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Family job search and wealth: The added worker effect revisited

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  • J. Ignacio García‐Pérez
  • Sílvio Rendon

Abstract

We propose and estimate a model of family job search and wealth accumulation with data from the Survey of Income and Program Participation (SIPP). This dataset reveals a very asymmetric labor market for household members who share that their job finding is stimulated by their partners' job separation. We uncover a job search‐theoretic basis for this added worker effect, which occurs mainly during economic downturns, but also by increased nonemployment transfers. Thus, our analysis shows that the policy goal of increasing nonemployment transfers to support a worker's job search is partially offset by the spouse's cross effect of decreased nonemployment and wages. The added worker effect is robust to having more children and more education in the household and does not just result as a composition of heterogeneous individuals. We also show that the interdependency between household members is understated if wealth and savings are not considered. Finally, we show that gender equality in the labor market not only improves women's labor market performance, but it also increases men's accepted wages and nonemployment rates.

Suggested Citation

  • J. Ignacio García‐Pérez & Sílvio Rendon, 2020. "Family job search and wealth: The added worker effect revisited," Quantitative Economics, Econometric Society, vol. 11(4), pages 1431-1459, November.
  • Handle: RePEc:wly:quante:v:11:y:2020:i:4:p:1431-1459
    DOI: 10.3982/QE1092
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Family Job Search and Wealth: The Added Worker Effect Revisited
      by Christian Zimmermann in NEP-DGE blog on 2018-10-10 14:51:53

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    2. Christine Braun & Charlie Nusbaum & Peter Rupert, 2021. "Labor Market Dynamics and the Migration Behavior of Married Couples," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 42, pages 239-263, October.
    3. Valeria Rueda & Guillaume Wilemme, 2021. "Career Paths with a Two-Body Problem: Occupational Specialization and Geographic Mobility," Upjohn Working Papers and Journal Articles 21-346, W.E. Upjohn Institute for Employment Research.
    4. Hanming Fang & Andrew J. Shephard, 2019. "Household Labor Search, Spousal Insurance, and Health Care Reform," NBER Working Papers 26350, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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