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The Added Worker Effect and the Discouraged Worker Effect for Married Women in Australia

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Author Info

  • Gong, Xiaodong

    ()
    (NATSEM, University of Canberra)

Abstract

This paper investigates both the added worker effect (the labour supply responses of women to their partners' job losses) and the discouraged worker effect (workers withdrawing from the labour market because of failed searches) for married women in Australia, with the emphasis on the former. We focus on the partners’ involuntary job loss experiences, and analyse women's labour market activities in the periods before and after their partners’ job loss. By estimating fixed effects labour supply equations using the first seven waves of data from the HILDA Survey, we find a significant added worker effect in terms of increased full time employment and working hours. The findings also suggest that it is harder for the female partners of males who have recently lost jobs to enter the labour market than for those already working to increase their working hours to compensate for lost income incurred by their partners’ job loss. We also find the effect to be persistent in that, one year after the partners’ job loss, more of those women would still like to work longer hours than they actually were. By investigating the relationship between self-assessed job-finding probability on job-seekers’ subsequent labour force participation, and by studying the relationship between labour force participation of all married women and the regional unemployment rate, we also find a substantial discouraged worker effect.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4816.

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Length: 26 pages
Date of creation: Mar 2010
Date of revision:
Publication status: published as 'The Added Worker Effect for Married Women in Australia' in: Economic Record, 2011, 87 (278), 414 - 426
Handle: RePEc:iza:izadps:dp4816

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Related research

Keywords: discouraged worker effect; panel data; added worker effect;

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Cited by:
  1. Böhm, Kathrin, 2011. "Schätzung der Stillen Reserve mit dem Mikrozensuspanel 2001-2004 : eine Machbarkeitsstudie," IAB-Forschungsbericht 201102, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Fuchs, Johann & Weber, Brigitte, 2010. "Umfang und Struktur der westdeutschen Stillen Reserve : Aktualisierte Schätzungen (Extent and structure of the hidden labour force in Western German)," IAB-Forschungsbericht 201011, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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