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Evidence of Added Worker Effect from the 2008 Economic Crisis

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  • Ayhan, Sinem H.

    (Maastricht Graduate School of Governance)

Abstract

This paper contributes to the research on interdependencies in spousal labor supply by analyzing labor supply response of married women to their husbands' job losses ("added worker effect"). It empirically tests the hypothesis of added worker effect relying on a case study on Turkey during the global economic crisis of 2008. Identification is achieved by exploiting the exogenous variation in the output of male-dominated sectors that were hit hard by the crisis and the high degree of gender segmentation that characterizes the Turkish labor market. Findings based on the instrumental variable approach suggest that the probability of entering the labor force for a woman increases by up to 29% in response to her husband's unemployment. However the effect is not contemporaneous; it appears with a quarter of lag and remains existent only for two quarters.

Suggested Citation

  • Ayhan, Sinem H., 2015. "Evidence of Added Worker Effect from the 2008 Economic Crisis," IZA Discussion Papers 8937, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8937
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    References listed on IDEAS

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    10. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    11. Jill Rubery & Anthony Rafferty, 2013. "Women and recession revisited," Work, Employment & Society, British Sociological Association, vol. 27(3), pages 414-432, June.
    12. Okten, Cagla, 2012. "Labor Force Participation of Married Women in Turkey: Is There an Added or a Discouraged Worker Effect?," IZA Discussion Papers 6616, Institute of Labor Economics (IZA).
    13. Miki Kohara, 2010. "The response of Japanese wives’ labor supply to husbands’ job loss," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1133-1149, September.
    14. Bredtmann, Julia & Otten, Sebastian & Rulff, Christian, 2014. "Husband's Unemployment and Wife's Labor Supply – The Added Worker Effect across Europe," Ruhr Economic Papers 484, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Cited by:

    1. Ayse Abbasoglu Ozgoren & A. Banu Ergöçmen & Aysıt Tansel, 2018. "Birth and employment transitions of women in Turkey: The emergence of role incompatibility," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 39(46), pages 1241-1290.
    2. Abbasoğlu Özgören, Ayşe & Ergöçmen, Banu & Tansel, Aysit, 2017. "Birth and Employment Transitions of Women in Turkey: Conflicting or Compatible Roles?," GLO Discussion Paper Series 161, Global Labor Organization (GLO).
    3. Giannakopoulos, Nicholas, 2015. "The added worker effect of married women in Greece during the Great Depression," MPRA Paper 66298, University Library of Munich, Germany.
    4. 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).
    5. Bellou, Andriana & Cardia, Emanuela, 2020. "The Great Depression and the rise of female employment: A new hypothesis," CLEF Working Paper Series 22, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    6. Adalgiso Amendola & Roberto Dell’Anno & Lavinia Parisi, 2020. "How did the Great Recession Affect Gender Disparity in Europe? An Analysis by a Multidimensional Deprivation Approach," Applied Economics, Taylor & Francis Journals, vol. 52(26), pages 2780-2794, May.
    7. Mercè Sala-Rios & Teresa Torres-Solé & Mariona Farré-Perdiguer, 2018. "Immigrants’ employment and the business cycle in Spain: taking account of gender and origin," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 463-490, August.
    8. Bellou, Andriana & Cardia, Emanuela, 2018. "Great Depression and the Rise of Female Employment: A New Hypothesis," IZA Discussion Papers 12024, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    global economic crisis; discouraged worker effect; added worker effect; spousal labor supply;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • D10 - Microeconomics - - Household Behavior - - - General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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