Employment Constraints and the Labor Supply of Married Women: A Reexamination of the Added Worker Effect

Abstract

Little evidence is found to support the conventional notion of the added worker effect. The husband's unemployment has no measurable impact on the wife's actual hours of work. However, the constraint on his ability to supply hours of work to the labor market, and not simply his unemployment, influences his wife's labor supply. Furthermore, the observed hours of work of the wife may not accurately reflect her desired hours of work. With these considerations the wife's labor supply is found to be positively associated with the unemployment and underemployment of her husband, and this added worker effect is estimated to be quite substantial.

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