Job loss and family adjustments in work and schooling during the Mexican peso crisis

We use individual data from a panel of families during the depth of the peso crisis in Mexico to investigate whether the transition of the male household head from employment into unemployment affects the labor force participation of his spouse and children. We find that significant added-worker effects are in operation especially for adult females (wives), but no evidence that the labor force participation, the school attendance, and the likelihood of advancing to the next school grade of teenage males are influenced by the event of unemployment of the household head. The head's unemployment is significantly associated with a higher probability that teenage females do not attend school. However, lower attendance does not appear to impede their advancement to the next grade.