Abstract
This chapter examines the third mechanism linking crises and labor market outcomes of men and women that of households labor supply responses to income shocks induced by crises. In combining both household-level and macroeconomic data, this chapter is similar in spirit to Cho and Newhouse and Bhalotra and Umaa-Aponte. The chapter addresses the findings reveal the decrease in mens labor force participation during recent crisis is likely a combined result of the first-round sectoral contraction and the second-order discouraged worker effect as a response to the weaker labor market environment. In interpreting the results, several caveats need to be kept in mind. One such caveat is that the presence of a relationship between the job loss of another household member and labor force status in principle only implies correlation rather than causation. More work is needed to understand the role that variations in institutional characteristics, may play in determining the strength of the added worker effect in transition countries.
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