Economists: "Losing both parents sucks"

Have you ever wondered whether losing both parents to a tragedy might be a bad thing or not? Well, economists did.

When life gives you lemons, you make lemonade. And when you're trying to study the effects of parental death on children, you need to get your victories where you can find them. For four economists writing a working paper for the US National Bureau of Economic Research (highlighted by the ASI's Ben Southwood), their break came from the 2004 Boxing Day tsunami.

The problem the researchers were faced with is that parents don't die randomly. Deaths by disease, violence and accidents are all highly correlated with other social factors – most obviously, wealth. Really, that's just another way of saying "rich people live longer".

But the tsunami offered a chance to see what happened when the chance of parents dying was equal across all classes. They write:

Survival was to large extent attributable to idiosyncratic factors revolving around the combination of where the waves hit and people’s precise locations at that moment. For these reasons, it is possible that parental death is independent of prior behaviors, including previous investments in children.

As it is, there were in fact a few differences between the group of children who lost parents and the group who didn't. The former group were slightly older, had slightly more boys in it, and the kids were "significantly better educated and significantly more likely to be enrolled in school prior to the tsunami."

But those differences are tiny compared to what they normally are between those two groups, which gave the researchers a chance to carefully examine the effect of losing one or both parents on children's wellbeing.

Unsurprisingly, it was negative.

A year after the tsunami, older children – between the ages of 15 and 17 – are less likely to be enrolled in school, especially if it were the father who died. Five years on, older male children who've lost both parents completed almost two years less schooling, but are more likely to be in work, indicating that doing so forced them to move into to role of "adult" earlier than similar young men. "These older male orphans are likely to carry the costs of the tsunami into adulthood and possibly through the rest of their lives."

A similar effect is found, reversed, in older girls. Losing just a father actually lead to higher rates of school enrolment in the short term, but losing both parents or a mother results in the opposite. And five years after the tsunami, the older girls – young women – are considerably more likely to be married if they lost both parents than if they lost none.

For younger children, there's a confounding factor: various scholarship programmes were instituted for kids who lost parents. Perhaps as a result, younger boys were no more or less likely to be enrolled in school, but they were 32 percentage points more likely to have received a scholarship if their father or both parents died. Perhaps surprisingly, "there is little evidence suggesting significant longer-term impacts of orphanhood on these younger male children apart from a slightly higher probability of helping with housework if either the mother or father died." And loss of both parents for young girls results in a 24 per cent increase in the probability that they'd be working five years later.

It may seem like an obvious conclusion, but research like this is crucial if we want to actually make the most of things like our emergency aid. For instance, focusing scholarships on younger children may have worked from a PR perspective; but it was actually the older children who were most at risk of dropping out of school, as suddenly-alone parents demanded help at home or in the labour market. God forbid anything like the 2004 tsunami happens again; but if it did, this research helps us narrow down who needs help in the long term, not just immediately.

The aftermath of the tsunami. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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In your 30s? You missed out on £26,000 and you're not even protesting

The 1980s kids seem resigned to their fate - for now. 

Imagine you’re in your thirties, and you’re renting in a shared house, on roughly the same pay you earned five years ago. Now imagine you have a friend, also in their thirties. This friend owns their own home, gets pay rises every year and has a more generous pension to beat. In fact, they are twice as rich as you. 

When you try to talk about how worried you are about your financial situation, the friend shrugs and says: “I was in that situation too.”

Un-friend, right? But this is, in fact, reality. A study from the Institute for Fiscal Studies found that Brits in their early thirties have a median wealth of £27,000. But ten years ago, a thirty something had £53,000. In other words, that unbearable friend is just someone exactly the same as you, who is now in their forties. 

Not only do Brits born in the early 1980s have half the wealth they would have had if they were born in the 1970s, but they are the first generation to be in this position since World War II.  According to the IFS study, each cohort has got progressively richer. But then, just as the 1980s kids were reaching adulthood, a couple of things happened at once.

House prices raced ahead of wages. Employers made pensions less generous. And, at the crucial point that the 1980s kids were finding their feet in the jobs market, the recession struck. The 1980s kids didn’t manage to buy homes in time to take advantage of low mortgage rates. Instead, they are stuck paying increasing amounts of rent. 

If the wealth distribution between someone in their 30s and someone in their 40s is stark, this is only the starting point in intergenerational inequality. The IFS expects pensioners’ incomes to race ahead of workers in the coming decade. 

So why, given this unprecedented reversal in fortunes, are Brits in their early thirties not marching in the streets? Why are they not burning tyres outside the Treasury while shouting: “Give us out £26k back?” 

The obvious fact that no one is going to be protesting their granny’s good fortune aside, it seems one reason for the 1980s kids’ resignation is they are still in denial. One thirty something wrote to The Staggers that the idea of being able to buy a house had become too abstract to worry about. Instead:

“You just try and get through this month and then worry about next month, which is probably self-defeating, but I think it's quite tough to get in the mindset that you're going to put something by so maybe in 10 years you can buy a shoebox a two-hour train ride from where you actually want to be.”

Another reflected that “people keep saying ‘something will turn up’”.

The Staggers turned to our resident thirty something, Yo Zushi, for his thoughts. He agreed with the IFS analysis that the recession mattered:

"We were spoiled by an artificially inflated balloon of cheap credit and growing up was something you did… later. Then the crash came in 2007-2008, and it became something we couldn’t afford to do. 

I would have got round to becoming comfortably off, I tell myself, had I been given another ten years of amoral capitalist boom to do so. Many of those who were born in the early 1970s drifted along, took a nap and woke up in possession of a house, all mod cons and a decent-paying job. But we slightly younger Gen X-ers followed in their slipstream and somehow fell off the edge. Oh well. "

Will the inertia of the1980s kids last? Perhaps – but Zushi sees in the support for Jeremy Corbyn, a swell of feeling at last. “Our lack of access to the life we were promised in our teens has woken many of us up to why things suck. That’s a good thing. 

“And now we have Corbyn to help sort it all out. That’s not meant sarcastically – I really think he’ll do it.”