Labour Supply as a Buffer: Evidence from UK Households

Andrew Benito () and Jumana Saleheen
Additional contact information
Andrew Benito: University of Warwick

No 6506, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines labour supply adjustment – both hours worked and participation decisions. We focus on the response of each to financial shocks, employing data from the BHPS. Estimated responses are broadly consistent with models of self-insurance that incorporate labour supply flexibility. The shock reflects several factors including financial wealth and a partner's employment situation. The response is significantly larger for those who change job, consistent with the importance of hours constraints within jobs. The propensity to participate in the labour market also appears to respond to the financial shock but that is somewhat less robust than the hours response.

Keywords: self-insurance; labour supply (search for similar items in EconPapers)
JEL-codes: J22 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2012-04
New Economics Papers: this item is included in nep-ias, nep-lab and nep-lma
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Published - published in: Economica, 2013, 80 (130), 698-720

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Related works:
Journal Article: Labour Supply as a Buffer: Evidence from UK Households (2013)
Working Paper: Labour supply as a buffer: evidence from UK households (2011)
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