Does the Added Worker Effect Matter?

33 Pages Posted: 29 Jan 2020

See all articles by Nezih Guner

Nezih Guner

Centre for Monetary and Financial Studies (CEMFI)

Yuliy Kulikova

Autonomous University of Barcelona

Arnau Valladares-Esteban

University of St. Gallen

Multiple version iconThere are 3 versions of this paper

Date Written: January 2020

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 without 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 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.

Keywords: Cyclicality, female employment, Household Labor Supply, Intra-household Insurance, Skewness

JEL Classification: D1, E32, J21, J22

Suggested Citation

Guner, Nezih and Kulikova, Yuliy and Valladares-Esteban, Arnau, Does the Added Worker Effect Matter? (January 2020). CEPR Discussion Paper No. DP14346, Available at SSRN: https://ssrn.com/abstract=3526072

Nezih Guner (Contact Author)

Centre for Monetary and Financial Studies (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain

Yuliy Kulikova

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

Arnau Valladares-Esteban

University of St. Gallen ( email )

Varnbülstrasse 14
SEW-HSG
St.Gallen, 9000
Switzerland

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