Is There Still an Added Worker Effect?
NBER Retirement Research Center Paper No. NB 07-14
Issued in August 2007
Using matched March CPS files we examine labor market transitions of husbands and wives. We find that the “added worker effect”—the greater propensity of non-participating wives to enter the labor force when their husbands exit employment—is still important among a subset of couples but the overall value of marriage as a risksharing arrangement has diminished due to the greater positive co-movement of employment within couples. While we find that positive assortative matching on education did increase over time, we find that this shift in composition of couple types alone explains little of the increased positive correlation.
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