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The Added Worker Effect and the Discouraged Worker Effect for Married Women in Australia

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  • Gong, Xiaodong

    () (NATSEM, University of Canberra)

Abstract

This paper investigates both the added worker effect (the labour supply responses of women to their partners' job losses) and the discouraged worker effect (workers withdrawing from the labour market because of failed searches) for married women in Australia, with the emphasis on the former. We focus on the partners’ involuntary job loss experiences, and analyse women's labour market activities in the periods before and after their partners’ job loss. By estimating fixed effects labour supply equations using the first seven waves of data from the HILDA Survey, we find a significant added worker effect in terms of increased full time employment and working hours. The findings also suggest that it is harder for the female partners of males who have recently lost jobs to enter the labour market than for those already working to increase their working hours to compensate for lost income incurred by their partners’ job loss. We also find the effect to be persistent in that, one year after the partners’ job loss, more of those women would still like to work longer hours than they actually were. By investigating the relationship between self-assessed job-finding probability on job-seekers’ subsequent labour force participation, and by studying the relationship between labour force participation of all married women and the regional unemployment rate, we also find a substantial discouraged worker effect.

Suggested Citation

  • Gong, Xiaodong, 2010. "The Added Worker Effect and the Discouraged Worker Effect for Married Women in Australia," IZA Discussion Papers 4816, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4816
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    Cited by:

    1. Fuchs, Johann & Weber, Brigitte, 2010. "Umfang und Struktur der westdeutschen Stillen Reserve : Aktualisierte Schätzungen (Extent and structure of the hidden labour force in Western German)," IAB-Forschungsbericht 201011, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Mazzutti, Caio Cícero Toledo Piza da Costa, 2016. "Three essays on the causal impacts of child labour laws in Brazil," Economics PhD Theses 0616, Department of Economics, University of Sussex.
    3. Johann Fuchs, 2014. "Der Einfluss von Hartz IV auf die westdeutsche Stille Reserve – Ergebnisse auf Basis unterschiedlicher methodischer Ansätze," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 8(1), pages 33-48, June.
    4. Böhm, Kathrin, 2011. "Schätzung der Stillen Reserve mit dem Mikrozensuspanel 2001-2004 : eine Machbarkeitsstudie," IAB-Forschungsbericht 201102, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Ewa Gałecka-Burdziak, 2016. "Underestimated or overestimated: matching function elasticities biased due to worker inflows and outflows," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 47.

    More about this item

    Keywords

    panel data; discouraged worker effect; added worker effect;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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