Married women’s added worker effect during the 2008 economic crisis—The case of Turkey
- 348 Downloads
This paper analyzes the labor supply response of married women as a result of their husbands’ job losses (‘added worker effect’). The study uses panel data from Turkey to test the presence of an added worker effect during the global economic crisis of 2008. Identification is achieved by an instrumental variable approach. In particular, an exogenous variation in the output of male-dominated sectors induced by the crisis is used as an instrument for the husbands’ unemployment. Results show that the probability of a woman participating in the labor force increases by 15–28% in response to her husband’s unemployment. However, the effect is not contemporaneous; rather, it appears with a lag of one quarter and only operates for two quarters. The effect is mainly driven by financially-constrained (less-educated and young) couples, which suggests the prevalence of an income effect in spousal labor supply decisions.
KeywordsSpousal labor supply Added worker effect Gender Economic crisis
JEL ClassificationJ22 J16 D13 E32
I am deeply grateful to Margherita Fort and Riccardo Rovelli for their guidance, advice and criticisms throughout my research. Special thanks to Abdurrahman Aydemir, Erich Battistin, Richard Blundell, Arnaud Chevalier, Fabian Lange, Hartmut Lehmann, Silvia Pasqua, Massimiliano Tani, Semih Tumen, Rudolf Winter-Ebmer and Kamil Yilmaz for invaluable comments, as well as Richard Forsythe and Derek Stemple for a thorough language editing. I also thank the seminar participants at the University of Bologna, IZA, Collegio Carlo Alberto, AIEL 2014 Conference in Pisa and EEA 2015 Conference in Mannheim. Last but not least, I wish to express my gratitude to the journal’s editor, Shoshana Grossbard, and three anonymous reviewers for constructive feedback that helped me improve the manuscript. All errors are my own.
Compliance with ethical standards
Conflict of interest
The authors declare no competing financial interests.
- Alp, H., Baskaya, Y. S., Kilinc, M., & Yuksel, C. (2012). Stylized facts for business cycles in Turkey. TCMB Working Paper 1202, Central Bank of the Republic of Turkey.Google Scholar
- Aran, M., Capar S., Sanalmis, H. M. D. O., & Uraz, A. (2010). Recent Trends in female labor force participation in Turkey (in Turkish). Working Report No. 2, World Bank and Turkey State Planning Organization, Ankara.Google Scholar
- Ayhan, S. H. (2013). Do non-wage cost rigidities slow down employment? Evidence from Turkey, IZA Journal of Labor Policy, 2(20), 1–23.Google Scholar
- Bredtmann, J., Otten, S., & Rulff, C. (2014). Husband’s unemployment and wife’s labor supply- the added worker effect across Europe. Ruhr Economic Papers No. 484.Google Scholar
- Blundell, R., Pistaferri, L., & Saporta-Ekstein, I. (2012). Consumption inequality and family labor supply. NBER Working Paper 18445.Google Scholar
- Dayioglu, M., & Kirdar, M. (2010). Determinants of and trends in labor force participation of women in Turkey. Working Report No. 5, World Bank and Turkey State Planning Organization, Ankara.Google Scholar
- Degirmenci, S., & Ilkkaracan, I. (2013). Economic crises and the added worker effect in the Turkish labor market. Levy Economic Institute Working Paper No. 774.Google Scholar
- Karaoglan, D., & Okten, C. (2012). Labor force participation of married women in Turkey: Is there an added or a discouraged worker effect? IZA Discussion Papers 6616.Google Scholar
- Keskin, F. (2010). Textile products manufacturing. Turkish Development Bank Report 107, http://www.kalkinma.com.tr/data/file/raporlar/ESA/ga/2012-GA/esamkitap/pdf/tekstil.pdf, Retrieved on 30.09.2015.
- Law No.4759 (2002). Law on Amendments to Social Security Law. Official Gazette numbered 24772 dated 1 June 2002.Google Scholar
- Lundberg, S. (1988). Labor supply of husbands and wives: A simultaneous equations approach. The Review of Economics and Statistics, 70(2), 224–235.Google Scholar
- Mincer, J. (1962). Labor force participation of married women: A study of labor supply. In H. G. Lewis (Ed.). Aspects of labor economics (pp. 63–97). Princeton, NJ: National Bureau of Economic Research, Princeton University Press.Google Scholar
- TurkStat (2013). Turkish Statistical Institute data base, http://tuikapp.tuik.gov.tr/isgucuapp/isgucu.zul.
- Woytinsky, W. S. (1942). Three aspects of labor dynamics. Washington, DC: Social Science Research Council.Google Scholar