Research

Job Market Paper

Cash Transfers, Health, and the Transition to Adulthood

Solo work

Abstract ▾

Can a schooling-conditioned cash transfer improve the later employment of adolescents with disabilities? Finland offers a €700 monthly benefit to encourage continued education among people who might otherwise begin claiming disability benefits. Using administrative data, I estimate the program’s long-run effects with an instrumental-variables design based on quasi-random assignment to examiners of different leniency. Among marginal applicants—those whose approval depends on the assigned examiner—approval to the benefit makes them 12 percentage points less likely to be working or studying after payments end. The benefit does not extend their education: they would have remained enrolled even without it. Instead, it weakens their early attachment to the labor market. I use comparisons of observably similar accepted and rejected applicants to assess the effects on the wider population of applicants. This analysis suggests that the program helps adolescents with the poorest prospects, moving them from disability benefits into education and improving later employment. Accounting for what recipients would do in the absence of the transfer could improve program targeting.

Publications

Gender Inequality Reinforced: The Impact of a Child's Health Shock on Parents' Labor Market Trajectories

Demography, 60(4): 1005–1029, August 2023  ·  with Maria Vaalavuo and Henri Salokangas

Abstract ▾ · SocArXiv · Popular summary (FI) · Finalist, Kanter Award 2024

This article employs a couple-level framework to examine how a child's severe illness affects within-family gender inequality. We study parental labor market responses to a child's cancer diagnosis by exploiting an event-study methodology and rich individual-level administrative data on hospitalizations and labor market variables for the total population in Finland. We find that a child's cancer negatively affects the mother's and the father's labor income. The effect is considerably larger for women, increasing gender inequality beyond the well-documented motherhood penalty. We test three potential moderators explaining the more negative outcomes among mothers: (1) breadwinner status, (2) adherence to traditional gender roles and conservative values, and (3) the child's care needs. We find that mothers who are the main breadwinner experience a smaller reduction in their household income contribution than other mothers. Additionally, working in a gender-typical industry and a child's augmented care needs reinforce mothers' gendered responses. These findings contribute to the literature by providing new insights into gender roles when a child falls ill and demonstrating the effects of child health on gender inequality in two-parent households.

Working Papers

Debt Burden of Job Loss in a Nordic Welfare State

Submitted  ·  with Ohto Kanninen, Hannu Karhunen and Terhi Maczulskij

Abstract ▾

The paper investigates the impact of involuntary job loss on severe debt problems in Finland, where up to 50% of income may be subject to wage garnishment for 25 years. We use linked employer-employee data combined with unique administrative records covering debt enforcements from 2007 to 2018. Our event study analysis uncovers a robust and persistent impact of job loss, characterized by plant closures and mass layoffs, on debt-related challenges. Specifically, displaced workers have a 5% higher likelihood of enforced debts in the year of displacement compared to the control group. This effect increases, peaking at 16% four years post-displacement and maintaining a substantial level of roughly 10% nine years afterwards. Effects are particularly large for unpaid taxes, penal orders and fines, while job loss demonstrates only a modest impact on unpaid social or healthcare payments and alimony. Moreover, these effects are more profound among males, less educated, and individuals already burdened with excessive debt, such as mortgages, prior to displacement.

Work in Progress

• Price, Take-up, and Returns to Publicly Subsidized Long-Term Psychotherapy: Evidence from Finland
  with Torsten Santavirta ·  Data security statement
  Abstract ▾

  While psychotherapy is proven to be an effective treatment for many mental health problems in smaller-scale trials, evidence of how to implement large-scale programs of long-term treatment in high-income countries is lacking. We estimate the effects of subsidizing long-term psychotherapy on take-up of treatment using age-based variation in the rates of subsidies. We show that individuals are sensitive to the price of psychotherapy, and changes in the subsidy rate have substantial effects. This is despite, as we show, that there are large private returns to attending psychotherapy, in the form of increased earnings and employment. Overall, we show that subsidizing psychotherapy pays for itself in terms of the increased tax income and decreased use of other healthcare.

  
• Debt Enforcement and Labor Supply
  with Ohto Kanninen, Hannu Karhunen, Terhi Maczulskij and Terhi Ravaska
  Abstract ▾

  This paper examines labor supply responses to wage garnishment, a debt enforcement tool. This parameter is a key component in understanding welfare effects of debt enforcement, as we show in a Baily-Chetty style sufficient statistics model. Using population-wide data and exploiting budget set discontinuities from garnishment rules, we observe positive bunching at convex kink points and significant negative bunching at non-convex kink points. The behavioral responses are modest and vary by occupation, initial debt, and number of dependents. Our estimates of labor supply elasticity with respect to net earnings range from 0.006 to 0.08. To our knowledge, this is the first study to document notable negative bunching at non-convex kink points and to provide credible labor supply elasticity estimates in a debt enforcement context.

  
• The Short- and Long-Run Consequences of Parental Violence Against Children
  with Pedro Carneiro
  Abstract ▾ · Draft available upon request

  We study the short- and long-run consequences of violence against children perpetrated by their parents, combining detailed administrative data on police reports and healthcare use. To make progress on causal identification, we compare victims with matched controls, children recorded as victims at a later date, and siblings who are not recorded as victims. Victims and comparison children follow similar outcome paths before the event, and all three comparisons yield broadly similar short-run estimates afterward. Across the designs, we find that being victimized persistently increases mental health diagnoses after the event. In the long run, the victimized children have a reduced likelihood of graduating secondary education and a greatly increased likelihood of being suspected and convicted of crimes themselves.

• Health "Shocks"
  with Martin Halla and Henri Salokangas
• From Mother to Child Outcomes: The Role of Maternal Nurse-Led Mental Health Services
  with Jiangnan Liao

Teaching

Personal

Outside work, I am an avid birdwatcher and cyclist. I have seen more than 300 different bird species in Finland and been involved in different projects of collecting data and ringmarking birds. No birds were harmed when taking these photos.

‹ ›