Abstract
Abstract The trend of increasing female employment and decreasing male employment has raised questions about its effects on income distribution both across and within households. The decline in the participation of husbands in the labor market can have two different effects on wives’ labor supply: an ‘added worker effect’ that increases wives’ labor supply in order to maintain the same level of income and the same household living standard; and a ‘discouraged worker effect’ which reduces wives’ labor supply since women believe that it is more difficult to find work when their husband cannot find a job. At the macroeconomic level, the increased participation of women in the labor market seems to be a response to the decline in male employment and wages.
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