The added-worker effect in the Netherlands before and during the Great Recession

Abstract

We study the added-worker effect in the Netherlands with large-scale administrative panel data for the period 1999–2015. Conditioning on samples with similar employment histories, we employ differences-in-differences to estimate the effect of a male partner’s unemployment shock on the female partner’s income. We find a modest added-worker effect of 2–5% of the male partner’s income loss, as compared to the much larger compensating effect from social insurance schemes. The added-worker effect largely disappeared at the beginning of the Great Recession, but resurfaced a few years later. Over the years, profits from self-employment have become more important in dealing with unemployment shocks.

His unemployment, her response, and the moderating role of welfare policies in European countries

“…Gender norms can explain these varying results, leading to a more traditional division of labour in couples where men have higher income potentials. Lastly, although it might be expected that women with non-western migration background are less likely to increase their labour supply, no consistent evidence for such a pattern was found in previous studies [ 17 , 50 ].…”

“…It is less clear how household characteristics, particularly the presence of children, affect women’s labour market response after the partner becomes unemployed. In general, an increase in women’s labour market participation after their partner becomes unemployed is negatively associated with the number of children [ 15 , 42 , 50 ] and it is particularly low in households with very young children [ 19 , 47 , 51 ]. This is likely because women with young children face time constraints that prevent them from increasing their labour market supply.…”

Gender and beyond. Employment patterns during the Covid-19 pandemic in Italy.

“…Consequently, the deteriorating employment prospects of one partner could lead to the increase or activation of labor market participation, adding a new influx of people into the labor force. While some authors report evidence for a small or no AWE in developed countries (e.g., Lundberg, 1985;Cammeraat, Jongen & Koning, 2022), others find a sizable increase in women's labor supply as a response to their partners' job displacement (e.g., Starr, 2014;Ghignoni & Verashchagina, 2016;Baldini, Torricelli & Brancati 2018;Stephens, 2002). A relevant question is whether these effects are present over the recession triggered by the pandemic.…”

Consumption and time use responses to unemployment: Implications for the lifecycle model

“…11 Prior studies have investigated the roles of UI benefits (Gruber 1997), spousal labour supply (Stephens 2002; Hardoy 2014; Cammeraat et al . 2019) and private savings (Gallen 2013; Michelacci and Ruffo 2015; Basten et al . 2016) in smoothing consumption around unemployment.…”

“…Prior studies have investigated the roles of UI benefits(Gruber 1997), spousal labour supply(Stephens 2002;Hardoy 2014;Cammeraat et al 2019) and private savings(Gallen 2013;Michelacci and Ruffo 2015;Basten et al 2016) in smoothing consumption around unemployment.2 Aguiar and Hurst (2005),Ahn et al (2008) andBurda and Hamermesh (2010) use both expenditure and time use data. However, the data are cross-sectional, allowing us only to draw correlations based on comparing employed and unemployed individuals at a particular point in time.3 For instance, seeDynarski and Sheffrin (1987),Gruber (1997),Stephens (2004),Aguiar and Hurst (2005),Krueger and Mueller (2012),Aguiar et al (2013),Michelacci and Ruffo (2015),Kroft and Notowidigdo (2016), and Hendren (2017).4 For instance, seeBrowning and Crossley (2001, 2009.5 In only a few sectors, collective agreements require employers to complement UI benefits to a 100% replacement rate.6 As occupational pensions make up about 35% of the retirement income of the median household(Knoef et al 2016), unemployment can have substantial consequences for pension savings.7 We test for symmetry by rewriting equation (1) in first differences and substituting the unemployment dummy for two dummies indicating job loss and job find, respectively.…”