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The rise of the added worker effect

Author

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  • Mankart, Jochen
  • Oikonomou, Rigas

Abstract

We document that the added worker effect (AWE) has increased over the last three decades. We develop a search model with two earner households and we illustrate that the increase in the AWE from the 1980s to the 2000s can be explained through (i) the narrowing of the gender pay gap, (ii) changes in the frictions in the labor market and (iii) changes in the labor force participation costs of married women.

Suggested Citation

  • Mankart, Jochen & Oikonomou, Rigas, 2016. "The rise of the added worker effect," Economics Letters, Elsevier, vol. 143(C), pages 48-51.
    • Handle: RePEc:eee:ecolet:v:143:y:2016:i:c:p:48-51
    DOI: 10.1016/j.econlet.2016.03.019
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    Cited by:

    1. Amaia Altuzarra & Catalina Gálvez-Gálvez & Ana González-Flores, 2019. "Economic Development and Female Labour Force Participation: The Case of European Union Countries," Sustainability, MDPI, vol. 11(7), pages 1-18, April.
    2. Alexandre Ounnas, 2020. "Worker Flows, Occupations and the Dynamics of Unemployment and Labor Force Participation," LIDAM Discussion Papers IRES 2020009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Kawano, Laura & LaLumia, Sara & Ramnath, Shanthi & Stevens, Michael, 2025. "Who picks up the slack? Understanding spousal responses to unemployment spells," Labour Economics, Elsevier, vol. 96(C).
    4. Bacher, Annika & Grübener, Philipp & Nord, Lukas, 2025. "Joint search over the life cycle," Journal of Monetary Economics, Elsevier, vol. 150(C).
    5. Emilio Congregado & Ewa Galecka-Burdziak & Antonio A. Golpe & Robert Pater, 2021. "Separating aggregate discouraged and added worker effects: the case of a former transition country," Oeconomia Copernicana, Institute of Economic Research, vol. 12(3), pages 729-760, September.
    6. 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.
    7. Francisco Perez‐Arce & María J. Prados, 2021. "The Decline In The U.S. Labor Force Participation Rate: A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 35(2), pages 615-652, April.
    8. Möhlmann, Axel & Vogel, Edgar, 2025. "When unemployment hits mortgage loans," VfS Annual Conference 2025 (Cologne): Revival of Industrial Policy 325418, Verein für Socialpolitik / German Economic Association.
    9. Bod’a, Martin & Považanová, Mariana, 2021. "Output-unemployment asymmetry in Okun coefficients for OECD countries," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 307-323.
    10. Nezih Guner & Yuliya Kulikova & Arnau Valladares-Esteban, 2025. "Does the Added Worker Effect Matter?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 56, April.
    11. Connolly, Laura E. & Jolly, Nicholas A., 2024. "Temporal Changes to the Added Worker Effect Associated with Spousal Job Loss," GLO Discussion Paper Series 1454, Global Labor Organization (GLO).
    12. Şule Akkoyunlu, 2024. "Testing Okun’s Law for Turkey (1923-2019)," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 48(2), pages 113-132, April.

    More about this item

    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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