The relationship between parental disability and child outcomes: Evidence from veteran Families

We examine the relationship between parental disability and child outcomes in the American Community Survey. We focus on families with veteran parents, for whom parental disability is a direct result of service-related activities and thus is more plausibly exogenous to child outcomes than other forms of parental disability. Using the service connected disability rating (SCDR) as a measure of the severity of veteran disability, we document a gradient in child outcomes with respect to parental disability (even conditional on having a disabled parent). Children with more severely disabled parents are more likely to be late for grade, less likely to be in private school, and more likely to have disabilities themselves. These results lend meaningful insight to broader populations; we find similar associations between parental disability and child outcomes in non-veteran families. We provide evidence consistent with two broad mechanisms: first, parental disability reduces parental labor supply and thus household income (even net of transfers) and second, children-especially older children-allocate time away from work and schooling to provide care for disabled parents.