What Limits Intra-Household Insurance or the “Added Worker Effect”?

Hevenstone, Debra; Kessler, Dorian; Luchsinger, Larissa (2023). What Limits Intra-Household Insurance or the “Added Worker Effect”? Socio-Economic Review, 21(4), pp. 2191-2231. Oxford University Press 10.1093/ser/mwad025

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The “Added Worker Effect” (AWE) theory posits that partners of the unemployed provide intrahousehold insurance by increasing their earnings. However, estimates of the AWE are small. Popular explanations include lacking need (e.g., due to generous unemployment benefits), capacity, or willingness to increase earnings, though these explanations are seldomly tested systematically. Using Swiss administrative data and difference-in-differences estimates we find an overall AWE among only non-working women. We find no systematic differences in AWEs between couples with differing need or capacity, but aspects related to willingness like marriage, long marital duration, and shared biological children are associated with higher AWEs. Men’s overall slight reduction in earnings upon their partners’ unemployment are driven by young, childless, cohabiting men. Overall, compared to unemployment insurance, in all studied subgroups, the AWE is a minimal source of insurance.

Item Type:	Journal Article (Original Article)
Division/Institute:	School of Social Work > Institute for Social Security and Social Policy School of Social Work
Name:	Hevenstone, Debra; Kessler, Dorian and Luchsinger, Larissa
Subjects:	H Social Sciences > HA Statistics H Social Sciences > HM Sociology
ISSN:	1475-1461
Publisher:	Oxford University Press
Funders:	[UNSPECIFIED] Swiss National Science Foundation
Language:	English
Submitter:	Debra Hevenstone
Date Deposited:	05 May 2023 11:37
Last Modified:	15 Oct 2023 01:37
Publisher DOI:	10.1093/ser/mwad025
Additional Information:	This article has been accepted for publication in Socio-Economic Review Published by Oxford University Press.
Uncontrolled Keywords:	Labor Markets, Unemployment, Family, Household, Work, Europe
ARBOR DOI:	10.24451/arbor.19171
URI:	https://arbor.bfh.ch/id/eprint/19171