Household Labor Supply Research Articles

Unemployment claims during COVID-19 and economic support measures in the U.S.

Governments want to know how effective COVID-19 anti-contagion policies and implemented economic stimulus measures have been to plan their short-run interventions. We condition on the state of the pandemic to assess the impact of non-pharmaceutical interventions and economic stimulus policies on the excess unemployment insurance claims in the United States. We focus on weekly data between February 2020 and January 2021 and motivate our analysis by the theoretical framework of the second-wave SIR-macro type models to build a panel Vector AutoRegressive (VAR) specification. Non-pharmaceutical interventions become effective immediately and impact the labor market negatively. Economic stimulus takes about a month to turn effective and only partially eases the economic welfare losses. Health-related restrictive measures are primarily driven by the state of the pandemic. Economic support policies depend predominantly on the reaction of the labor market rather than the severity of the pandemic itself.

The role of paid family leave in labor supply responses to a spouse's disability or health shock

Disability onset and major health shocks can affect the labor supply of those experiencing the event and their family members, who face a tradeoff between time spent earning income and providing care. This decision could be affected by the availability of paid family leave. We examine the role of paid leave mandates in caregiving and labor supply decisions after a spouse's disability or health shock. Using data from the Survey of Income and Program Participation, we show that paid leave mandates reduce the likelihood that potential caregivers report decreasing their paid work hours to provide caregiving after a spouse's health shock. However, if caregivers are unlikely to have access to job protection, paid leave mandates also increase the likelihood of leaving the labor market to provide caregiving and working fewer weeks. There is limited evidence of an effect of paid leave on other employment outcomes. Our findings demonstrate that paid leave has some influence on household labor supply decisions after spousal health shocks, but its role should be considered together with the availability of job protection.

Intrahousehold Bargaining Power in Spain: An Empirical Test of the Collective Model

This paper analyzes the intrahousehold bargaining power of spouses in Spanish families, in a collective framework. We estimate household labor supply equations and, under certain testable restrictions, we obtain a theoretically derived sharing rule for household income, which characterizes intrahousehold bargaining power. Then, using unique data on decision-making in the household, we construct Pareto weights, and study the validity of the collective model by comparing the theoretical sharing rule and the constructed Pareto weight. The results reveal that both the observed Pareto weight and the theoretical sharing rule display qualitative similarities, thus providing direct empirical support to the collective model. Furthermore, the results suggest that Spanish wives behave more altruistically, while husbands behave more egoistically. This should be taken into account by policy makers and researchers when analyzing inequality in the household, and contemplating specific policies affecting the household.

The Effect of Tenure Security on Household Labour Supply and Agricultural Production: Evidence From Vietnam

The Effect of Tenure Security on Household Labour Supply and Agricultural Production: Evidence From Vietnam

Land Titling and Household Labor Supply: Evidence From Mexico

Land Titling and Household Labor Supply: Evidence From Mexico

Commitment and the Dynamics of Household Labor Supply

Commitment and the Dynamics of Household Labor Supply

Job Loss and Household Labor Supply Adjustments in Developing Countries: Evidence From Argentina

Fil: Ciaschi, Matias Omar. Consejo Nacional de Investigaciones Cientificas y Tecnicas. Centro Cientifico Tecnologico Conicet - La Plata; Argentina. Universidad Nacional de La Plata. Facultad de Ciencias Economicas. Departamento de Ciencias Economicas. Centro de Estudios Distributivos Laborales y Sociales; Argentina. Universidad Nacional de la Plata. Facultad de Cs.economicas. Instituto de Investigaciones Economicas.; Argentina

Effects of school closure on household labor supply: Evidence from rural China

This paper studies the effects of school closure on household labor supply exploiting China's large-scale rural primary school closing during the early 2000s. Using CHNS 1991–2011 and CHIP 2007–2008 datasets and a difference-in-differences approach, we find that school closure significantly increases the total annual income of mothers of primary school-aged children, which comes virtually entirely from increases in wage income, due to more participation, more working hours, and higher wage rates. This significant positive effect can plausibly be attributed to their migration responses: mothers engage in temporary rural-urban migration to care for children following school closure. We find no effects on fathers' income and migration behavior. Our study provides the first causal estimation of the impacts of school closure on household labor supply and sheds light on the migration decision-making of rural females.

The impact of bequest motives on labor supply and retirement behavior in Japan: A theoretical and empirical analysis

Do individuals who want to leave a bequest work more and retire later than other individuals? Does the reason for wanting to leave a bequest (altruism vs. exchange) matter? In this paper, we conduct a theoretical and empirical analysis of the impact of bequest motives on the labor supply and retirement behavior of households in Japan, and to the best of our knowledge, it is virtually the first paper to do so. We conduct an empirical analysis using micro data from a unique survey—the Preference Parameters Study of Osaka University—and show that respondents with an altruistic or strategic/exchange bequest motive work more at the intensive margin than those without any bequest motive but that respondents with a strategic or exchange bequest motive work less at the extensive margin (i.e., retire earlier) than those without any bequest motive. Our findings for the strategic or exchange motive suggest that respondents with such a motive tend to work more than others before they retire so that they can earn more, leave a larger bequest to their children, and elicit more care from them but that they tend to retire earlier than others so that they can start receiving care for themselves and their spouses from their children sooner. Our findings have important policy implications because they imply that inheritance taxes may affect people's labor supply and retirement behavior by influencing the strength of their bequest motives and that these effects may differ by the type of bequest motive.

Does violent conflict affect the labor supply of farm households? The Nigerian experience

AbstractNigeria has experienced bouts of violent conflict in different regions since its independence leading to significant loss of life. In this article, we explore the average effect of exposure to violent conflict generally on labor supply in agriculture. Using a nationally representative panel dataset for Nigeria from 2010 to 2015, in combination with armed conflict data, we estimate the average effect of exposure to violent conflict on a household's farm labor supply. Our findings suggest that on average, exposure to violent conflict significantly reduces total family labor supply hours in agriculture. We also find that the decline in family labor supply is driven by a significant decline in the household head's total number of hours on the farm.

Negative Home Equity and Household Labor Supply

ABSTRACTUsing U.S. household‐level data and plausibly exogenous variation in the location‐timing of home purchases with a single lender, I find that negative home equity causes a 2% to 6% reduction in household labor supply. Supporting causality, households are observationally equivalent at origination and equally sensitive to local housing shocks that do not cause negative equity. Results also hold comparing purchases within the same year‐metropolitan statistical area that differ by only a few months. Though multiple channels are likely at work, evidence of nonlinear effects is broadly consistent with costs associated with housing lock and financial distress.

Hire or Care: The Effects of Aging Parents on Household Labor Supply.

This paper analyzes how aging parents' health conditions affect household labor supply. I propose a time-use model with wage heterogeneity and assume that care responsibilities involve both time and budget constraints. When households can purchase care services, differences in secondary earners' wages and care requirements lead to heterogeneity in household responses to a parental health shock. Primary earners and high-wage secondary earners work more. I confirm the model's predictions by using panel data from the Health and Retirement Study to construct an exogenous shock from the change in parents' health conditions and estimate its impact on labor supply.

Conditional cash transfer programs and household labor supply

Employment correlates with the reduced risk of poverty. Through a randomized controlled trial, we evaluate the impact of a conditional cash transfer (CCT) program offered to low-income families with dependent children on household members’ labor supply. Recipients are required to attend labor-market-oriented mentoring courses as a condition for receiving the transfer. One year after admission to the program, fathers assigned to the CCT program are more likely to work (+14 percent) than fathers assigned to an unconditional cash transfer program or to a pure control group. No effect is observed for mothers. Results seem to be explained by improved family networks and increased investments, especially for fathers, in activities that enhance labor market opportunities.

The Effects of Public Sector Employment on Household Savings and Labor Supply

In many countries the structure of wages and the labor law legislation are completely different for public and private sector employees. In this paper, we develop a general equilibrium overlapping generations model to study the effect of such differences on household savings and labor supply. To conduct our analysis, first we use microdata from two Brazilian household surveys to document that civil servants save and work significantly less than their counterparts in the private sector. Second, we use matched employer-employee micro-data from Brazil (RAIS) to document differences between the two sectors in terms of wage and unemployment risk. Then, we calibrate the model to be consistent with micro and macro evidence for Brazil. Our counterfactual exercises show that differences in wages characteristics and labor law legislation accounts for nearly 70\% of the gap in savings between civil servants and private sector workers, and 57\% of the gap in labor supply. In addition, we find that eliminating those differences can produce sizeable increase on aggregate savings, employment and welfare.

Old-Age Pensions and Female Labour Supply in India

Whether cash transfers have unintended behavioural effects on the recipient household's labour supply is of considerable policy interest. We examine the 'intent to treat effect' of the Indira Gandhi National Old-Age Pension Scheme on prime-age women's labour supply decisions in India, where female labour force participation continues to decline over time. We find that having a pension-eligible individual in the household increases the probability of working by 3.2 percentage points for women aged 20-50, with the effect stronger for urban women.

Household Debt and Labour Supply

In this paper, we first develop a theoretical framework with three types of household: outright homeowners, mortgagors and renters. We then examine empirically how household debt affects the response of labour supply to shocks to income, mortgage interest rates and house prices for each type of household. In line with our framework, we find that negative income shocks lead to lower participation among outright homeowners while increasing mortgagors’ desired hours; surprise rises in interest rates lead to increases in desired hours that are larger the higher is the household’s debt level; and falls in house prices increase mortgagors’ desired hours.

Household response to an extreme shock: Evidence on the immediate impact of the Covid-19 lockdown on economic outcomes and well-being in rural Uganda.

We provide evidence on the economic and well-being impact of the Covid-19 lockdown on a sample of households in rural Uganda. Our sample consists of 1,277 households randomly drawn from 114 rural villages in western Uganda and surveyed in-person in early March 2020, just before the lockdown. We followed up with this sample in May 2020, reaching over 85% of them by phone. We find a large decline of 60% in household non-farm income due to household enterprise profits and labour income being almost wiped-out post the lockdown. Households respond to this loss of income in three key ways. One, there is a 40% decrease in food expenditure per adult equivalent. Two, they use up nearly 50% of their savings and borrow more, but have not yet liquidated their fixed assets or sold livestock. Three, they increase total household labour supply to household farm and livestock, more than making up for the decline in supply to enterprises and labour outside the household. We find a decrease in well-being as a result of this: there is an increase in the likelihood of missing a meal, a decline in reported satisfaction with quality of life, a higher likelihood of having a major argument with their spouse and an increase in perceived frequency of intimate partner violence against women in the village. The negative effects of the lockdown are greater for households that were wealthier at baseline, since these households were more reliant on enterprise and salaried income. These results were one of the first to show a large negative impact of the lockdown for a rural population. Our findings are important to policy makers in Uganda and other developing countries as they suggest income and consumption support is needed for rural households.

HEALTH SHOCKS AND LABOR SUPPLY RESPONSES: EVIDENCE FROM URBAN NORTH-CENTRAL OF NIGERIA

The study was conducted in three (3) States of the North-Central Nigeria to investigate households’ labor supply to health shocks in urban north-central of Nigeria. A multi-stage sampling technique was employed to select 900 households from 18 Council Wards across the three (3) States of north-central of Nigeria covering a period of five (5) months (March to July, 2019). The study found that labor supply was an important response to illness as households increased their labor supply in response to illness shocks. The results showed that 14% of men and 21% of women employed in the study areas missed at least one day of work due to unanticipated illness. Also, women in the labor force missed work due to illness or caregiving duties in 6.2% of weeks and 3.2% of weeks for men. Men and women work more in order to increase their take-home pay and compensate for the lost income due to absence from work of another household members. The findings further showed that men were 7.8% points more likely to work in weeks in which another worker in the household is unexpectedly ill. The men worked an average of 0.385 more days (P = 0.13) and 4.9 more hours as the result of the illness of a fellow worker in the household. It was also disclosed that the overall labor supply response (P = 0.17) was driven by males in households with less assets and education. The regression estimates showed that males in wealthier households were less likely to increase labor supply when another worker in the household was unexpectedly ill. A one (1) standard deviation increase in assets was associated with 0.313 fewer days worked by man in response to an illness shock (P = 0.17) and fewer hours (P = 0.15) implying that wealthier households had fungible savings that they can access to smoothen consumption after short-run shocks. The study also found that total household earnings fell by N91.00 and N72.00 when men and women, respectively, missed work because of illness. The estimated labor hour’s responses showed a larger drop of 32 hours for male illness and 18 hours for female. It was concluded that despite the increase in labor supply from other males in the household, total household income and labor supply decreased when a household member was unexpectedly ill. The study recommended health insurance policies by the government towards a reduction of illness burden for the households in the study area.

Marital Property Laws and Women’s Labour Supply

In this article, we examine whether and, if so, how changes in the marital property law after the 1989 amendment of the Civil Code of Quebec to improve economic equality between spouses affected household labour supply and individuals’ marital decisions. We exploit detailed monthly information on individual labour market and marital status from the Labour Force Survey to analyze short-term changes in labour supply and marital decisions before and after the reform in Quebec relative to other provinces that did not experience changes in marital property laws over that time period. We find that the Quebec family patrimony changes reduced the work incentives of married women, with a stronger decline in hours worked among less-educated married women who gained most from the increased economic protection. The change in the Quebec redistributive divorce law increased the likelihood of divorce among relatively less-educated spouses (who have more to gain from the equal sharing of the family patrimony at divorce) and increased new marriages among couples in which wives are relatively more educated than husbands.

Does the old-age pension scheme improve household welfare? Evidence from India

Abstract As India’s population has been ageing due to declines in fertility and mortality rates, more policy emphasis has been placed on reducing poverty among the elderly. The present study aims to examine the effect of Indira Gandhi National Old Age Pension Scheme (IGNOAPS) on household welfare indicators, such as consumption expenditure, income, assets, and poverty. Using the household longitudinal data based on the India Human Development Survey in 2004–5 and 2011–12, we have applied the Propensity Score Matching to build a counterfactual group and have used the propensity-score weighted fixed effects model to eliminate time-invariant unobservable household characteristics. The results show that the IGNOAPS participation increased consumption expenditure, food and non-food expenditure and assets, while reducing the household labour supply. The sub-sample estimations show that these effects are observed only when recipients are women. However, the results of Difference-in-Difference model imply that the poverty-reducing effect deteriorated in 2011–12 after the government made several changes to programme specifications in 2007. This was likely because some households which accessed IGNOAPS after 2007 reduced the labour supply significantly while keeping the level of consumption.