Effects of Parental Death on Labor Market Outcomes

We use Danish administrative data to examine the effects of parental death on labor market outcomes. Leveraging the timing of sudden, first parental deaths and a matched-control difference-in-differences strategy, we find that men's earnings decline by 2 percent, while women's earnings decline by 3 percent following a parental death. Both women and men experience mental health deterioration, leading to increased use of psychological assistance and prescriptions for mental health conditions and opioids. Women with young children experience a comparatively larger earnings decline (around 4 percent) likely due to the loss of informal childcare.