Abstract
I show that serious, yet common, parental health events in childhood have immediate and lasting effects on mental health and educational outcomes for children. Following a parental health event, the children are more likely to receive therapy and consume anti‐depressant (AD) medication. More so, the children achieve lower test scores and have lower school enrollment rates. The effect immediately occurs following the event and persists at least into early adulthood. I find that the effect on test scores doesn’t differ significantly across family income, but that children from low‐income families are more likely to be prescribed ADs following the event, while children from high‐income families are more likely to receive therapy. Exploiting differences in general practitioners’ behavior in prescribing AD and referring children to therapy, I find suggestive evidence that children who are more exposed to medical treatment of mental health issues have lower educational attainments in early adulthood.
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