Participation of married women in the European labor markets and the “added worker effect”

Abstract

We estimate a labor participation model for married women for 11 European countries, using data from the European Community Household Panel (EHCP) corresponding to the years 1994, 1995, and 1996. As the cyclical evolution of labor market participation, unemployment, and even occupation rates may depend on the wife’s reaction to changes in the husbands’ labor situation, we consider that the “added worker effect” has an important role to play in labor market behavior. Our main objective is to test whether the “added worker effect” holds. We find, however, that the labor market participation of married females basically depends on their personal and family characteristics, their non-labor incomes, and their wages, and only in a few countries does the participation of married women seem to be related to the labor status of the husband. We can conclude, therefore, that the “added worker effect” is unusual at the present in Europe, which is a good indicator of the improvement in women’s status in the European labor market, and may be a factor in smoothing the cyclical changes in unemployment.