child attending class via video call

Around 50% of families saw changes in labour market status during the COVID-19 pandemic. This impacted the emotional development of their children.


Executive summary

The COVID-19 pandemic disrupted many aspects of children’s lives, with impacts on their social and emotional development as well as their educational attainment. School closures increased social and emotional difficulties (Blanden et al., 2021); lack of contact with friends and extended family left some children without a trusted adult to turn to (Newlove-Delgado et al., 2021); and severe illness and death of loved ones increased (Slomski, 2021; Liang, Becker and Rice, 2022). 

In this report, we consider another channel through which the pandemic may have affected children’s social and emotional development: the disruption to parents’ experiences in the labour market created by lockdown restrictions. 

As in many other countries, national lockdowns and wider social distancing measures severely disrupted the UK’s labour market, with many businesses shutting down. The government introduced a range of policies, such as the furlough scheme, to insure workers against the impacts of these closures. Even so, a shifting public health and policy landscape meant that many families had some financial losses during the first year of the pandemic, and/or faced high levels of uncertainty. 

Taken together, parents’ labour market experiences during the pandemic could have affected both a household’s resources and the quality and quantity of time parents and children spent together. Since systematic reviews of children’s mental health during the pandemic consistently suggest that higher socio-economic status and better relationships with parents were protective factors (Ng and Ng, 2022; Theberath et al., 2022), analysing the role that parents’ labour market experiences played in shaping children’s outcomes is crucial for understanding how the pandemic affected children and their development.

Key findings 

1.     Overall, parents reported that their children’s social and behavioural difficulties increased during the first year of the pandemic. Nearly half of parents reported that their child had more socio-emotional difficulties in February 2021 than a year earlier, while around one in six reported fewer challenges. Parents of girls and younger children, and those who were furloughed, were more likely to report worsening in their children’s socio-emotional skills. Among the sample whose survey responses can be linked with administrative education records, we find that less disadvantaged children were more likely to see their (parent-reported) socio-emotional skills worsen, though these differences are not statistically significant. 

2.     Around half of families in our sample saw no change in their labour market status during the first year of the pandemic, including a third of households where all parents remained employed and working throughout. But the families who did have changes in the labour market had diverse experiences – this group was roughly evenly split between households where at least one parent was unemployed for much of the pandemic, households where at least one parent was furloughed most of the time, and households where working was interrupted with shorter bursts of furlough. 

3.     Overall, the socio-emotional skills of children whose families had experienced at least one transition in the labour market were nearly 20% of a standard deviation lower than those of children whose families had stable labour market experiences. Much of this difference existed before the pandemic. But even after accounting for pre-pandemic skills, the children whose families experienced at least one change saw, on average, their socio-emotional development worsen by about 9% of a standard deviation more than those whose families remained consistently employed or unemployed throughout.

4.     Overall, the socio-emotional skills of children whose parents had stable labour market experiences throughout the pandemic – whether employed or unemployed the whole time – held up better on average than the skills of children whose families faced more economic instability. This suggests that it was the stability of parents’ labour market experiences, rather than being in any particular economic state, that was an important determinant of children’s socio-emotional development during the pandemic.

5.     Labour market instability increased parental stress and led to declines in both actual and expected future earnings. These could be important channels through which increased economic uncertainty can have knock-on effects on children’s socio-emotional development

6.     Our findings demonstrate the importance of protecting families during periods of significant economic uncertainty in order to reduce the significant human capital and well-being costs such uncertainty can have not only for the directly affected adults but also for their children.