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May 8, 2026

The effect of parental death on individual earnings

The sudden death of a parent has a significant impact on labor earnings, but affects men and women differently.

Tyler Smith

Source: Mbruxelle

The death of a parent is a painful experience that many working adults face, yet its economic consequences have received limited attention in the labor economics literature. Most research on the labor impacts of fatal health shocks has concentrated on the death of a spouse or child. 

In a paper in the American Economic Review, authors Mathias Fjællegaard Jensen and Ning Zhang address this gap by examining how parental death affects individual earnings.

Using Danish administrative data from 1985 to 2014, the authors identified adults aged 25 to 50 who had lost a parent suddenly—from causes such as heart attacks, strokes, and accidents. Focusing on sudden deaths helped to rule out individuals who adjusted their workload or family lives in advance of a parental death. The sample was also restricted to first parental death, which helped to remove individuals who adjusted their work in anticipation of an inheritance.

To estimate the causal effect of parental loss, the authors paired each bereaved individual with a comparable person who did not lose a parent during the same period, matching on demographics, family structure, education, region, and prior earnings. Comparing the two trajectories helped to isolate the effect of the loss itself. 

Figure 2 from the paper shows the authors’ estimates of the impact of an unexpected first parental death.

Figure 2 from Jensen and Zhang (2026)

The chart depicts the percent change in earnings relative to the year before the parental death, separated into two panels. The left panel shows effects following a mother's death, and the right panel shows effects following a father's death. Within each panel, blue bars represent men’s earnings responses and red bars represent women's, with 95 percent confidence intervals indicated by vertical barbells.

A mother’s death produced larger earnings declines than a father’s death for both sons and daughters. Women’s earnings fell by approximately 2.7 percent after a mother’s death compared to roughly 1.8 percent after a father’s death. For men, income declined by about 2.0 percent after a mother’s death and 1.4 percent after a father’s death. 

The authors argue that mental health deterioration accounts for a substantial portion of the decline in earnings. In particular, they show that after parental loss, antidepressant prescriptions and visits to psychologists increased significantly. 

Women with children under age six experienced earnings declines approaching 4 percent, while comparable men showed negligible effects. This difference may result from the loss of informal childcare provided by parents.

Since most adults experience the loss of a parent, the aggregate implications are substantial. The authors propose bereavement leave, structured grief support, and expanded out-of-hours childcare as policy responses that could potentially mitigate the long-term negative effects of parental death.