Temporal changes to the added worker effect associated with spousal job loss

Document Type

Article

Publication Date

8-21-2025

Department

College of Business

Abstract

This paper utilizes the 1968–2019 survey waves of the Panel Study of Income Dynamics to analyze the added worker effect for wives of husbands who lose their job through no fault of their own. Specifically, we focus on the potential changes to the added worker effect over time. Our results show that the added worker effect peaked in the 1980s and has declined over time. Further, heterogeneity exists across age groups. The added worker effect is largest for women who are relatively older at the time of their husbands’ job loss, ages 40+. As the magnitude of the added worker effect declined from the 1970s to the 2000s, the long-run impact of job loss on family income has increased over time. Finally, displaced husbands are increasingly more likely to be employed part-time following their own displacement across both decades and the wife’s age at time of displacement.

Publication Title

Review of Economics of the Household

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