Spousal Labor Supply Response to Job Displacement and Implications for Optimal Transfers

Birinci, Serdar

doi:10.20955/wp.2019.020

“…In the labor literature, Lundberg (1985) introduced the notion of the "added worker effect," i.e., a worker joining the labor force in response to their spouse's job loss. More recent studies supporting the important role of within-family insurance include Attanasio, Low, and Sánchez-Marcos (2005), Blundell, Pistaferri, andSaporta-Eksten (2016, 2018), Birinci (2019), García-Pérez and Rendon (2020), Pruitt and Turner (2020), and Guner, Kulikova, and Valladares-Esteban (2020). Meanwhile Guler, Guvenen, and Violante (2012) and Pilossoph and Wee (2020) analyze the impact of withinfamily insurance on job searches.…”

Section: Introductionmentioning

confidence: 98%

This Time It's Different: The Role of Women's Employment in a Pandemic Recession

Alon

¹

,

Doepke²,

et al. 2020

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In recent US recessions, employment losses have been much larger for men than for women. Yet, in the current recession caused by the Covid-19 pandemic, the opposite is true: unemployment is higher among women. In this paper, we analyze the causes and consequences of this phenomenon. We argue that women have experienced sharp employment losses both because their employment is concentrated in heavily affected sectors such as restaurants, and due to increased childcare needs caused by school and daycare closures, preventing many women from working. We analyze the repercussions of this trend using a quantitative macroeconomic model featuring heterogeneity in gender, marital status, childcare needs, and human capital. Our quantitative analysis suggests that a pandemic recession will i) feature a strong transmission from employment to aggregate demand due to diminished within-household insurance; ii) result in a widening of the gender wage gap throughout the recovery; and iii) contribute to a weakening of the gender norms that currently produce a lopsided distribution of the division of labor in home work and childcare.

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“…Moreover, Davis and von Wachter (2011) and Birinci (2020) estimate the earnings drop upon job loss separately for recessions and expansions. Using administrative data from the U.S., Davis and von Wachter (2011) find larger earnings losses upon displacement in recessions (39 percent) than in expansions (25 percent).…”

Section: A5 Earnings Drop Upon Job Lossmentioning

confidence: 99%

Labor market policies during an epidemic

Birinci

¹

,

Karahan²,

Mercan

³

et al. 2021

Journal of Public Economics

Self Cite

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We study the positive and normative implications of labor market policies that counteract the economic fallout from containment measures during an epidemic. We incorporate a standard epidemiological model into an equilibrium search model of the labor market to compare unemployment insurance (UI) expansions and payroll subsidies. In isolation, payroll subsidies that preserve match capital and enable a swift economic recovery are preferred over a cost-equivalent UI expansion. When considered jointly, however, a cost-equivalent optimal mix allocates 20 percent of the budget to payroll subsidies and 80 percent to UI. The two policies are complementary, catering to different rungs of the productivity ladder. The small share of payroll subsidies is sufficient to preserve high-productivity jobs, but it leaves room for social assistance to workers who face inevitable job loss.

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“…Moreover, Davis and von Wachter (2011) and Birinci (2020) estimate the earnings drop upon job loss separately for recessions and expansions. Using administrative data from the U.S., Davis and von Wachter (2011) find larger earnings losses upon displacement in recessions (39 percent) than in expansions (25 percent).…”

Section: A5 Earnings Drop Upon Job Lossmentioning

confidence: 99%

Labor Market Policies During an Epidemic

Birinci

¹

,

Karahan

²

,

Mercan

³

et al. 2020

Self Cite

View full text Add to dashboard Cite

We study the positive and normative implications of labor market policies that counteract the economic fallout from containment measures during an epidemic. We incorporate a standard epidemiological model into an equilibrium search model of the labor market to compare unemployment insurance (UI) expansions and payroll subsidies. In isolation, payroll subsidies that preserve match capital and enable a swift economic recovery are preferred over a cost-equivalent UI expansion. When considered jointly, however, a cost-equivalent optimal mix allocates 20 percent of the budget to payroll subsidies and 80 percent to UI. The two policies are complementary, catering to different rungs of the productivity ladder. The small share of payroll subsidies is sufficient to preserve high-productivity jobs, but it leaves room for social assistance to workers who face inevitable job loss.

show abstract

Spousal Labor Supply Response to Job Displacement and Implications for Optimal Transfers

Cited by 18 publications

References 55 publications

This Time It's Different: The Role of Women's Employment in a Pandemic Recession

This Time It's Different: The Role of Women's Employment in a Pandemic Recession

Labor market policies during an epidemic

Labor Market Policies During an Epidemic

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