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Your Spouse Is Fired! How Much Do You Care?

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  • Nikolova, Milena

    (University of Groningen)

  • Ayhan, Sinem H.

    (Institute for East and Southeast European Studies, Regensburg)

Abstract

This study is the first to provide a causal estimate of the subjective well-being effects of spousal unemployment at the couple level. Using German panel data on married and cohabiting partners for 1991-2013 and information on exogenous job termination induced by workplace closure, we show that spousal unemployment reduces the life satisfaction of indirectly-affected spouses. The impact is equally pronounced among female and male partners. Importantly, the results are not driven by an income effect, but likely reflect the psychological costs of unemployment. Our findings are robust to a battery of sensitivity checks and imply that public policy programs aimed at mitigating the negative consequences of unemployment need to consider within-couple spillovers.

Suggested Citation

  • Nikolova, Milena & Ayhan, Sinem H., 2016. "Your Spouse Is Fired! How Much Do You Care?," IZA Discussion Papers 10411, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10411
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    More about this item

    Keywords

    plant closure; involuntary job loss; unemployment; spouses; well-being;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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