Download This PaperThe Rise of the Added Worker Effect
22 Pages Posted: 21 Jun 2016
Date Written: 2016
Abstract
We document that the added worker effect (AWE) has increased over the last three decades. We develop a search model with two earner households and we illustrate that the increase in the AWE from the 1980s to the 2000s can be explained through i) the narrowing of the gender pay gap, ii) changes in the frictions in the labor market and iii) changes in the labor force participation costs of married women.
Keywords: Heterogeneous Agents, Family Self Insurance, Dual Earner, Unemployment, Labor Market Search
JEL Classification: E24, J12, J64
Suggested Citation: Suggested Citation
Mankart, Jochen and Oikonomou, Rigas, The Rise of the Added Worker Effect (2016). Bundesbank Discussion Paper No. 10/2016, Available at SSRN: https://ssrn.com/abstract=2797080 or http://dx.doi.org/10.2139/ssrn.2797080
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