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Job Displacement, Family Dynamics and Spousal Labor Supply

Author

Listed:
  • Martin Halla
  • Julia Schmieder
  • Andrea Weber

Abstract

We study the effectiveness of intra-household insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and earnings losses, while wives’ labor supply increases moderately due to extensive margin responses. Wives’ earnings gains recover only a tiny fraction of the household income loss and, in the short-term, public transfers and taxes are a more important form of insurance. We show that the presence of children in the household is a crucial determinant of the wives’ labor supply response.

Suggested Citation

  • Martin Halla & Julia Schmieder & Andrea Weber, 2018. "Job Displacement, Family Dynamics and Spousal Labor Supply," Economics working papers 2018-16, Department of Economics, Johannes Kepler University Linz, Austria.
  • Handle: RePEc:jku:econwp:2018_16
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    More about this item

    Keywords

    Firm Events; Household Labor Supply; Intra-household Insurance; Added Worker Effect.;
    All these keywords.

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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