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Is There a Desired Added Worker Effect?: Evidence from Involuntary Job Losses

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  • Mattis Beckmannshagen
  • Rick Glaubitz

Abstract

Existing research has found little to no evidence for an added workereffect. However, studies to date have only analysed individuals’ actual labor supply responses to their partners’ job loss, neglecting to consider a potential mismatch between desired and actual labor supply adjustments. Using data from the German Socio-Economic Panel (SOEP), we study individuals’ changes in actual and desired working hours after their partners’ involuntary job loss in an event study design. Our results show that neither desired nor actual working hours change significantly. Thus, we provide first evidence that the absence of the added worker effect is in line with individuals’ stated labor supply preferences and is not the result of an inability to realise desired working hours

Suggested Citation

  • Mattis Beckmannshagen & Rick Glaubitz, 2023. "Is There a Desired Added Worker Effect?: Evidence from Involuntary Job Losses," SOEPpapers on Multidisciplinary Panel Data Research 1200, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp1200
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    More about this item

    Keywords

    labor supply; desired working hours; added worker effect; event study;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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