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Does the Added Worker Effect Matter?

Author

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  • Guner, Nezih

    (CEMFI)

  • Kulikova, Yuliya

    (Banco de España)

  • Valladares-Esteban, Arnau

    (University of St. Gallen)

Abstract

The added worker effect (AWE) measures the entry of individuals into the labor force due to their partners' job loss. We propose a new method to calculate the AWE, which allows us to estimate its effect on any labor market outcome. We show that the AWE reduces the fraction of households with two non-employed members. The AWE also accounts for why women's employment is less cyclical and more symmetric compared to men. In recessions, while some women lose their employment, others enter the labor market and find jobs. This keeps the female employment relatively stable.

Suggested Citation

  • Guner, Nezih & Kulikova, Yuliya & Valladares-Esteban, Arnau, 2020. "Does the Added Worker Effect Matter?," IZA Discussion Papers 12923, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12923
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    Cited by:

    1. Coskun, Sena & Dalgic, Husnu C., 2024. "The emergence of procyclical fertility: The role of breadwinner women," Journal of Monetary Economics, Elsevier, vol. 142(C).
    2. María del Pilar Toyos, 2022. "Cierre de escuelas en pandemia y brechas de género en Argentina: ¿madres más vulnerables?," Asociación Argentina de Economía Política: Working Papers 4603, Asociación Argentina de Economía Política.
    3. Titan Alon & Matthias Doepke & Jane Olmstead-Rumsey, 2020. "This Time It's Different: The Role of Women's Employment in a Pandemic Recession," Working Papers 2020-057, Human Capital and Economic Opportunity Working Group.
    4. Madeira, Carlos & Salazar, Leonardo, 2023. "The impact of monetary policy on a labor market with heterogeneous workers: The case of Chile," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 4(2).
    5. Stefania Albanesi & Maria Jose Prados, 2022. "Slowing Women’s Labor Force Participation: The Role of Income Inequality," Working Papers 2022-037, Human Capital and Economic Opportunity Working Group.
    6. Luis Guirola & María Sánchez-Domínguez, 2022. "Childcare constraints on immigrant integration," Working Papers 2216, Banco de España.
    7. Connolly, Laura E. & Jolly, Nicholas A., 2024. "Temporal Changes to the Added Worker Effect Associated with Spousal Job Loss," GLO Discussion Paper Series 1454, Global Labor Organization (GLO).

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    More about this item

    Keywords

    household labor supply; intra-household insurance; female employment; cyclicality; skewness;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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