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The Added Worker Effect Differentiated by Gender and Partnership Status: Evidence from Involuntary Job Loss

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  • Doreen Triebe

Abstract

This paper examines the added worker effect (AWE), which refers to the increase of labor supply of individuals in response to a sudden financial shock in family income, that is, unemployment of their partner. While previous empirical studies focus on married women's response to those shocks, I explicitly analyze the spillover effects of unemployment on both women and men and I also differentiate according to their partnership status (marriage vs. cohabitation). My aim is to evaluate whether intra-household adaptation mechanisms differ by gender and by partnership status. The underlying method is a difference-in-differences setting in combination with an entropy balancing matching procedure. The paper considers plant closures and employer terminations as exogenous forms of unemployment. Using longitudinal data from the German Socio-Economic Panel (SOEP) study from 1991 through 2013, the empirical investigation finds evidence of the existence of an AWE. The effect is largest when a woman enters unemployment and is mainly driven by changes on the intensive margin (increase of hours).

Suggested Citation

  • Doreen Triebe, 2015. "The Added Worker Effect Differentiated by Gender and Partnership Status: Evidence from Involuntary Job Loss," SOEPpapers on Multidisciplinary Panel Data Research 740, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp740
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.498501.de/diw_sp0740.pdf
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    References listed on IDEAS

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    1. Marcus, Jan, 2013. "The Effect of Unemployment on the Mental Health of Spouses – Evidence from plant closures in Germany," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 546-558.
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    3. Adamopoulou, Effrosyni, 2010. "Will you “quasi-marry” me? The rise of cohabitation and decline of marriages," UC3M Working papers. Economics we1026, Universidad Carlos III de Madrid. Departamento de Economía.
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    Cited by:

    1. Katrin Huber & Erwin Winkler, 2016. "All We Need is Love? Trade-Adjustment, Inequality, and the Role of the Partner," SOEPpapers on Multidisciplinary Panel Data Research 873, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Keldenich, Carina & Knabe, Andreas, 2018. "Labor Market Responses to Partners' Unemployment and Low-Pay Employment," Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181558, Verein für Socialpolitik / German Economic Association.
    3. Fackler, Daniel & Hank, Eva, 2016. "Who buffers income losses after job displacement? The role of alternative income sources, the family, and the state," IWH Discussion Papers 28/2016, Halle Institute for Economic Research (IWH).

    More about this item

    Keywords

    Added worker effect; plant closure; unemployment; entropy balancing; intra-household adaptation;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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