Husband's Unemployment and Wife's Labor Supply – The Added Worker Effect Across Europe

49 Pages Posted: 24 Aug 2014

See all articles by Julia Bredtmann

Julia Bredtmann

RWI – Leibniz Institute for Economic Research; IZA; University College London - CReAM - Centre for Research and Analysis of Migration

Sebastian Otten

University College London - CReAM - Centre for Research and Analysis of Migration; Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Christian Rulff

Ruhr University Bochum

Multiple version iconThere are 2 versions of this paper

Date Written: May 25, 2014

Abstract

This paper investigates the responsiveness of women’s labor supply to their husband’s loss of employment – the so-called added worker effect. While previous empirical literature on this topic mainly concentrates on a single country, we take an explicit internationally comparative perspective and analyze whether the added worker effect varies across the European countries. In doing so, we use longitudinal data from the European Union Statistics on Income and Living Conditions (EU-SILC) covering the period 2004 to 2011. For our pooled sample of 28 European countries, we find evidence for the existence of an added worker effect, both at the extensive and at the intensive margin of labor supply. Women whose husbands become unemployed have a higher probability of entering the labor market and changing from part-time to full-time employment than women whose husbands remain employed. However, our results further reveal that the added worker effect varies over both the business cycle and the different welfare regimes within Europe.

Keywords: added worker effect; labor supply; unemployment; cross-country analysis

JEL Classification: J22, J64, J82

Suggested Citation

Bredtmann, Julia and Otten, Sebastian and Rulff, Christian, Husband's Unemployment and Wife's Labor Supply – The Added Worker Effect Across Europe (May 25, 2014). Ruhr Economic Paper No. 484, Available at SSRN: https://ssrn.com/abstract=2471547 or http://dx.doi.org/10.2139/ssrn.2471547

Julia Bredtmann (Contact Author)

RWI – Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

IZA

University College London - CReAM - Centre for Research and Analysis of Migration

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

Sebastian Otten

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, DE 45128
Germany

Christian Rulff

Ruhr University Bochum ( email )

Department of Economics
Universitätsstraße 150
Bochum, 44801
Germany

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