Spotlight on: Parental job loss during COVID-19 and effects on children’s behavioral health 

This spotlight report examines how COVID-era parental job loss affected children’s behavioral health development, using data from the Early Childhood Poverty Tracker (ECPT), a representative, longitudinal study of families with young children born in New York City. The report draws on three ECPT surveys that followed families from before the pandemic in 2019 to the early and middle phases of COVID-19 in 2020 and 2021.

After the COVID-19 pandemic began in March 2020, New York City experienced a historic decline in employment, losing nearly a million jobs. This massive job loss exposed many children to the economic insecurity associated with parental job loss, which could have harmful effects on children’s development.

Although New York City regained its pre-pandemic employment levels by late 2023, there is still much to learn about how the economic disruptions of the pandemic affected children during their early years. For families, schools, and community agencies aiming to support children’s post-COVID developmental recovery, it is crucial to understand the implications of whether children who experienced parental job loss during the pandemic faced more developmental challenges, necessitating additional support.

Key Findings

• Among young children in New York City, roughly one-third lived in families where at least one parent stopped working after the onset of the COVID-19 pandemic.
• In 2021, a year after the pandemic began, children in two-parent families where both parents (or the sole working parent) stopped working had more reported peer problems than children from two-parent families that did not experience parental job loss.
• The link between parental job loss and children’s peer problems was not found among children from single-parent families.

Conclusion and Key Takeaways

Parental job loss during COVID-19 caused significant disruptions for children and families. Among families in the ECPT study, approximately one-third of young children experienced at least one parent’s job loss after the pandemic began in 2020.

To address the economic impact of the pandemic, policy packages like the CARES Act and the American Rescue Plan Act provided essential income support, through expanded unemployment insurance, economic impact payments, food stamps, and child tax credits. These policies likely mitigated the financial strain of job loss during the pandemic. Nevertheless, our findings highlight a critical need for more comprehensive and sustained support during economic crises, particularly for families who lose all sources of earned income.