In Sickness and in Health: Job Displacement and Health Spillovers in Couples

We study how a negative labor market shock like job loss generates health spillovers in couples. Using administrative data of all workers and firms matched to mortality and patient records, we document that male job displacement increases the mortality risk for both the man and his partner. For every 10,000 displaced men, there are 27 additional deaths over a 5-year period rising to 115 additional deaths over two decades. Of those, 60% accrue to the displaced worker but 40% are due to excess spousal mortality. Deaths from cardiovascular diseases jump up and hospitalization records show more treatments for alcohol-related disorders and mental health issues. We also find a stunning gender asymmetry: while male job displacement generates large and persistent health effects, no such dire health consequences are observed after a woman loses her job. We explore three explanations for the observed health spillovers: risk sharing through spousal labor supply; earnings losses and the role of public insurance; and the influence of gender roles and family structure.

Existing research has shown that job displacement leads to large and persistent earnings losses for men, but evidence for women is scarce. Using administrative data from Germany, we apply an event study design in combination with propensity score matching and a reweighting technique to directly compare men and women who are displaced from similar jobs and firms. Our results show that after a mass layoff, women's earnings losses are about 35% higher than men's, with the gap persisting five years after job displacement. This is partly explained by a higher propensity of women to take up part-time or marginal employment following job loss, but even full-time wage losses are almost 50% (or 5 percentage points) higher for women than for men. We then show that on the household level there is no evidence of an added worker effect, independent of the gender of the job loser. Finally, we document that parenthood magnifies the gender gap sharply: while fathers of young children have smaller earnings losses than men in general, mothers of young children have much larger earnings losses than other women.

Existing research has shown that job displacement leads to large and persistent earnings losses for men, but evidence for women is scarce. Using administrative data from Germany, we apply an event study design in combination with propensity score matching and a reweighting technique to directly compare men and women who are displaced from similar jobs and firms. Our results show that after a mass layoff, women’s earnings losses are about 35% higher than men’s, with the gap persisting five years after job displacement. This is partly explained by a higher propensity of women to take up part-time or marginal employment following job loss, but even full-time wage losses are almost 50% (or 5 percentage points) higher for women than for men. We then show that on the household level there is no evidence of an added worker effect, independent of the gender of the job loser. Finally, we document that parenthood magnifies the gender gap sharply: while fathers of young children have smaller earnings losses than men in general, mothers of young children have much larger earnings losses than other women.

Existing research has shown that job displacement leads to large and persistent earnings losses for men, but evidence for women is scarce. Using administrative data from Germany, we apply an event study design in combination with propensity score matching and a reweighting technique to directly compare men and women who are displaced from similar jobs and firms. Our results show that after a mass layoff, women’s earnings losses are about 35% higher than men’s, with the gap persisting five years after job displacement. This is partly explained by a higher propensity of women to take up part-time or marginal employment following job loss, but even full-time wage losses are almost 50% (or 5 percentage points) higher for women than for men. We then show that on the household level there is no evidence of an added worker effect, independent of the gender of the job loser. Finally, we document that parenthood magnifies the gender gap sharply: while fathers of young children have smaller earnings losses than men in general, mothers of young children have much larger earnings losses than other women. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

We study the effectiveness of intrahousehold insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and earnings losses, while wives’ labor supply increases moderately due to extensive margin responses. Wives’ earnings gains recover only a tiny fraction of the household income loss, and in the short-term, public transfers and taxes are a more important form of insurance. We show that the presence of children in the household is a crucial determinant of the wives’ labor supply response. (JEL D13, J12, J16, J22, J31, J63)

Wir zeigen, dass Arbeiter in stabilen Beschaftigungsverhaltnissen, die wahrend der Massenentlassungen aufgrund der im Jahr 1982 vorherrschenden Rezession in Deutschland ihren Arbeitsplatz verlieren, anhaltende Gehaltsverluste in Hohe von 10-15% uber einen Zeitraum von 15 Jahren hinnehmen mussen. Diese Schatzungen werden anhand vergleichbarer Daten und einer ahnlichen Methode wie bei Studien fur die Vereinigten Staaten erzielt. Aufgrund der Vorteile der deutschen Daten konnen wir zeigen, dass wahrend in den ersten 10 Jahren der Ruckgang und Wiederanstieg der Arbeitszeit eine Rolle fur die Einkommensverluste spielen, langfristig der Lohnverlust den wichtigsten Erklarungsfaktor darstellt. Wir zeigen auch, dass selbst das groszugige deutsche System der Arbeitslosenversicherung lediglich einen kleinen Anteil des gesamten Einkommensverlustes ersetzen kann. Diese Ergebnisse deuten an, dass Arbeitsplatzverluste zu grosen und andauernden Ruckgangen fur das Einkommen fuhren, selbst in Arbeitsmarkten mit strengeren sozialen Sicherheitsnetzen und geringerer Einkommensungleichheit.

I document a small spousal earnings response to the job displacement of the family head. The response is even smaller in recessions, when earnings losses are larger and additional insurance is most valuable. I investigate whether the small response is an outcome of the crowding-out effects of government transfers. To accomplish this, I use an incomplete markets model with family labor supply and aggregate fluctuations where predicted spousal labor supply elasticities with respect to transfers are in line with microeconomic estimates both in aggregate and across subpopulations. Counterfactual experiments indeed reveal that generous transfers in recessions discourage the spousal labor supply significantly. I then show that the optimal policy features procyclical means-tested and countercyclical employment-tested transfers, unlike the existing policy that maintains generous transfers of both types in recessions. Abstracting from the incentive costs of transfers on the spousal labor supply changes both the level and cyclicality of optimal transfers.

We study interdependencies in spousal labor supply and the effectiveness of intrahousehold insurance in a sample of married couples, where the husband loses his job due to a mass layoff or plant closure using data from the Austrian Social Security Database. We show that in our sample of relatively young couples the shock hits households at crucial stages of family formation, which requires careful modeling of the wives' counterfactual lifecycle labor market patterns. In our empirical analysis, we propose three independent control groups of unaffected households to identify the causal effects of husbands' displacement on wives' labor supply. Our empirical results show that husbands suffer large and persistent employment and earnings losses over the first 5 years after displacement. But wives' labor supply increases only moderately and they respond predominantly at the extensive margin. The implied participation elasticity with respect to the husband's earnings shock is very small, about -0:04. While the wives' earnings gains recover only a tiny fraction of the household income loss, public transfers and taxes are a more important insurance at least in the short run. In terms of non-labor market related outcomes, we find a small positive effect on the probability of divorce, but no effect of the husband's job displacement on fertility. The presence and ages of children in the household are crucial determinants of the wife's labor supply response. The most responsive group are mothers, who are planning to return to the labor market after a maternity break, while mothers of very young children or wives without children remain unresponsive. We thus conclude that Austria's strong gender identity norms are an explanation for the limited scope of intra-household insurance.

Data and Code for 'Job Displacement, Family Dynamics and Spousal Labor Supply'

For married couples, spousal labor supply can act as a household insurance mechanism against one spouse’s earnings shock. This paper evaluates the insurance value of the Social Security Disability Insurance (SSDI) program among married households when wives face a time allocation problem between market hours and spousal care following their husbands’ disability. Using an event study approach, I find that while there is a sizable increase in wives’ working hours after their husbands’ job displacement, wives’ labor supply responses to their husbands’ disability are small, and instead, a considerable amount of time is spent in spousal care. I develop and estimate a dynamic structural model of married households and find that incorporating time loss due to spousal care increases the insurance value of SSDI relative to its costs. Furthermore, policy reforms such as supplementary caregiving benefits can improve social welfare.

The dynamics of health care delivery for children and adolescents have greatly evolved over the last 5 years. The growth of managed care has been especially rapid, and has coincided with other fundamental changes—declines in private coverage, growth of Medicaid, welfare reform, and the creation of the state Child Health Insurance Program (CHIP).1 Over the past 10 years, the number of children covered through employer-sponsored plans and other private plans has dropped.2 During this same period, changes to Medicaid have begun to de-couple eligibility from welfare eligibility, theoretically enabling states to expand coverage. For children, this movement from private to public coverage has accelerated the movement to managed care systems. Between 1991 and 1997, Medicaid enrollment in managed care plans increased from 9.5% to 47.8% of total Medicaid enrollment.3 Recent estimates suggest that over half of these Medicaid managed care enrollees are children.4 However, little is known about the impact of these trends on children's access to and use of services, let alone the quality and outcomes of that care. This report is the first in what is anticipated to be an annual series of reports on access to and use of health care services by America's children and youth. The report capitalizes on the existence of 2 national datasets, the Medical Expenditure Panel Survey (MEPS) and the Healthcare Cost and Utilization Project (HCUP), which have not been widely used by the child health services research community. As background to these new sources of data, we have provided a detailed description of the datasets, and review some of the fundamental tabulations. In future years, as more data are accumulated, these reports will focus on delineation of key trends and analyses addressing policy issues. ### MEPS The MEPS is conducted to provide nationally representative estimates of health care use, …

Artificial Intelligence (AI) is transforming labour markets through automation, job displacement, and the creation of new employment opportunities. This study employs a descriptive and comparative research design to analyze AI's impact across various industries, using statistical trend analysis, comparative sector evaluations, and qualitative NVivo-style interview analysis. Findings indicate that industries such as manufacturing and retail experience high job displacement rates (45% and 35%), whereas healthcare and Education show higher AI-driven job creation (50% and 60%). A major challenge identified is the AI skills gap, where 84% of interview respondents highlighted difficulties in workforce adaptation due to the lack of AI-related training programs. The trend analysis reveals a 55% increase in AI job creation between 2015-2025, but many workers remain unprepared for these new roles. Comparative industry analysis suggests that countries and sectors investing in reskilling initiatives and AI governance policies experience lower AI-induced unemployment rates. Beyond economic concerns, this study highlights AI's psychological and social implications in the workplace, such as job insecurity, workplace surveillance, and mental health challenges. To address these issues, governments and corporations must implement AI workforce reskilling programs, fair labour policies, and ethical AI deployment strategies. The research concludes that proactive AI governance and workforce adaptation strategies are essential for ensuring an inclusive and sustainable labour market transition.

Short-term labor market shocks, such as job displacements, can have persistent effects on workers’ earnings, employment and job stability, consumption, and access to health insurance. A long literature suggests these changes in workers’ socioeconomic conditions have potentially important effects on health outcomes, but existing studies associating job loss to health status face several problems of measurement and identification. This paper uses a large longitudinal administrative data set of quarterly earnings and employer records matched to information on individual mortality outcomes to estimate the long-term effect of a job loss during a mass layoff on mortality. We find that a job loss leads to a 15-20% increase in the probability of dying in the 20 years following a job loss. The initial and the long-run responses are particular pronounced. To examine the channels of the mass layoff effect, we exploit the panel nature of our data – covering over 15 years of earnings – to analyze the correlation of long-run career conditions, such as the average and the variance of earnings, with mortality, something not possible with typical data sets. A lasting decrease in earnings and a rise in earnings instability due to mass layoffs have the potential to explain a significant fraction of the effect of a job loss on mortality.

Measuring the overall impact of public health insurance receipt is important in an era of increased access to publicly-provided and subsidized insurance. Although government expansion of health insurance to older workers leads to labor supply reductions for recipients, there may be spillover effects on the labor supply of uncovered spouses. While theory predicts a decrease in overall household work hours, financial incentives such as credit constraints, target income levels, and the need for own health insurance suggest that spousal labor supply might increase. In contrast, complementarities of spousal leisure would predict a decrease in labor supply for both spouses. Utilizing a mid-1990s expansion of health insurance for U.S. veterans, we provide evidence on the effects of public insurance availability on the labor supply of spouses. Using data from the Current Population Survey and Health and Retirement Study, we employ a difference-in-differences strategy to compare the labor market behavior of the wives of older male veterans and non-veterans before and after the VA health benefits expansion. Our findings suggest that although household labor supply may decrease because of the income effect, wives' labor supply increases, suggesting that financial incentives dominate complementarities of spousal leisure. This effect is strongest for wives with lower education levels and lower levels of household wealth. Moreover, wives with employer-provided health insurance in the previous year remain on the job while those without increase their hours, suggesting incentives to retain or obtain health insurance. Finally, non-working wives enter the labor force, those who were working part-time increase their hours, and full-time career women are largely unaffected.

Using NLSY data, the authors estimate the long-term costs of job displacement for young adults. Earnings and wage losses were large for the first three years following displacement. Compared to earnings losses found by other studies for more mature workers, however, earnings losses for these young adults were short-lived, with differences between observed and expected earnings narrowing considerably five years after job loss. At that point, the shortfall in annual earnings (relative to what would have been expected absent job loss) was 9% for men and 12.5% for women, and the shortfall in hourly wages was 21.2% for men. Young workers also apparently differ from more established workers in the composition of total earnings losses: for older workers, total losses largely represent actual, immediate earnings losses, whereas for young workers the loss of opportunities for rapid earnings growth is more important.