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Family Job Search and Wealth: The Added Worker Effect Revisited

Author

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  • J. Ignacio Garcia-Perez
  • Sílvio Rendon

Abstract

We develop and estimate a model of family job search and wealth accumulation. Individuals' job finding and job separations depend on their partners' job turnover and wages as well as common wealth. We fit this model to 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, particularly during economic downturns. We uncover a job search-theoretic basis for this added worker effect and find that this effect is stronger with more children in the household. We also show that excluding wealth and savings from the analysis and estimation leads to underestimating the interdependency between household members. Our analysis shows that the policy goal of supporting job search by increasing unemployment transfers is partially offset by a partner's lower unemployment and wages.

Suggested Citation

  • J. Ignacio Garcia-Perez & Sílvio Rendon, 2016. "Family Job Search and Wealth: The Added Worker Effect Revisited," Working Papers 16-34, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:16-34
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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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    Cited by:

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    2. Serrano, Joaquín & Gasparini, Leonardo & Marchionni, Mariana & Glüzmann, Pablo, 2019. "Economic cycle and deceleration of female labor force participation in Latin America," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 53(1), pages .13(1-21).
    3. 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

    Keywords

    job search; asset accumulation; household economics; consumption; unemployment; estimation of dynamic structural models;
    All these keywords.

    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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