Children's Health and Parental Labour Supply

Abstract

This paper investigates the relationship between children's long-term health problems and parental labour supply using the 2004, 2006 and 2008 Longitudinal Study of Australian Children (LSAC). The results from the individual Fixed Effects Model indicate that mothers of children aged 0years in 2004 reduce their labour supply when their children start to show long-term health problems, and their household income declines by 8 per cent, mainly due to the partners' shift from permanent to fixed-term work. Parents of children aged 4years in 2004 show no change in these outcomes associated with the onset of their children's long-term health problems.