The Economics of Grief

We study the short-run and long-run economic impact of one of the largest losses that an individual can face; the death of a child. We utilise unique registers on the entire Swedish population, combining information on the date and cause of death with parental outcomes. We exploit the longitudinal dimension of the data and deal with several selection issues. Losing a child has adverse effects on labour income, employment status, marital status and hospitalisation. The value of policy measures aimed at preventing mortal accidents of children is underestimated if it does not take bereavement effects on parents into account.