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Why This Topic Is Important
Unemployment and underemployment can limit parents’ ability to meet their families’ material needs, while financial stress can affect their ability to provide for their children emotionally. Children who experience economic hardship when they are young, particularly hardship that is extreme or prolonged, are at increased risk for negative health and developmental outcomes (1, 2). Parental unemployment has been linked to short- and long-term mental health problems in children, as well as academic and employment challenges later in life (1, 2, 3). Secure parental employment (with adequate pay and benefits) can reduce economic hardship and help ensure that children's basic needs are met and that they have family environments in which to thrive (1, 2). Stable employment also is important for young people when they reach early adulthood, as it decreases the likelihood of long-term employment difficulties and low earnings (4).

Recent unemployment crises, such as the COVID-19 pandemic and the Great Recession, hit certain workers particularly hard, especially women, African American/black men, youth of color, immigrants, and those earning lower wages or with less education (1, 4, 5). Leaders can address the systemic issues behind these inequities, as well as support programs and policies to meet the needs of vulnerable groups (1, 4).
For more information, see kidsdata.org’s Research & Links section.

Sources for this narrative:

1.  National Academies of Sciences, Engineering, and Medicine. (2023). Addressing the long-term effects of the COVID-19 pandemic on children and families. National Academies Press. Retrieved from: https://nap.nationalacademies.org/catalog/26809/addressing-the-long-term-effects-of-the-covid-19-pandemic-on-children-and-families

2.  American Academy of Pediatrics, Council on Community Pediatrics. (2021). Poverty and child health in the United States. Pediatrics, 137(4), e20160339. Retrieved from: https://publications.aap.org/pediatrics/article/137/4/e20160339/81482/Poverty-and-Child-Health-in-the-United-States

3.  Lam, J., & Ambrey, C. L. (2019). The scarring effects of father's unemployment? Job-security satisfaction and mental health at midlife. The Journals of Gerontology: Series B, 74(1), 105-112. Retrieved from: https://academic.oup.com/psychsocgerontology/article/74/1/105/4259759

4.  Kimberlin, S., & Anderson, A. (2022). In good times and bad, California's black and Latinx workers bear the burden of unemployment. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/in-good-times-and-bad-californias-black-and-latinx-workers-bear-the-burden-of-unemployment

5.  Center on Budget and Policy Priorities. (2023). Chart book: Tracking the recovery from the pandemic recession. Retrieved from: https://www.cbpp.org/research/economy/tracking-the-recovery-from-the-pandemic-recession
Policy Implications
Even before recent economic crises, such as the COVID-19 pandemic and the Great Recession, many workers struggled to find adequate employment to meet their families’ basic needs (1, 2). These crises exacerbated existing economic problems and disparities, with job losses disproportionately affecting women, people of color, immigrants, and families with lower incomes or less education (1, 3, 4). Similarly, during times of prosperity, not all families benefit from a strong economy (1, 2, 3). Policymakers can address labor market discrimination and inequities, support adequate wages and benefits, help build a skilled workforce for in-demand jobs, and remove barriers to work and education (3). These steps, along with promoting a strong social safety net and effective support services, have the potential to minimize unemployment and underemployment, and maximize opportunities for all Californians (2, 3, 4).

Policy and program options that could improve workforce participation, reduce inequities, and mitigate the effects of unemployment include:
  • Aligning California's education systems with workforce needs and increasing investments to improve college preparation, attendance, and graduation rates, particularly among underrepresented groups such as low-income, African American/black, American Indian/Alaska Native, and Hispanic/Latino students (3, 5, 6)
  • Promoting and strengthening early work opportunities for low-income youth and young people of color, e.g., through work-based learning programs that provide connections to supportive adults and career pathways (6, 7)
  • Supporting effective career education, workforce development, and reemployment programs that align with the changing job market; as part of this, promoting comprehensive plans to address long-term unemployment, which may include subsidized employment and improved job-specific training and hiring systems (2, 3, 8)
  • Pursuing targeted strategies to address systemic barriers to stable employment with adequate compensation for people of color, women, and others who are overrepresented among low-wage workers; as part of this, working to eliminate discriminatory hiring practices through strengthened and vigorously enforced anti-discrimination laws (2, 3)
  • Working across sectors to address other barriers to employment, such as a lack of available housing near employers, affordable child or elder care, or accessible public transportation (2, 3)
  • Revising work participation rate requirements and penalties in the federal Temporary Assistance to Needy Families program (CalWORKs in California), which research suggests do not lead to long-term improvements in employment (9, 10)
  • Updating and strengthening federal and state sick leave, paid family leave, and unemployment insurance systems, ensuring that benefit levels are adequate to make ends meet during job disruptions; also, ensuring that immigrants, who are key to meeting current and future workforce needs, can receive financial assistance when they lose work (3, 4, 11, 12)
  • Ensuring that other federal and state safety net policies and investments—such as cash and food assistance, public health insurance, housing supports, and tax credits—support all families in need (2, 3, 4)
  • Expanding families’ access to support services addressing mental health, substance abuse, intimate partner violence, and other issues that may interfere with their ability to maintain employment (4, 10)
For more information, see kidsdata.org’s Research & Links section or visit Urban Institute, California Budget and Policy Center, and Center on Budget and Policy Priorities. Also see Policy Implications on kidsdata.org for Family Income and Poverty and other topics related to Family Economics.

Sources for this narrative:

1.  Center on Budget and Policy Priorities. (2023). Chart book: Tracking the recovery from the pandemic recession. Retrieved from: https://www.cbpp.org/research/economy/tracking-the-recovery-from-the-pandemic-recession

2.  Bohn, S., et al. (2022). Making sense of California's economy. Public Policy Institute of California. Retrieved from: https://www.ppic.org/publication/making-sense-of-californias-economy

3.  Kimberlin, S., & Anderson, A. (2022). In good times and bad, California's black and Latinx workers bear the burden of unemployment. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/in-good-times-and-bad-californias-black-and-latinx-workers-bear-the-burden-of-unemployment

4.  National Academies of Sciences, Engineering, and Medicine. (2023). Addressing the long-term effects of the COVID-19 pandemic on children and families. National Academies Press. Retrieved from: https://nap.nationalacademies.org/catalog/26809/addressing-the-long-term-effects-of-the-covid-19-pandemic-on-children-and-families

5.  Children Now. (2023). 2023 pro-kid policy agenda for California. Retrieved from: https://www.childrennow.org/portfolio-posts/the-2023-pro-kid-policy-agenda

6.  California Governor's Council for Post-Secondary Education (2021). Recovery with equity: A roadmap for higher education after the pandemic. Retrieved from: https://postsecondarycouncil.ca.gov/initiatives/recovery-with-equity

7.  Ross, M., et al. (2020). Work-based learning can advance equity and opportunity for America's young people. Brookings Metropolitan Policy Program. Retrieved from: https://www.brookings.edu/research/work-based-learning-can-advance-equity-and-opportunity-for-americas-young-people

8.  Young, M., & Andrews, E. (2023). Addressing economic inequity with a whole-of-government approach: Recommendations for aligning federal subsidized employment investments. Center for Law and Social Policy. Retrieved from: https://www.clasp.org/publications/report/brief/economic-inequity-whole-government-approach

9.  Lower-Basch, E., & Burnside, A. (2023). TANF 101: Work participation rate. Center for Law and Social Policy. Retrieved from: https://www.clasp.org/publications/report/brief/tanf-101-work-participation-rate

10.  Kimberlin, S. (2023). Harmful obstacles: CalWORKs work participation rate (WPR) penalty. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/harmful-obstacles-calworks-work-participation-rate-wpr-penalty

11.  Schumacher, K. (2022). Paid family leave payments don't add up for California workers. California Budget and Policy Center. Retrieved from: https://calbudgetcenter.org/resources/paid-family-leave-program-is-out-of-reach-for-many-californians

12.  Center on Budget and Policy Priorities. (2021). Policy basics: Unemployment insurance. Retrieved from: https://www.cbpp.org/research/economy/unemployment-insurance
How Children Are Faring
In 2022, more than 28% of California children living in families had no parent with full time, year-round employment in the previous 12 months, compared with fewer than 26% of children nationwide. At the local level, 2016-2020 estimates of children without secure parental employment ranged from less than 10% to more than 50% across California cities, school districts, and counties with populations of at least 10,000.

California and U.S. unemployment rates, after reaching twenty-year lows in 2019 (4.2% and 3.7%, respectively), more than doubled in 2020, the first year of the COVID-19 pandemic. An estimated 1.9 million California workers (10.1%) were unemployed in 2020, with rates across counties ranging from 7% to more than 20%.