Added worker effect revisited through the French working time reduction experiment
AbstractThis paper studies the impact of the French working time reduction experiment on the family labour supply. I expanded on the conventional added worker effect in order to analyse successively the effect of the ''35 hours'' on two dimensions of the spouse's labour supply: the probability to participate in the labour market and the working hours. Econometric tests are carried out on 10 000 couples drawn from the French EMPLOI survey of the INSEE. In the first estimation using Heckman's and Cogan's fixed costs frameworks, I found that working time reduction reduces the spouse's working hours when he (she) works. In the second one, using a multivariate probit analysis, I found that it increases the spouse's probability to join the labour force when he (she) was outside of the labour market in the previous period.
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added worker effect; family labour supply; fixed costs; multivariate probit; simultaneous equations; Working time reduction;
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