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Intra-Household Coping Mechanisms in Hard Times: the Added Worker Effect in the 2001 Argentine Economic Crisis

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  • Laurine Martinoty

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper shows that the added worker effect (AWE) plays an important role in coping against aggregate shocks, even in cases where the discouragement effect prevails at a macroeconomic scale. Using an Argentine panel dataset between 2000-2002, we instrument the endogenous variation in the labor market outcomes of household heads using the collapse of the Convertibility era as a natural experiment, and measure its causal impact on their spouses' labor supply decisions. Within this framework, we show that a woman whose husband experiences the average decline in income is 4.4 percentage points more likely to enter the labor market. Out of four new entrants, three work at least one hour weekly, and one even finds a full time job. Heterogeneous effects are in line with expectations, robustness checks support the validity of our empirical strategy, and our results are robust to various sensitivity tests.
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Suggested Citation

  • Laurine Martinoty, 2014. "Intra-Household Coping Mechanisms in Hard Times: the Added Worker Effect in the 2001 Argentine Economic Crisis," Post-Print halshs-01076566, HAL.
    • Handle: RePEc:hal:journl:halshs-01076566
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    Cited by:

    1. 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).
    2. Robson Mandishekwa & Enard Mutenheri, 2021. "The economic activities among mining-induced displacees in Arda Transau, Zimbabwe," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 34(1), pages 51-70, April.
    3. Joaquín Serrano & Leonardo Gasparini & Mariana Marchionni & Pablo Glüzmann, 2019. "Economic cycle and deceleration of female labor force participation in Latin America," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 53(1), pages 1-21, December.
    4. Lina Cardona‐Sosa & Luz Adriana Flórez & Leonardo Fabio Morales & Banco de la República, 2018. "How does the Household Labour Supply Respond to the Unemployment of the Household Head?," LABOUR, CEIS, vol. 32(4), pages 174-212, December.
    5. Lina Cardona-Sosa & Luz Adriana Flórez & Leonardo Morales Zurita, 2016. "Intra-household labour supply after an unemployment event: The added worker effect," Borradores de Economia 944, Banco de la Republica de Colombia.
    6. Echeverría, Lucía & Menon, Martina & Perali, Federico & Berges, Miriam, 2019. "Intra-household inequality and child welfare in Argentina," Nülan. Deposited Documents 3051, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    7. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.
    8. Aleksandra Riedl & Florian Schoiswohl, 2015. "Is there an added worker effect? – European labor supply during the crisis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 71-88.
    9. Berniell, Inés & Gasparini, Leonardo & Marchionni, Mariana & Viollaz, Mariana, 2023. "Lucky women in unlucky cohorts," Journal of Development Economics, Elsevier, vol. 161(C).

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    More about this item

    Keywords

    panel data; natural experiment; instrumental variable; female labor supply; added worker effect; intra household allocation; coping strategy;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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