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How does the Household Labour Supply Respond to the Unemployment of the Household Head?
Author(s) -
CardonaSosa Lina,
Flórez Luz Adriana,
Morales Leonardo Fabio
Publication year - 2018
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/labr.12138
Subject(s) - unemployment , economics , labour economics , spell , shock (circulatory) , labour supply , demographic economics , economic growth , medicine , sociology , anthropology
In this paper, we explore one of the oldest labour market phenomena documented in the literature: the added worker effect. This refers to the labour supply response of secondary earners of the household to the main earner's job losses. Using longitudinal data for Colombia, we find that when the head of the household becomes unemployed, the labour supply of the female partner increases between 9 and 20 percentage points. Such response appears during the first 6 months of the unemployment spell of the household head. In addition, within 1 year of the unemployment shock, household members under college age were more likely to enter the labour market and less likely to be in tertiary education.