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Unobserved Variables and the Elusive Added Worker Effect

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Author Info
Maloney, Tim
Abstract

Consistent with recent empirical work, this study finds no evidence of the "added worker effect" among married couples in the U.S. It is hypothesized that unobserved variables may be obscuring this added worker behavior. This hypothesis is rejected. The labor supply behavior of married women is influenced by the permanent, and not the transitory, nature of their spouses' unemployment. Wives with frequently unemployed husbands have lower reservation wages. Yet, apart from their measured human capital, these same women face persistently lower wage rates and higher unemployment propensities in the labor market. As a result, married women with unemployed spouses are no more likely to be in the labor force, and are actually less likely to be employed than observationally equivalent married women with employed spouses. Copyright 1991 by The London School of Economics and Political Science.

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Publisher Info
Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 58 (1991)
Issue (Month): 230 (May)
Pages: 173-87
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Handle: RePEc:bla:econom:v:58:y:1991:i:230:p:173-87

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  1. Nilsson, William, 2005. "Equality of Opportunity, Heterogeneity and Poverty," UmeÃ¥ Economic Studies 652, Umeå University, Department of Economics. [Downloadable!]
  2. Nilsson, William, 2005. "Unemployment, Splitting Up and Spousal Income Replacement," UmeÃ¥ Economic Studies 651, Umeå University, Department of Economics. [Downloadable!]
  3. Rob Euwals & Marike Knoef & Daniel van Vuuren, 2007. "The Trend in Female Labour Force Participation: What Can Be Expected for the Future?," IZA Discussion Papers 3225, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Rob Euwals & Marike Knoef & Daniel van Vuuren, 2007. "The trend in female labour force participation," CPB Discussion Papers 93, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  5. Aedin Doris, 1999. "The Means Testing of Benefits and the Labour Supply of the wives of Unemployed Men: Results from a Fixed Effects Model," Economics, Finance and Accounting Department Working Paper Series n930999, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth. [Downloadable!]
  6. Cunningham, Wendy V., 2001. "Breadwinner or caregiver? - how household role affectslabor choices in Mexico," Policy Research Working Paper Series 2743, The World Bank. [Downloadable!]
  7. Matthieu Bunel, 2002. "Added worker effect revisited through the French working time reduction experiment," Post-Print halshs-00178452_v1, HAL. [Downloadable!]
  8. Hazel Jean Malapit & Jade Eric Redoblado & Deanna Margarett Cabungcal-Dolor & Jasmin Suministrado, 2006. "Labor Supply Responses to Adverse Shocks under Credit Constraints: Evidence from Bukidnon, Philippines," Cahiers de recherche PMMA 2006-15, PEP-PMMA. [Downloadable!]
  9. Aedin Doris;, 1999. "The Means Testing Of Benefits And The Labour Supply Of The Wives Of Unemployed Men: Results From A Mover-Stayer Model," Economics, Finance and Accounting Department Working Paper Series n940999, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth. [Downloadable!]
  10. Janet S. Netz, Jon D. Haveman, 1999. "All In The Family: Family, Income, And Labor Force Attachment," Feminist Economics, Taylor and Francis Journals, vol. 5(3), pages 85-106, November. [Downloadable!] (restricted)
  11. Pieter Serneels, 2004. "The Added Worker Effect and Intrahousehold Aspects of Unemployment," Development and Comp Systems 0409014, EconWPA. [Downloadable!]
  12. Prieto-Rodríguez, Juan & Rodríguez-Gutiérrez, César, 2000. "Participation of Married Women in the Labour Market and the 'Added Worker Effect' in Europe," IRISS Working Paper Series 2000-12, IRISS at CEPS/INSTEAD. [Downloadable!]
  13. Basu, Kaushik & Genicot, Garance & Stiglitz, Joseph E., 2000. "Unemployment and Wage Rigidity When Labor Supply Is a Household Decision," Working Papers 00-10, Cornell University, Center for Analytic Economics. [Downloadable!]
    Other versions:
  14. Jonathan Gruber & Julie Berry Cullen, 1996. "Spousal Labor Supply as Insurance: Does Unemployment Insurance Crowd Outthe Added Worker Effect?," NBER Working Papers 5608, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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