community-level changes in one generation can propagate to the next generation and thereby generate rapid changes in economic mobility.
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The Impact of Parental Resources on Human Capital Investment and Labor Market Outcomes: Evidence from the Great Recession
June 2024
Working Paper Number:
CES-24-34
I study the impact of parents' financial resources during adolescence on postsecondary human capital investment and labor market outcomes, using house value changes during the Great Recession of 2007-2009 as a natural experiment. I use several restricted-access datasets from the U.S. Census Bureau to create a novel dataset that includes intergenerational linkages between children and their parents. This data allows me to exploit house value variation within labor markets, addressing the identification concern that local house values are related to local economic conditions. I find that the average decrease to parents' home values lead to persistent decreases in bachelor's degree attainment of 1.26%, earnings of 1.96%, and full-time employment of 1.32%. Children of parents suffering larger house value shocks are more likely to substitute into two-year degree programs, drop out of college, or be enrolled in a college program in their late 20s.
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Who Marries Whom? The Role of Segregation by Race and Class
June 2024
Working Paper Number:
CES-24-30
Americans rarely marry outside of their race or class group. We distinguish between two possible explanations: a lack of exposure to other groups versus a preference to marry within group. We develop an instrument for neighborhood exposure to opposite-sex members of other race and class groups using variation in sex ratios among nearby birth cohorts in childhood neighborhoods. We then test whether increased exposure results in more interracial (white-Black) and interclass (top-to-bottom parent income quartile) marriages. Increased exposure to opposite-sex members of other class groups generates a substantial increase in interclass marriage, but increased exposure to other race groups has no detectable effect on interracial marriage. We use these results to estimate a spatial model of the marriage market and quantify the impact of reducing residential segregation in general equilibrium. For small changes in exposure, the model implies effects in line with recent estimates from policy experiments. We then use the model to assess the overall contribution of segregation and find that residential segregation has large effects on interclass, but not interracial, marriage.
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Where Are Your Parents? Exploring Potential Bias in Administrative Records on Children
March 2024
Working Paper Number:
CES-24-18
This paper examines potential bias in the Census Household Composition Key's (CHCK) probabilistic parent-child linkages. By linking CHCK data to the American Community Survey (ACS), we reveal disparities in parent-child linkages among specific demographic groups and find that characteristics of children that can and cannot be linked to the CHCK vary considerably from the larger population. In particular, we find that children from low-income, less educated households and of Hispanic origin are less likely to be linked to a mother or a father in the CHCK. We also highlight some data considerations when using the CHCK.
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