Skip to main content

Advertisement

SpringerLink
Log in

Gender, added-worker effects, and the 2007–2009 recession: Looking within the household

  • Published:
Review of Economics of the Household Aims and scope Submit manuscript

Abstract

The U.S. recession of 2007–2009 saw unemployment rates for men rise by significantly more than those for women, resulting in the downturn’s characterization as a ‘mancession’. This paper uses data from the Census Bureau’s American Community Survey to reexamine gender-related dimensions of the 2007–2009 recession. Unlike most previous work, we analyze data that connects men’s and women’s employment status to that of their spouses. A difference-in-difference framework is used to characterize how labor-market outcomes for one spouse varied according to outcomes for the other. Results show that that employment rates of women whose husbands were non-employed rose significantly in the recession, while those for people in other situations held steady or fell—consistent with the view that women took on additional bread-winning responsibilities to make up for lost income. However, probabilities of non-participation did not rise by more for men with working wives than they did for other men, casting doubt on ideas that men in this situation made weaker efforts to return to work because they could count on their wives’ paychecks to support the household.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. Note, however, that the opposite was true before 1980 (Rives and Sosin 2002; Grown and Tas 2010).

  2. This is consistent with evidence for Japan for 1993–2004, for which Kohara (2010) found that, when husbands suffer involuntary job loss, working wives raise their labor hours, and nonworking wives begin to participate in the labor market.

  3. See, for example, Brown et al. (2006). Additionally, lower earnings prospects for a spouse who lost a housing-related job may increase the relative wage of the other spouse, potentially affecting the calculus of who should work how much outside the home.

  4. See Case et al. (2005) on housing-wealth effects on consumer spending. Estimates from the Federal Reserve’s Flow of Funds show the value of real estate owned by households to have fallen by 24.7 % between 2006 and 2009.

  5. According to the U.S. Bureau of Economic Analysis, personal saving fell from 5.3 % of disposable income in 1998 to 1.6 % in 2005.

  6. Lundberg (1985: 12) suggests that increased credit constraints during recessions could be an important factor behind the added-worker effect.

  7. See Blundell et al. (2005) and Brown et al. (2006).

  8. For contrary evidence on Dutch households, see Cherchye et al. (2010).

  9. See Hellerstein and Morrill (2011) for evidence on the pro-cyclicality of divorce.

  10. Bitler and Hoynes (2010) analyze cyclicalities in participation in a number of social programs.

  11. See U.S. Census Bureau (2009) on the design and methodology of the ACS. The ACS has been fielded on a national scale since 2005.

  12. Note that results differ minimally if individuals in the pre-retirement age range (ages 55–64) are excluded from the analysis.

  13. Bell and Branchflower (2011) discuss youth unemployment and the Great Recession.

  14. According to Census Bureau estimates from the ACS, in 2009 there were 55.8 million opposite-sex married couples, 5.9 million opposite-sex cohabiting couples, and 581,000 same-sex couples (U.S. Census Bureau 2009, Table for the 2009 ACS).

  15. Also using data from the Current Population Survey, Boushey (2009) found that, among women whose husbands were not employed, the share working for pay outside the home rose during the recession, with only modest increases among men with non-employed wives.

  16. Author’s calculations using the weighted 2007 SCF data. For discussion of low and undiversified asset-holdings at earlier stages of the lifecycle, see Browning and Crossley (2001) and Bertaut and Starr-McCluer (2002). Note that other factors could contribute to differential effects of age.

  17. As discussed in Dietz and Haurin (2003), effects of homeownership on unemployment are not clear theoretically. However, research using micro data tends to find unemployment spells to be shorter among homeowners versus renters (Goss and Phillips 1997; Munch et al. 2006).

  18. See Consuelo Colom and Cruz Molés (2013) for an intra-household analysis of interrelationships between labor supply and housing.

  19. While it would be preferable to distinguish between cases in which a person was briefly versus persistently unemployed, the ACS does not collect information on durations of unemployment spells or precise timing of labor-force withdrawals. The zero/one distinction between employment and non-employment also obscures the fact that many people who were ‘employed’ in the recession were working fewer hours than they would have liked.

  20. Note that the matrix Xit includes Gjit and Hjit.

  21. Thus, for example, the BLS data show an increase in the unemployment rate of 7.8 percentage points between December 2007 and June 2009 for men aged 16–19 years, compared to a 5.3 percentage point rise for men aged 25 years and older. Removing the restriction of the sample to householders and spouses and computing unemployment as a share of the labor force, changes in unemployment using the ACS data would be 4.2 and 2.7 percentage points for men and women respectively.

  22. This squares with Congregado et al.’s (2011) analysis of Spanish data, which found that increases in unemployment reduce non-participation only up to some threshold level of unemployment (around 12%): thereafter the ‘discouraged worker’ effect cancels out ‘added worker’ effects, with further increases in unemployment having no net effect on non-participation.

  23. Of course for women too some part of the added-worker effect could reflect this effect.

  24. See the Office of Federal Housing Enterprise Oversight (2008) for details. Key advantages of the FHFA index are its availability for all 284 metropolitan statistical areas in the IPUMS data and its repeat-sales method, which provides a control for changes in housing quality. Note that use of the FHFA index requires us to limit the analysis to the subset of observations located in metropolitan areas (which represents about three-quarters of the U.S. population). The Case-Shiller/S&P index is available for the largest 20 metropolitan areas only.

  25. Potentially, homeowners with non-employed spouses in such metros may have had larger increases in willingness to work, but more severe deterioration in their abilities to find jobs. However, for both women and men, changes in this probability did not differ significantly according to the decline in home prices. See Starr (2013) for details.

  26. Author’s computations, using the weighted ACS data for householders and spouses.

  27. Again using business-cycle dates from the National Bureau of Economic Research.

  28. Buitrago and Starr (2013) provide a more detailed analysis of the ACS data using information on race, ethnicity, and nativity.

  29. Dickerson Von Lockette (2011) compares recessionary changes in labor-market status for black versus white non-college men.

  30. See Jacobsen (2007, Chapter 6) for time-series trends in occupational segregation by gender.

References

  • Becker, G., & Ghez, G. (1975). The allocation of time and goods over the life cycle. New York: Columbia University Press for the NBER.

    Google Scholar 

  • Bell, D., & Branchflower, D. (2011). Young people and the Great Recession. IZA Discussion Paper No. 5674 (April).

  • Bertaut, C., & Starr-McCluer, M. (2002). Household portfolios in the United States. In L. Guiso, M. Haliassos, & T. Jappelli (Eds.), Household portfolios (pp. 181–217). Cambridge, MA: MIT Press.

    Google Scholar 

  • Bitler, M., & Hoynes, H. (2010). The state of the safety net in the post-welfare reform era. NBER Working Paper No. 16504.

  • Blundell, R., Chiappori, P.-A., & Meghir, C. (2005). Collective labor supply with children. Journal of Political Economy, 113(6), 1277–1306.

    Article  Google Scholar 

  • Blundell, R., Pistaferri, L., & Saporta-Eksten, I. (2012). Consumption inequality and family labor supply. NBER Working Paper No. 18445.

  • Bobonis, G. J. (2009). Is the allocation of resources within the household efficient? New evidence from a randomized experiment. Journal of Political Economy, 117(3), 453–503.

    Article  Google Scholar 

  • Boushey, H. (2009). Women breadwinners, men unemployed. Center for American Progress (July 20). http://www.americanprogress.org/issues/2009/07/breadwin_women.html.

  • Breunig, R., & Dasgupta, I. (2005). Do intra-household effects generate the food stamp cash-out puzzle? American Journal of Agricultural Economics, 87(3), 552–568.

    Article  Google Scholar 

  • Brown, C., Haltiwanger, J., & Lane, J. (2006). Economic turbulence: Is a volatile economy good for America?. Chicago: University of Chicago Press.

    Book  Google Scholar 

  • Browning, M., & Crossley, T. (2001). The life-cycle model of consumption and saving. Journal of Economic Perspectives, 15(3), 3–22.

    Article  Google Scholar 

  • Buitrago, M. & Starr, M. (2013). Gender, race/ethnicity and the 2007–09 recession: Another look within the household. Paper presented at the 2013 annual meetings of the Allied Social Science Association, San Diego, CA.

  • Case, K., Quigley, J., & Shiller, R. (2005). Comparing wealth effects: The stock market versus the housing market. B.E. Press Advances in Macroeconomics, 5(1), Article 1.

    Google Scholar 

  • Cherchye, L., de Rock, B. & Vermeulen, F. (2010). Married with children: A collective labor supply model with detailed time use and intra-household expenditure information. Tilburg University, Center for Economic Research, Discussion Paper No. 2010–99.

  • Congregado, E., Golpe, A. A., & van Stel, A. (2011). Exploring the big jump in the Spanish unemployment rate: Evidence on an ‘added-worker’ effect. Economic Modelling, 28(3), 1099–1105.

    Article  Google Scholar 

  • Consuelo Colom, M., & Cruz Molés M. (2013). Housing and labor decisions of households. Review of Economics of the Household. doi:10.1007/s11150-012-9165-6.

  • Cullen, J., & Gruber, J. (2000). Does unemployment insurance crowd out spousal labor supply? Journal of Labor Economics, 18(3), 546–572.

    Google Scholar 

  • Dickerson Von Lockette, N. (2011). Race and recession: A comparison of the economic impact of the 1980s and 2007–09 recessions on non-college-educated black and white men. In M. Starr (Ed.), Consequences of economic downturn: Beyond the usual economics (pp. 121–138). New York: Palgrave Macmillan.

    Google Scholar 

  • Dietz, R., & Haurin, D. (2003). The social and private micro-level consequences of homeownership. Journal of Urban Economics, 54(3), 401–450.

    Article  Google Scholar 

  • Duflo, E. (2003). Grandmothers and granddaughters: Old-age pensions and intra-household allocation in South Africa. World Bank Economic Review, 17(1), 1–25.

    Article  Google Scholar 

  • Duflo, E. & Udry, C. (2004). Intra-household resource allocation in cote d’Ivoire: Social norms, separate accounts, and consumption choices. NBER Working Paper No. 10498.

  • Engemann, K., & Wall, H. (2010). Effects of recessions across demographic groups. Federal Reserve Bank of St. Louis Economic Review, 92(1), 1–26.

    Google Scholar 

  • Goodman, W., Antczak, S., & Freeman, L. (1993). Women and jobs in recessions: 1969–92. Monthly Labor Review, 116(7), 26–35.

    Google Scholar 

  • Goss, E., & Phillips, J. (1997). The impact of homeownership on the duration of unemployment. Review of Regional Studies, 27(1), 9–27.

    Google Scholar 

  • Grown, C. & Tas, E. (2010). Gender equality in the U.S. labor markets in the ‘Great Recession’ of 2007–2010. American University, Department of Economics Working Paper No. 2010–15.

  • Heckman, J., & MaCurdy, T. (1980). A life cycle model of female labor supply. Review of Economic Studies, 47(1), 47–74.

    Article  Google Scholar 

  • Hellerstein, J. & Morrill, M. (2011). Booms, busts and divorce. B.E. Journal of Economic Analysis and Policy, 11(1), Article 54.

  • Jacobsen, J. (2007). The economics of gender (3rd ed.). Malden, MA: Blackwell.

    Google Scholar 

  • Jappelli, T. (1990). Who is credit constrained in the U.S. economy? Quarterly Journal of Economics, 105(1), 219–234.

    Article  Google Scholar 

  • Juhn, C. & Potter, S. (2007). Is there still an added-worker effect? Federal Reserve Bank of New York, Staff Report No. 310.

  • Katz, E. (1997). The intra-household economics of voice and exit. Feminist Economics, 3(3), 25–46.

    Article  Google Scholar 

  • Kohara, M. (2010). The response of Japanese wives’ labor supply to husbands’ job loss. Journal of Population Economics, 23(4), 1133–1149.

    Article  Google Scholar 

  • Lundberg, S. (1985). The added worker effect. Journal of Labor Economics, 3(1), 11–37.

    Article  Google Scholar 

  • Mattingly, M., & Smith, K. (2010). Changes in wives’ employment when husbands stop working: A recession-prosperity comparison. Family Relations, 59(4), 343–357.

    Article  Google Scholar 

  • Munch, J., Rosholm, M., & Svarer, M. (2006). Are homeowners really more unemployed? Economic Journal, 116(514), 991–1013.

    Article  Google Scholar 

  • Office of Federal Housing Enterprise Oversight (2008). Revisiting the differences between the OFHEO and S&P/Case-Shiller House Price Indexes: New explanations. Working paper (January), available at http://www.fhfa.gov/webfiles/1163/OFHEOSPCS12008.pdf.

  • Oreffice, S. (2011). Sexual orientation and household decision making: Same-sex couples balance of power and labor supply choices. Labour Economics, 18(2), 145–158.

    Article  Google Scholar 

  • Rives, J., & Sosin, K. (2002). Occupations and the cyclical behavior of gender unemployment rates. Journal of Socio-Economics, 31(3), 287–299.

    Article  Google Scholar 

  • Ruggles, S., Alexander, J. T., Genadek, K., Goeken, R., Schroeder, M. B., & Sobek, M. (2010). Integrated Public Use Microdata Series: Version 5.0 [Machine-readable database]. Minneapolis: University of Minnesota.

  • Sahin, A., Song, J., & Hobijn, B. (2010). The unemployment gender gap during the 2007 recession. Current Issues in Economics and Finance, Federal Reserve Bank of New York (Feb.). Accessed electronically at: http://www.newyorkfed.org/research/current_issues/ci16-2.pdf (8/24/2011).

  • Sierminska, E., & Takhtamanova, Y. (2010). Job flows, demographics and the Great Recession. CEPS/INSTEAD Working Paper Series 2010–41, http://www.ceps.lu/pdf/11/art1594.pdf.

  • Spletzer, J. (1997). Reexamining the added worker effect. Economic Inquiry, 35(2), 417–427.

    Google Scholar 

  • Stephens, M. (2002). Worker displacement and the added worker effect. Journal of Labor Economics, 20(3), 504–537.

    Article  Google Scholar 

  • Starr, M. (2013). Gender and the 2007-09 recession: Looking within the household. American University working paper.

  • U.S. Census Bureau. (2009). American Community Survey: Design and methodology. Washington, DC: U.S. Government Printing Office.

    Google Scholar 

  • Wall, H. J. (2009).The ‘man-cession’ of 2008–2009: It’s big, but it’s not great. The Regional Economist, Federal Reserve Bank of St. Louis, Oct.: 4–9. Accessed electronically at: http://stlouisfed.org/publications/pub_assets/pdf/re/2009/d/mancession.pdf.

  • Ward-Batts, J. (2008). Out of the wallet and into the purse: Using micro data to test income pooling. Journal of Human Resources, 43(2), 325–351.

    Article  Google Scholar 

  • Woytinsky, W. S. (1942). Three aspects of labor dynamics. Washington, DC: Social Science Research Council.

    Google Scholar 

Download references

Acknowledgments

I’m grateful to Manuel Buitrago, Natalia Radchenko, Emcet Tas, session participants at the 2011 meetings of the International Confederation of Associations for Pluralism in Economics and the Southern Economic Association, two anonymous referees, and coeditor Sonia Oreffice for valuable comments on earlier versions of this paper.

Author information

Authors and Affiliations

  1. Department of Economics, Kreeger Hall 118, American University, 4400 Massachusetts Avenue NW, Washington, DC, 20016, USA

    Martha A. Starr

Authors
  1. Martha A. Starr
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Martha A. Starr.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Starr, M.A. Gender, added-worker effects, and the 2007–2009 recession: Looking within the household. Rev Econ Household 12, 209–235 (2014). https://doi.org/10.1007/s11150-013-9181-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11150-013-9181-1

Keywords

JEL classification

Search

Navigation