Does Paternal Unemployment Affect Young Adult Offspring's Personality?

Using longitudinal data from the German Socio-Economic Panel (SOEP), we analyze the impact of paternal unemployment on the “big five” personality traits of young adult offspring aged 17–25. Results from longitudinal value-added models for personality show that paternal unemployment makes offspring significantly more conscientious and—to a smaller extent—less neurotic. The uncovered effects are robust to the presence of selection on unobservables and correlation between the error term and the lagged outcome. We also discuss heterogeneous effects and the potential mechanisms behind our findings.