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Husband’s Unemployment and Wife’s Labor Supply – The Added Worker Effect across Europe

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Author Info

  • Julia Bredtmann

    ()
    (Department of Economics and Business, Aarhus University, Denmark)

  • Sebastian Otten

    (Ruhr University Bochum)

  • Christian Rulff

    (RWI Essen)

Abstract

This paper investigates the responsiveness of women’s labor supply to their husband’s loss of employment – the so-called added worker effect. While previous empirical literature on this topic mainly concentrates on a single country, we take an explicit internationally comparative perspective and analyze whether the added worker effect varies across the European countries. In doing so, we use longitudinal data from the European Union Statistics on Income and Living Conditions (EU-SILC) covering the period 2004 to 2011. For our pooled sample of 28 European countries, we find evidence for the existence of an added worker effect, both at the extensive and at the intensive margin of labor supply. Women whose husbands become unemployed have a higher probability of entering the labor market and changing from part-time to full-time employment than women whose husbands remain employed. However, our results further reveal that the added worker effect varies over both the business cycle and the different welfare regimes within Europe.

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Bibliographic Info

Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2014-13.

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Length: 45
Date of creation: 08 May 2014
Date of revision:
Handle: RePEc:aah:aarhec:2014-13

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Web page: http://www.econ.au.dk/afn/

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Keywords: added worker effect; labor supply; unemployment; cross-country analysis;

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  1. Spletzer, James R, 1997. "Reexamining the Added Worker Effect," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 417-27, April.
  2. James X. Sullivan, 2005. "Borrowing during unemployment: unsecured debt as a safety net," Proceedings 958, Federal Reserve Bank of Chicago.
  3. Melvin Stephens Jr., 2001. "Worker Displacement and the Added Worker Effect," NBER Working Papers 8260, National Bureau of Economic Research, Inc.
  4. Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
  5. Juan Prieto-Rodriguez & Cesar Rodriguez-Gutierrez, 2000. "The added worker effect in the Spanish case," Applied Economics, Taylor & Francis Journals, vol. 32(15), pages 1917-1925.
  6. Susan Parker & Emmanuel Skoufias, 2004. "The added worker effect over the business cycle: evidence from urban Mexico," Applied Economics Letters, Taylor & Francis Journals, vol. 11(10), pages 625-630.
  7. Ortigueira, Salvador & Siassi, Nawid, 2013. "How important is intra-household risk sharing for savings and labor supply?," Journal of Monetary Economics, Elsevier, vol. 60(6), pages 650-666.
  8. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2005. "Female Labor Supply As Insurance Against Idiosyncratic Risk," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 755-764, 04/05.
  9. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-72, July.
  10. repec:ese:iserwp:2013-20 is not listed on IDEAS
  11. Miki Kohara, 2010. "The response of Japanese wives’ labor supply to husbands’ job loss," Journal of Population Economics, Springer, vol. 23(4), pages 1133-1149, September.
  12. Michael C. Burda & Jennifer Hunt, 2011. "What Explains the German Labor Market Miracle in the Great Recession?," SFB 649 Discussion Papers SFB649DP2011-031, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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  14. Samuel Bentolila & Andrea Ichino, 2008. "Unemployment and consumption near and far away from the Mediterranean," Journal of Population Economics, Springer, vol. 21(2), pages 255-280, April.
  15. Cem Baslevent & Ozlem Onaran, 2003. "Are Married Women in Turkey More Likely to Become Added or Discouraged Workers?," LABOUR, CEIS, vol. 17(3), pages 439-458, 09.
  16. Tim Maloney, 1987. "Employment Constraints and the Labor Supply of Married Women: A Reexamination of the Added Worker Effect," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 51-61.
  17. Xiaodong Gong, 2011. "The Added Worker Effect for Married Women in Australia," The Economic Record, The Economic Society of Australia, vol. 87(278), pages 414-426, 09.
  18. Heckman, James J & Macurdy, Thomas E, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 47-74, January.
  19. Kell, Michael & Wright, Jane, 1990. "Benefits and the Labour Supply of Women Married to Unemployed Men," Economic Journal, Royal Economic Society, vol. 100(400), pages 119-26, Supplemen.
  20. Bryan, Mark L. & Longhi, Simonetta, 2013. "Couples' Labour Supply Responses to Job Loss: Boom and Recession Compared," IZA Discussion Papers 7775, Institute for the Study of Labor (IZA).
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Cited by:
  1. Nuno Alves & Carlos Martins, 2014. "Household Income Mobility in the European Union and in Portugal: an Analysis of Labor Market and Demographic Events," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.

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