Older couples' labour market reactions to family disruptions
In this paper, I analyse how spouses in older couples react to â€˜shocksâ€™ or â€˜surprisesâ€™ in their partnerâ€™s labour income using data from the British Household Panel Survey, 1991-2004. Wivesâ€™ labour supply proves to be much more sensitive to shocks than husbandsâ€™. After a divorce or separation, wives reduce their labour supply while the effect on husbandsâ€™ labour supply is positive or not statistically significant. If a wife becomes unemployed, it does not affect her husbandâ€™s labour supply while wives whose husband becomes unemployed reduce their labour supply, too. A decline in husbandâ€™s health causes the wife to reduce her working hours while husbands tend to increase their labour supply when facing a decline in wifeâ€™s health. Partnerâ€™s death does not have statistically significant labour supply effects. Negative income shocks due to other reasons (such as choice) tend to reduce partnerâ€™s labour supply and vice versa, but only slightly.
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