Scarred or Spared? A Review of Micro- and Macro-Level Unemployment’s Effects on Children’s Education and Careers

Unemployment has profound implications for individuals and societies. The impact of micro- (i.e., parental) and macro-level (i.e., local, regional, or national) unemployment on children’s education and career outcomes is particularly relevant, as detrimental effects may perpetuate a vicious cycle, with unemployment causing more unemployment. This review has two parts. First, in a narrative review, we synthesize the theoretical perspectives on the short- and long-term effects of micro- and macro-level unemployment on children’s education and careers. To do so, we draw on three main theoretical perspectives: the economic, the homophily, and the stress perspective. Second, in a systematic review, we summarize studies conducted from 1979 to 2024 worldwide across economics, sociology, psychology, education sciences, and public health, adopting an integrative, multidisciplinary approach. Key findings reveal that micro-level unemployment adversely affects children’s educational and career outcomes, whereas macro-level unemployment appears to have both beneficial and detrimental effects. Our results underscore the importance of probing homology (i.e., whether macro- and micro-level effects go in the same direction) when assessing unemployment’s impact on children’s education and careers, as this paper shows that effects on the micro- and macro-level are not necessarily the same. Future research should focus on investigating mediating mechanisms of the relationship between macro- and micro-level unemployment and children’s education and career outcomes. Additionally, we need more research on the topic from countries that are not western, educated, industrialized, rich, and democratic (WEIRD). We provide recommendations for parental and professional caregivers, teachers, and principals, as well as decision-makers in politics and organizations.