Cycles of adversity: Parental joblessness in childhood and energy poverty in adulthood

Abstract

This study examines the causal relationship between exposure to father's joblessness during childhood and adolescence and experiencing energy poverty in adulthood using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. To address concerns that father's joblessness is endogenous, we employ the interaction between the average number of recessions that occurred in the period before the individual was age 14 and maternal education level as an instrumental variable. We find that for individuals whose fathers were unemployed for six months or more growing up, the likelihood of being in energy poverty as an adult measured by subjective ability to heat the home, the objective Low-Income-High-Cost (LIHC) measure and the 10 % threshold indicator increases by 29.9 percentage points, 58.5 percentage points and 16.9 percentage points, respectively. We find that this relationship is mediated by education, health, labour market outcomes, locus of control and social capital.