Lavinia Parisi

Characteristics of parents and the unemployment duration of their offspring: evidence from Italy

This paper analyses the relationship between the characteristics of parents (namely, income, occupation and education) and the unemployment duration of their children using the job search theory. The empirical specification featured Lancaster’s (Econometrics 28:113–126, 1985) simultaneous estimate of two equations: completed unemployment duration and the starting wage accepted for a new job. The sample is drawn from the European Community Household Panel (1995–2000) and consists of unemployed Italian children who lived with their parents while looking for work. The results demonstrate that household economic conditions affect unemployment duration at different levels of educational attainment. Specifically, Italians who have graduate degrees from the wealthiest families have briefer unemployment duration. Netting out the effects of liquidity constraints and education, children from the wealthiest families can afford high-quality schools and universities and may also have better information and search strategies, thereby reducing their unemployment duration.