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Intra-Household Coping Mechanisms in Hard Times : the Added Worker Effect in the 2001 Argentine Economic Crisis

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  • Laurine Martinoty

    () (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper shows that the added worker effect (AWE) plays an important role in coping against aggregate shocks, even in cases where the discouragement effect prevails at a macroeconomic scale. Using an Argentine panel dataset between 2000-2002, we instrument the endogenous variation in the labor market outcomes of household heads using the collapse of the Convertibility era as a natural experiment, and measure its causal impact on their spouses' labor supply decisions. Within this framework, we show that a woman whose husband experiences the average decline in income is 4.4 percentage points more likely to enter the labor market. Out of four new entrants, three work at least one hour weekly, and one even finds a full time job. Heterogeneous effects are in line with expectations, robustness checks support the validity of our empirical strategy, and our results are robust to various sensitivity tests.

Suggested Citation

  • Laurine Martinoty, 2015. "Intra-Household Coping Mechanisms in Hard Times : the Added Worker Effect in the 2001 Argentine Economic Crisis," Working Papers halshs-01133388, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01133388
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01133388
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    References listed on IDEAS

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    Cited by:

    1. Aleksandra Riedl & Florian Schoiswohl, 2015. "Is there an added worker effect? – European labor supply during the crisis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 71-88.
    2. 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).
    3. Lina Cardona-Sosa & Luz Adriana Flórez & Leonardo Morales Zurita, 2016. "Intra-household labour supply after an unemployment event: The added worker effect," Borradores de Economia 944, Banco de la Republica de Colombia.

    More about this item

    Keywords

    panel data; natural experiment; instrumental variable; Added worker effect; married women labor market participation;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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