Intergenerational effects of sick leave on child human capital

This paper examines the intergenerational consequences of parental participation in government social insurance programs, using one of the largest social insurance programs in the world: sick leave. We exploit quasi-random assignment of patients to general practitioners (GPs) in Norway, who vary in their propensity to certify sick leave of different lengths, to estimate the effects of access to longer sick leave for the marginal individual. Linking administrative data on patients and their children, we show that assignment to a more lenient GP lowers children’s GPA in adolescence, reduces the likelihood of completing upper secondary education, and decreases enrollment in higher education. These effects appear to operate through changes in parental trajectories: more sick leave leads to lower long-term earnings, greater reliance on welfare, and deterioration in mental health.