Job Displacement, Family Dynamics, and Spousal Labor Supply

Martin Halla*, Julia Schmieder, Andrea Weber

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    Abstract (may include machine translation)

    We study the effectiveness of intrahousehold insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and earnings losses, while wives’ labor supply increases moderately due to extensive margin responses. Wives’ earnings gains recover only a tiny fraction of the household income loss, and in the short-term, public transfers and taxes are a more important form of insurance. We show that the presence of children in the household is a crucial determinant of the wives’ labor supply response.

    Original languageEnglish
    Pages (from-to)253-287
    Number of pages35
    JournalAmerican Economic Journal: Applied Economics
    Volume12
    Issue number4
    DOIs
    StatePublished - Oct 2020

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