Female Labor Supply As Insurance Against Idiosyncratic Risk
AbstractIn this paper, we explore the role of female labor supply as an insurance mechanism against idiosyncratic earnings risk within the family. We use a life-cycle model in which a unitary family makes consumption, saving, and labor supply decisions. Additional uncertainty increases female participation rates. This effect on participation is greatest when the ability to borrow (and hence to smooth consumption) is limited. We calculate the welfare cost of increases in uncertainty and show that the welfare cost is greater when households are unable to adjust female labor supply. (JEL: J22, D91) Copyright (c) 2005 The European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 3 (2005)
Issue (Month): 2-3 (04/05)
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Web page: http://www.mitpressjournals.org/jeea
Find related papers by JEL classification:
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
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