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Family ties: Labor supply responses to cope with a household employment shock

Author

Listed:
  • Massimo Baldini

    (University of Modena and Reggio Emilia
    CAPP (Centro Analisi Politiche Pubbliche))

  • Costanza Torricelli

    (University of Modena and Reggio Emilia
    CEFIN (Centro Studi di Banca e Finanza)
    CeRP (Collegio Carlo Alberto))

  • Maria Cesira Urzì Brancati

    (CeRP (Collegio Carlo Alberto)
    International Longevity Centre)

Abstract

We use data from the European Union Statistics on Income and Living Conditions (EU-SILC) to explore labor responses of individuals (not only the spouse) to a negative employment shock suffered by another household member. We focus on Italy where family ties other than spousal ones are particularly strong and grown up children live in their parents’ household till late, especially when they are students. Two main results emerge. First, we find strong and robust evidence that households hit by an employment shock do respond by increasing labor supply. Second, we document an added worker effect that is affecting not only wives, but also teenage children and students independently of their age, with important policy implications in terms of human capital formation. Results are robust across gender, household financial conditions and the crisis, yet they do not point to differential reactions along these dimensions.

Suggested Citation

  • Massimo Baldini & Costanza Torricelli & Maria Cesira Urzì Brancati, 2018. "Family ties: Labor supply responses to cope with a household employment shock," Review of Economics of the Household, Springer, vol. 16(3), pages 809-832, September.
  • Handle: RePEc:kap:reveho:v:16:y:2018:i:3:d:10.1007_s11150-017-9375-z
    DOI: 10.1007/s11150-017-9375-z
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    2. Brini, Elisa & Scherer, Stefani & Vitali, Agnese, 2023. "Gender and beyond. Employment patterns during the Covid-19 pandemic in Italy," SocArXiv bkgfc, Center for Open Science.
    3. Jan Gromadzki, 2019. "The Added Worker Effect, Employment Contracts, and the Reasons for the Wife’s Inactivity," IBS Working Papers 02/2019, Instytut Badan Strukturalnych.
    4. Elisa Brini & Stefani Scherer & Agnese Vitali, 2024. "Gender and Beyond: Employment Patterns during the COVID-19 Pandemic in Italy," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 43(3), pages 1-23, June.
    5. Saisawat Samutpradit, 2024. "Surviving Loss: Coping Strategies among Widow Households in Thai Rural Areas," PIER Discussion Papers 213, Puey Ungphakorn Institute for Economic Research.
    6. Joaquin Alfredo-Angel Rubalcaba & José R. Bucheli & Camila Morales, 2024. "Immigration enforcement and labor supply: Hispanic youth in mixed-status families," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-38, June.

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