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Job Displacement, Family Dynamic, and Spousal Labor Supply

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  • Halla, Martin
  • Schmieder, Julia
  • Weber, Andrea

Abstract

We study the effectiveness of intra-household insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and earnings losses, while wives' labor supply increases moderately due to extensive margin responses. Wives' earnings gains recover only a tiny fraction of the household income loss and, in the short-term, public transfers and taxes are a more important form of insurance. We show that the presence of children in the household is a crucial determinant of the wives' labor supply response.

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  • Halla, Martin & Schmieder, Julia & Weber, Andrea, 2018. "Job Displacement, Family Dynamic, and Spousal Labor Supply," CEPR Discussion Papers 13247, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13247
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    3. Bennett, Patrick & Ravetti, Chiara & Wong, Po Yin, 2021. "Losing in a boom: Long-term consequences of a local economic shock for female labour market outcomes," Labour Economics, Elsevier, vol. 73(C).
    4. Gathmann, Christina & Huttunen, Kristiina & Jernström, Laura & Sääksvuori, Lauri & Stitzing, Robin, 2020. "In Sickness and in Health: Job Displacement and Health Spillovers in Couples," IZA Discussion Papers 13329, Institute of Labor Economics (IZA).
    5. Hannah Illing & Johannes Schmieder & Simon Trenkle, "undated". "The Gender Gap in Earnings Losses after Job Displacement," CRC TR 224 Discussion Paper Series crctr224_2022_381, University of Bonn and University of Mannheim, Germany.
    6. Juliane Hennecke & Astrid Pape, 2020. "Suddenly a Stay-At-Home Dad? Short- and Long-term Consequences of Fathers’ Job Loss on Time Investment in the Household," SOEPpapers on Multidisciplinary Panel Data Research 1112, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Alexander Ahammer & Dominik Grübl & Rudolf Winter-Ebmer, 2020. "The health externalities of downsizing," CDL Aging, Health, Labor working papers 2020-05, The Christian Doppler (CD) Laboratory Aging, Health, and the Labor Market, Johannes Kepler University Linz, Austria.
    8. Schone, Pal & Strom, Marte, 2019. "International Labor Market Competition and Spousal Labor Supply Responses," IZA Discussion Papers 12857, Institute of Labor Economics (IZA).
    9. Martinoty, Laurine, 2022. "Partner’s income shock and female labor supply. Evidence from the repeal of Argentina’s convertibility law," World Development, Elsevier, vol. 159(C).
    10. Andreas Gulyas & Krzysztof Pytka, 2019. "Understanding the Sources of Earnings Losses After Job Displacement: A Machine-Learning Approach," CRC TR 224 Discussion Paper Series crctr224_2019_131, University of Bonn and University of Mannheim, Germany.
    11. Nezih Guner & Yuliya Kulikova & Arnau Valladares-Esteban, 2020. "Does the Added Worker Effect Matter?," Working Papers wp2020_2001, CEMFI.
    12. Meekes, Jordy & Hassink, Wolter H.J., 2022. "Gender differences in job flexibility: Commutes and working hours after job loss," Journal of Urban Economics, Elsevier, vol. 129(C).
    13. Huebener, Mathias & Pape, Astrid & Spiess, C. Katharina, 2020. "Parental labour supply responses to the abolition of day care fees," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 510-543.
    14. Daniel Fackler & Eva Weigt, 2020. "Who Buffers Income Losses after Job Displacement? The Role of Alternative Income Sources, the Family, and the State," LABOUR, CEIS, vol. 34(3), pages 239-276, September.
    15. 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.
    16. Lluis, Stephanie & McCall, Brian, 2022. "Spousal labour supply adjustments to extended benefits weeks: Evidence from Canada," CLEF Working Paper Series 42, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    17. Meekes, Jordy & Hassink, Wolter, 2020. "Fired and Pregnant: Gender Differences in Job Flexibility Outcomes after Job Loss," IZA Discussion Papers 13779, Institute of Labor Economics (IZA).
    18. 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.
    19. Felix Glaser & Gerald Pruckner, 2022. "A Hard Pill to Swallow? Parental Health Shocks and Children's Mental Health," Economics working papers 2022-15, Department of Economics, Johannes Kepler University Linz, Austria.
    20. Schøne, Pål & Strøm, Marte, 2021. "International labor market competition and wives’ labor supply responses," Labour Economics, Elsevier, vol. 70(C).
    21. Jonas Meier, 2020. "Multivariate Distribution Regression," Diskussionsschriften dp2023, Universitaet Bern, Departement Volkswirtschaft.
    22. Bárdits, Anna & Adamecz-Völgyi, Anna & Bisztray, Márta & Weber, Andrea & Szabó-Morvai, Agnes, 2023. "Precautionary Fertility: Conceptions, Births, and Abortions around Employment Shocks," IZA Discussion Papers 15990, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Added Worker Effect; Firm Events; Household Labor Supply; Intra-household Insurance;
    All these keywords.

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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