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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
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    File URL: https://doi.org/10.1111/labr.12138
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    References listed on IDEAS

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    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. 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.

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