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Objective: This paper studies the consequences of maternal unemployment in single-mother families on the mental health of adolescent children.

Background: The impact of parental unemployment on the health and well-being of children has received increasing attention in recent years, but little is known about these cross-over effects in single-mother households - a particularly vulnerable family setting for maternal unemployment and child health.

Method: We use data from a large, register-based panel of Finnish adolescents aged 15-21 years in 1996-2019 (n = 130,520), with repeated measures of prescribed psychotropic medication purchases in six-month periods. Event study difference-in-difference models - adjusting for time-invariant characteristics - are employed to investigate the association between maternal unemployment and adolescents’ psychotropic medication purchases.

Results: Maternal unemployment is associated with a small increase in psychotropic medication purchases, especially about two years after the transition to unemployment. While the point estimates are similar for both boys and girls, the estimates for girls remain non-significant. The observed patterns cannot be explained by changes in maternal income after job loss, and non-resident fathers’ income did not clearly mitigate the negative effects of single mother unemployment on adolescent psychotropic medication purchases.

Conclusion: Maternal unemployment in single-mother households is modestly associated with adolescent mental health, highlighting the need for targeted support for this vulnerable group.