English
Valencià
Initiatives aiming to stimulate older workers active labor market participation are known to have increased elderly labor supply during the past decades. Yet, little is known about the impact this may have on next generations. We exploit the 2004 Dutch unemployment insurance reform that enhanced labor supply of individuals above 57.5 years old, an age at which individuals are likely to be grandparents. Using unique administrative data covering three generations in families, we find a strong positive multigenerational impact of increased grandfathers’ labor force participation on their grandchildren’s educational performance on a standardized test in 6th grade. This effect is driven both by direct mechanisms – i.e. due to a reduction in grandparents’ informal childcare provision being replaced by formal childcare – as well as by indirect mechanisms – i.e. due to increased maternal labor supply and delayed fertility.