Abstract
Parents of children with disabilities may face higher labor-market penalties given the extra care and support required. Using Swedish administrative data, we focus on first-born children with Cerebral Palsy (CP) to estimate impacts on parental labor-market outcomes. We apply an event study approach to identify effects up to 10 years after the birth of the child. Our results show that employment and earnings of mothers decrease in the short run and increase in the long run whereas for fathers, a marginal decrease is observed in the short run. The effects differ by severity of the disability, with mothers of children with severe impairments driving the increases in the long run, whilst mothers of children with mild impairments appear to experience a penalty. Further, transfers and benefits from the Swedish social insurance system compensate parents for some of the potential costs associated with caring for a child with CP.