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<p>The relationship between a job loss and a partner’s labour supply—often called the added worker effect—is a well-studied phenomenon. However, people might already adjust their labour supply when their partner is at risk of losing his/her job. Using Labour Force Survey (LFS) microdata, we examine this relationship for 16 European countries over the period 2005–2020. When a couple member is at risk of losing his/her job, the partner is observed to be 2.4&#xa0;percentage points more likely to enter the labour market (extensive margin) and 2.3&#xa0;percentage points more likely to (want to) increase working hours (intensive margin). These patterns are almost as pronounced as those seen following an actual job loss for the intensive margin, and a bit more than half of those for the extensive margin. The fear of job loss appears to be an important additional factor associated with changes in couples’ labour supply. This is particularly noticeable in periods of crisis, when labour supply adjustments following a fear of job loss and an actual job loss are similarly strong. Heterogeneity analysis indicates that different couples adjust their labour supply at different moments, with low-educated people adjusting their behaviour when fearing job loss, while the high-educated tend to wait for this risk to materialize.</p>

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Labour supply of couples facing a risk of job loss

  • 期刊论文

  • 发表日期：

    2026年1月22日

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  • Wouter Gelade,
  • Maud Nautet,
  • Céline Piton

摘要

The relationship between a job loss and a partner’s labour supply—often called the added worker effect—is a well-studied phenomenon. However, people might already adjust their labour supply when their partner is at risk of losing his/her job. Using Labour Force Survey (LFS) microdata, we examine this relationship for 16 European countries over the period 2005–2020. When a couple member is at risk of losing his/her job, the partner is observed to be 2.4 percentage points more likely to enter the labour market (extensive margin) and 2.3 percentage points more likely to (want to) increase working hours (intensive margin). These patterns are almost as pronounced as those seen following an actual job loss for the intensive margin, and a bit more than half of those for the extensive margin. The fear of job loss appears to be an important additional factor associated with changes in couples’ labour supply. This is particularly noticeable in periods of crisis, when labour supply adjustments following a fear of job loss and an actual job loss are similarly strong. Heterogeneity analysis indicates that different couples adjust their labour supply at different moments, with low-educated people adjusting their behaviour when fearing job loss, while the high-educated tend to wait for this risk to materialize.