The child component's output event is called if you call the component's onTestOutputButtonClick() function directly, but if you try and emit an event from inside the service's callback, no event is emitted.

child.component.ts

//Component Declaration
export class ChildComponent {
	@Output() onOutputEvt: EventEmitter<any> = new EventEmitter<any>();
	
	onTestOutputButtonClick() {
		this.onOutputEvt.emit({data: 'Emitted data'});
	}
	
	makeAnUpdate(form) {
    this._service.makeDbCall(data).subscribe(result => {
        this.variable = result;
        this.onOutputEvt.emit({data: 'Emitted data'});
    });
}
}

parent.component.html

<child-component (onOutputEvt)="handleChildOutput($event)"></child-component>

parent.component.ts

//Component declaration
export class ParentComponent {
	handleChildOutput(outputData: any) {
		console.log('I received output from the child component');
	}
}