Is There Still an Added-Worker Effect?

42 Pages Posted: 16 Dec 2007

See all articles by Chinhui Juhn

Chinhui Juhn

University of Houston - Department of Economics; IZA Institute of Labor Economics

Simon Potter

Federal Reserve Bank of New York

Date Written: December 2007

Abstract

Using matched March Current Population Surveys, we examine labor market transitions of husbands and wives. We find that the "added-worker effect" - the greater propensity of nonparticipating wives to enter the labor force when their husbands exit employment - is still important among a subset of couples, but that the overall value of marriage as a risk-sharing arrangement has diminished because of the greater positive co-movement of employment within couples. While positive assortative matching on education did increase over time, this shift in the composition of couple types alone cannot account for the increased positive correlation.

Keywords: labor, married, Bayesian, participation

JEL Classification: J0, E2, C1

Suggested Citation

Juhn, Chinhui and Potter, Simon, Is There Still an Added-Worker Effect? (December 2007). FRB of New York Staff Report No. 310. Available at SSRN: https://ssrn.com/abstract=1072022 or http://dx.doi.org/10.2139/ssrn.1072022

Chinhui Juhn

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States
713-743-3823 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Simon Potter (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-6309 (Phone)
212-720-1844 (Fax)

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