Perhaps because they are growing, constantly changing in size, in appearance and in emotional and intellectual maturity, children thrive best in a stable environment. In a stable environment young people can use all of the adaptive energies to coping with changes within themselves. When a parent, or parents, lose their jobs, this is a major source of instability. Parents themselves change and may become depressed and unhappy. The financial problems put a stress on the marriage, and couples who got along well before may become sullen and withdrawn, or engage in frequent quarreling and recrimination.

The impact of job loss on children has been well documented. In a University of California Davis study, for example, children from a household in which a parent has lost a job were 15 percent more likely to repeat a grade than were children from homes where job loss had not occurred. Parents who have lost a job may be too preoccupied with their own distress, to fully appreciate the impact of job loss on their children. Most of the research suggests that it is the changes in the emotional climate, rather than the financial sacrifices that are the most harmful to children. Coping with parental depression and quarreling can drain the energy they need for their own personal growth and development.

Studies suggest that the impact of job loss is greater for men than it is for women. Even in our liberated society men seem still to take the role of breadwinner as an all important part of their identity. When men lose their jobs they do not usually take on more household or childcare responsibilities. In contrast, women who lose their jobs tend to spend more time with their children and this may help them to see at least one positive consequence of job loss. Even if parents do get new jobs these are often at lower levels and salaries than what they had previously and this can be a source of continued stress and unhappiness.

Some writers have argued that job loss can have benefits for the family. They argue that the family now has more time together, and spend less time on computers, the Internet, or personal hobbies like golfing. Working together to cope with their financial problems can be a source of strength for children who are made to feel that they are part of the solution to the problem. While this may be true for some families, it is far from being the rule and is more likely to be the exception. It is but another example of the adage that the same fire that softens the carrot hardens the egg.

There is no simple answer to the traumas caused by job loss during a recession, or at any time, for that matter. If parents appreciate that their children are hurting as much as they are, they will be open with them about the situation and involve the children in making adaptations to their new life circumstance. This can help reduce the stress for everyone.