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Does Unemployment Insurance Crowd out Spousal Labor Supply?
Abstract
Previous research on unemployment insurance (UI) has emphasized the program's effect on individual search behavior. This state‐contingent income may also reduce the labor supply of family members during the unemployment spell. We investigate this question within the context of wives' labor supply responses to their husbands' unemployment spells. We find strong “crowdout” of this form of family self‐insurance; our estimates imply that for each dollar of UI receipt wives earn up to 73 cents less. The reduction in spousal hours of work is over 40% as large as previous estimates of the effect of UI on search time of husbands.
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Cites
Sample Selection Bias as a Specification Error
Heckman, J. J. (1979) · Econometrica · doi:10.2307/1912352 · Cited by 28,779
Cited by
The Cyclical Behavior of Equilibrium Unemployment and Vacancies Revisited
Hagedorn, M., & Manovskii, I. (2008) · American Economic Review · doi:10.1257/aer.98.4.1692 · Cited by 1,046
Moral Hazard versus Liquidity and Optimal Unemployment Insurance
Chetty, R. (2008) · Journal of Political Economy · doi:10.1086/588585 · Cited by 853
Job Displacement, Disability, and Divorce
Charles, K. K., & Stephens, Jr. (2004) · Journal of Labor Economics · doi:10.1086/381258 · Cited by 444
A general formula for the optimal level of social insurance
Chetty, R. (2006) · Journal of Public Economics · doi:10.1016/j.jpubeco.2006.01.004 · Cited by 361
Worker Displacement and the Added Worker Effect
Stephens, Jr. (2002) · Journal of Labor Economics · doi:10.1086/339615 · Cited by 357
Metadata
- Authors
- Cullen, J. B., & Gruber, J.
- Venue
- Journal of Labor Economics
- Publisher
- University of Chicago Press
- Published
- 2000-07
- Volume
- 18
- Issue
- 3
- Pages
- 546-572
- ISSN
- 0734-306X (ISSN-L)
- 1537-5307
- OpenAlex
- W2024622581
- Cited by
- 399
- References
- 1
- FWCI
- 20.76
- Type
- journal article
- Language
- en
- Open access
- closed
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