IDEAS home Printed from https://ideas.repec.org/a/bla/labour/v32y2018i4p174-212.html
   My bibliography  Save this article

How does the Household Labour Supply Respond to the Unemployment of the Household Head?

Author

Listed:
  • Lina Cardona‐Sosa
  • Luz Adriana Flórez
  • Leonardo Fabio Morales
  • Banco de la República

Abstract

In this paper, we explore one of the oldest labour market phenomena documented in the literature: the added worker effect. This refers to the labour supply response of secondary earners of the household to the main earner's job losses. Using longitudinal data for Colombia, we find that when the head of the household becomes unemployed, the labour supply of the female partner increases between 9 and 20 percentage points. Such response appears during the first 6 months of the unemployment spell of the household head. In addition, within 1 year of the unemployment shock, household members under college age were more likely to enter the labour market and less likely to be in tertiary education.

Suggested Citation

  • Lina Cardona‐Sosa & Luz Adriana Flórez & Leonardo Fabio Morales & Banco de la República, 2018. "How does the Household Labour Supply Respond to the Unemployment of the Household Head?," LABOUR, CEIS, vol. 32(4), pages 174-212, December.
    • Handle: RePEc:bla:labour:v:32:y:2018:i:4:p:174-212
    DOI: 10.1111/labr.12138
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/labr.12138
    Download Restriction: no
    File URL: https://libkey.io/10.1111/labr.12138?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Patrick Puhani, 2000. "The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
    2. Duncan Thomas & James P. Smith & Kathleen Beegle & Graciela Teruel & Elizabeth Frankenberg, 2002. "Wages, employment and economic shocks: Evidence from Indonesia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 161-193.
    3. Tindara ADDABBO & Amélia BASTOS & Sara Falcão CASACA & Nata DUVVURY & Áine NÍ LÉIME, 2015. "Gender and labour in times of austerity: Ireland, Italy and Portugal in comparative perspective," International Labour Review, International Labour Organization, vol. 154(4), pages 449-473, December.
    4. Leonardo Fabio Morales & Carlos Medina, 2017. "Assessing the Effect of Payroll Taxes on Formal Employment: The Case of the 2012 Tax Reform in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 75-124, November.
    5. Congregado, Emilio & Golpe, Antonio A. & van Stel, André, 2011. "Exploring the big jump in the Spanish unemployment rate: Evidence on an 'added-worker' effect," Economic Modelling, Elsevier, vol. 28(3), pages 1099-1105, May.
    6. Cem Başlevent & Özlem Onaran, 2003. "Are Married Women in Turkey More Likely to Become Added or Discouraged Workers?," LABOUR, CEIS, vol. 17(3), pages 439-458, September.
    7. Ashenfelter, Orley, 1980. "Unemployment as Disequilibrium in a Model of Aggregate Labor Supply," Econometrica, Econometric Society, vol. 48(3), pages 547-564, April.
    8. Lee, Grace H.Y. & Parasnis, Jaai, 2014. "Discouraged workers in developed countries and added workers in developing countries? Unemployment rate and labour force participation," Economic Modelling, Elsevier, vol. 41(C), pages 90-98.
    9. Spletzer, James R, 1997. "Reexamining the Added Worker Effect," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 417-427, April.
    10. Tamayo, Jorge Andrés & Núñez, Jairo & Medina, Carlos, 2013. "The Unemployment Subsidy Program in Colombia: An Assessment," IDB Publications (Working Papers) 4622, Inter-American Development Bank.
    11. Bredtmann, Julia & Otten, Sebastian & Rulff, Christian, 2014. "Husband's Unemployment and Wife's Labor Supply – The Added Worker Effect across Europe," Ruhr Economic Papers 484, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Fernandes, Reynaldo & de Felicio, Fabiana, 2005. "The Entry of the Wife into the Labor Force in Response to the Husband's Unemployment: A Study of the Added Worker Effect in Brazilian Metropolitan Areas," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 887-911, July.
    13. 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.
    14. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    15. Melvin Stephens, 2002. "Worker Displacement and the Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 504-537, July.
    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. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2016. "Determinantes del acceso al crédito formal e informal: Evidencia de los hogares de ingresos medios y bajos en Colombia," Borradores de Economia 956, Banco de la Republica de Colombia.
    18. Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
    19. 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, September.
    20. David C. Ribar, 1992. "Child Care and the Labor Supply of Married Women: Reduced Form Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 134-165.
    21. Martha Bottia & Lina Cardona-Sosa & Carlos Medina, 2012. "El SISBEN como mecanismo de focalización individual del régimen subsidiado en salud en Colombia: ventajas y limitaciones," Revista de Economía del Rosario, Universidad del Rosario, December.
    22. Emanuela Ghignoni & Alina Verashchagina, 2016. "Added worker effect during the Great Recession: evidence from Italy," International Journal of Manpower, Emerald Group Publishing Limited, vol. 37(8), pages 1264-1285, November.
    23. Alfonso, Viviana & Arango, Luis Eduardo & Arias, Fernando & Cangrejo, Guillermo & Pulido, José David, 2012. "Ciclos de negocios en Colombia, 1975-2011," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 78, pages 115-149, May.
    24. 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.
    25. Laurine Martinoty, 2014. "Intra-Household Coping Mechanisms in Hard Times: the Added Worker Effect in the 2001 Argentine Economic Crisis," Post-Print halshs-01076566, HAL.
    26. Bruce A. Weinberg & Patricia B. Reagan & Jeffrey J. Yankow, 2004. "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 891-924, October.
    27. Masaru Sasaki, 2002. "The Causal Effect of Family Structure on Labor Force Participation among Japanese Married Women," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 429-440.
    28. 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 546-572, July.
    29. James J. Heckman & Thomas E. Macurdy, 1980. "A Life Cycle Model of Female Labour Supply," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 47-74.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Morales, Leonardo Fabio & Medina, Daniel, 2019. "Fluidez del mercado laboral y resultados en materia de empleo en Colombia: evidencia derivada de datos enlazados de empleadores y empleados," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    2. Morales, Leonardo Fabio & Medina, Daniel, 2019. "Labour market fluidity and employment outcomes in Colombia: evidence from employer-employee linked data," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    3. Carina Keldenich & Andreas Knabe, 2022. "Women’s Labor Market Responses to Their Partners’ Unemployment and Low-Pay Employment," Journal of Labor Research, Springer, vol. 43(1), pages 134-162, March.
    4. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lina Cardona-Sosa & Luz Adriana Flórez & Leonardo Morales Zurita, 2016. "Intra-household labour supply after an unemployment event: The added worker effect," Borradores de Economia 944, Banco de la Republica de Colombia.
    2. Julia Bredtmann & Sebastian Otten & Christian Rulff, 2014. "Husband’s Unemployment and Wife’s Labor Supply – The Added Worker Effect across Europe," Economics Working Papers 2014-13, Department of Economics and Business Economics, Aarhus University.
    3. Joaquín Serrano & Leonardo Gasparini & Mariana Marchionni & Pablo Glüzmann, 2019. "Economic cycle and deceleration of female labor force participation in Latin America," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 53(1), pages 1-21, December.
    4. Huang, Fung-Mey & Luh, Yir-Hueih & Huang, Fung-Yea, 2012. "Unemployment information and wives’ labor supply responses to husbands’ job loss in Taiwan," China Economic Review, Elsevier, vol. 23(4), pages 1176-1194.
    5. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.
    6. Ayhan, Sinem H., 2015. "Evidence of Added Worker Effect from the 2008 Economic Crisis," IZA Discussion Papers 8937, Institute of Labor Economics (IZA).
    7. Aysit Tansel & Zeynel Abidin Ozdemir, 2018. "Unemployment invariance hypothesis, added and discouraged worker effects in Canada," International Journal of Manpower, Emerald Group Publishing Limited, vol. 39(7), pages 929-936, October.
    8. Aysit Tansel & Zeynel Abidin Ozdemir, 2016. "Unemployment Invariance Hypothesis, Added and Discouraged Worker Effects in Canada?," ERC Working Papers 1717, ERC - Economic Research Center, Middle East Technical University, revised Dec 2017.
    9. Sinem H. Ayhan, 2018. "Married women’s added worker effect during the 2008 economic crisis—The case of Turkey," Review of Economics of the Household, Springer, vol. 16(3), pages 767-790, September.
    10. Fadlon, Itzik & Nielsen, Torben Heien, 2019. "Household labor supply and the gains from social insurance," Journal of Public Economics, Elsevier, vol. 171(C), pages 18-28.
    11. Bhalotra, Sonia R. & Umana-Aponte, Marcela, 2010. "The Dynamics of Women's Labour Supply in Developing Countries," IZA Discussion Papers 4879, Institute of Labor Economics (IZA).
    12. Jan Gromadzki, 2019. "The Added Worker Effect, Employment Contracts, and the Reasons for the Wife’s Inactivity," IBS Working Papers 02/2019, Instytut Badan Strukturalnych.
    13. repec:zbw:rwirep:0484 is not listed on IDEAS
    14. Julio Guzman, 2014. "Social Protection and Private Coping Strategies During Recessions: Evidence from Chile," Working Papers wp_041, Adolfo Ibáñez University, School of Government.
    15. Giannakopoulos, Nicholas, 2015. "The added worker effect of married women in Greece during the Great Depression," MPRA Paper 66298, University Library of Munich, Germany.
    16. Umaña-Aponte, Marcela & Bhalotra, Sonia R., 2012. "Women's Labour Supply and Household Insurance in Africa," WIDER Working Paper Series 066, World Institute for Development Economic Research (UNU-WIDER).
    17. Marcela Umaña-Aponte & Sonia Bhalotra, 2012. "Women's Labour Supply and Household Insurance in Africa," WIDER Working Paper Series wp-2012-066, World Institute for Development Economic Research (UNU-WIDER).
    18. Ayhan, Sinem H., 2014. "How Do Married Women Respond When Their Husbands Lose Their Jobs? Evidence from Turkey During the Recent Crisis," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100387, Verein für Socialpolitik / German Economic Association.
    19. repec:unu:wpaper:wp2012-66 is not listed on IDEAS
    20. Karao?lan, Deniz & Okten, Cagla, 2012. "Labor Force Participation of Married Women in Turkey: Is There an Added or a Discouraged Worker Effect?," IZA Discussion Papers 6616, Institute of Labor Economics (IZA).
    21. Doreen Triebe, 2015. "The Added Worker Effect Differentiated by Gender and Partnership Status: Evidence from Involuntary Job Loss," SOEPpapers on Multidisciplinary Panel Data Research 740, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:labour:v:32:y:2018:i:4:p:174-212. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.