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Health Shocks, the Added Worker Effect, and Labor Supply in Married Couples: Evidence from South Korea

Author

Listed:
  • Kyeongkuk Kim

    (University of Hawaii at Manoa Ministry of Strategy and Finance, Republic of Korea)

  • Sang-Hyop Lee

    (University of Hawaii at Manoa)

  • Timothy J Halliday

    (University of Hawaii at Manoa and IZA)

Abstract

We investigate the effects of health shocks on labor supply among Korean married couples. Consistent with previous work, we find that own health shocks have substantial effects on own labor supply at the extensive margin. We also find evidence that spousal health shocks affect own labor supply, particularly, for wives. Specifically, we find that the onset of chronic illness for the husband reduces the probability of the wife exiting the labor force by 9.2 percentage points. This is the added worker effect (AWE). We find larger effects of spousal health shocks for chronic conditions than for acute conditions and accidents possibly because chronic conditions are associated with a smaller need for home care than acute conditions. Finally, we find stronger evidence of the AWE for households with co-residing adult children and for poorer household.

Suggested Citation

  • Kyeongkuk Kim & Sang-Hyop Lee & Timothy J Halliday, 2018. "Health Shocks, the Added Worker Effect, and Labor Supply in Married Couples: Evidence from South Korea," Working Papers 201812, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:201812
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_18-12.pdf
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    References listed on IDEAS

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    Cited by:

    1. Nicholas A. Jolly & Nikolaos Theodoropoulos, 2023. "Health shocks and spousal labor supply: an international perspective," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(2), pages 973-1004, April.
    2. Bertogg, Ariane & Nazio, Tiziana & Strauss, Susanne, 2021. "Work–family balance in the second half of life: Caregivers' decisions regarding retirement and working time reduction in Europe," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 55(3), pages 485-500.
    3. Jolly, Nicholas A. & Wagner, Kathryn L., 2023. "Work-limiting disabilities and earnings volatility," Labour Economics, Elsevier, vol. 81(C).

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    More about this item

    Keywords

    health; labor supply; couples;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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