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The added worker effect over the business cycle: evidence from urban Mexico

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  • Susan Parker
  • Emmanuel Skoufias

Abstract

This paper investigates whether the added worker effect is an important determinant of the increased labour force participation by women and whether the magnitude of the added worker effect differs between the peak and trough of the business cycle. Use is made of repeated observations from spouses in urban Mexico, collected during the Peso crisis (1994:4-1995:4) and during the period of economic prosperity (1998:4-1999:4). Significant added worker effects are found in both periods. The magnitude of the added worker effect during the crisis period is found to be twice as large as that observed during the period of economic prosperity.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:apeclt:v:11:y:2004:i:10:p:625-630
    DOI: 10.1080/1350485042000235693
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    References listed on IDEAS

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    1. Kim B. Clark & Lawrence H. Summers, 1981. "Demographic Differences in Cyclical Employment Variation," Journal of Human Resources, University of Wisconsin Press, vol. 16(1), pages 61-79.
    2. 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.
    3. Lundberg, Shelly, 1985. "The Added Worker Effect," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 11-37, January.
    4. 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.
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