The Added-Worker Effect in Late Career

Desmond Toohey, University of Michigan

Households with multiple workers can theoretically insure against the job loss of one with the increased labor supply of another. This added worker effect has been documented for the average worker, but older workers may differ from these workers in their attachment to the labor force and ability to find new jobs. I study the labor supply responses of workers over age 51 to their spouses' displacements. I find that women respond little to their husbands' displacements in the short term, but find that men increase probability of employment by 10 percent when their wives are displaced. I find considerable positive effects for the men and women who report the strongest enjoyment of time spent with their spouses.