Family Job Search and Wealth: The Added Worker Effect Revisited

J. Ignacio Garcia-Perez and Silvio Rendon
Authors registered in the RePEc Author Service: J. Ignacio García Pérez ()

No 20-17, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We propose and estimate a model of family job search and wealth accumulation with data from the Survey of Income and Program Participation (SIPP). This dataset reveals a very asymmetric labor market for household members who share that their job finding is stimulated by their partners' job separation. We uncover a job search-theoretic basis for this added worker effect, which occurs mainly during economic downturns, but also by increased non-employment transfers. Thus, our analysis shows that the policy goal of in-creasing non-employment transfers to support a worker's job search is partially offset by the spouse's cross effect of decreased non-employment and wages. The added worker effect is robust to having more children and more education in the household and does not just result as a composition of heterogeneous individuals. We also show that the interdependency between household members is understated if wealth and savings are not considered. Finally, we show that gender equality in the labor market not only improves women's labor market performance, but it also increases men's accepted wages and non-employment rates.

Keywords: nonemployment; asset accumulation; estimation of dynamic structural models.; household economics; job search; consumption (search for similar items in EconPapers)
JEL-codes: C33 E21 E24 J64 (search for similar items in EconPapers)
Pages: 45
Date: 2020-04-30
New Economics Papers: this item is included in nep-dge, nep-gen, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Family job search and wealth: The added worker effect revisited (2020)
Working Paper: Family Job Search and Wealth: The Added Worker Effect Revisited (2018)
Working Paper: Family Job Search and Wealth: The Added Worker Effect Revisited (2016)
Working Paper: Family Job Search and Wealth: The Added Worker Effect Revisited (2016)
Working Paper: Family Job Search and Wealth: The Added Worker Effect Revisited (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:87879

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DOI: 10.21799/frbp.wp.2020.17

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