DOES MATERNAL MIGRATION AFFECT SPOUSAL LABOR MARKET DECISIONS? EVIDENCE FROM SRI LANKA

This paper examines Sri Lankan men’s labor market outcomes when their wives emigrate to work, leaving the husbands and their children at home in Sri Lanka — the effects of maternal migration on the husbands’ labor market decisions. We used nationally representative cross-sectional data and historical migration rates at the community level as an instrument for maternal migration in two-stage least squares estimations. We find that maternal migration reduces the husbands’ labor supply. Husbands are more likely to exit the labor market and become unemployed; the employed are less likely to moonlight and have lower wages, and those that exit the labor market are more likely to become stay-at-home dads. Using a second instrument, an indicator of whether a community has foreign-employment agencies, we also confirmed our main results. Our findings indicate that policies that aim to promote female migration as an exogenous income source may fall short if they do not address the effects of the husbands’ labor market decisions.

Family Labor Supply Responses to Severe Health Shocks: Evidence from Danish Administrative Records

We provide new evidence on households’ labor supply responses to fatal and severe nonfatal health shocks in the short run and medium run. To identify causal effects, we leverage administrative data on Danish families and construct counterfactuals using households that experience the same event a few years apart. Fatal events lead to considerable increases in surviving spouses’ labor supply, which the evidence suggests is driven by families who experience significant income losses. Nonfatal shocks have no meaningful effects on spousal labor supply, consistent with their adequate insurance coverage. The results support self-insurance as a driving mechanism for the family labor supply responses. (JEL D12, D15, G22, I12, J22)

Job Displacement, Family Dynamics, and Spousal Labor Supply

We study the effectiveness of intrahousehold insurance among married couples when the husband loses his job due to a mass layoff or plant closure. Empirical results based on Austrian administrative data show that husbands suffer persistent employment and earnings losses, while wives’ labor supply increases moderately due to extensive margin responses. Wives’ earnings gains recover only a tiny fraction of the household income loss, and in the short-term, public transfers and taxes are a more important form of insurance. We show that the presence of children in the household is a crucial determinant of the wives’ labor supply response. (JEL D13, J12, J16, J22, J31, J63)

Disability Benefits, Consumption Insurance, and Household Labor Supply

There is no evaluation of the consequences of Disability Insurance (DI) receipt that captures the effects on households’ net income and consumption expenditure, family labor supply, or benefits from other programs. Combining detailed register data from Norway with an instrumental variables approach based on random assignment to appellant judges, we comprehensively assess how DI receipt affects these understudied outcomes. To consider the welfare implications of the findings from this instrumental variables approach, we estimate a dynamic model of household behavior that translates employment, reapplication, and savings decisions into revealed preferences for leisure and consumption. The model-based results suggest that on average, the willingness to pay for DI receipt is positive and sizable. Because spousal labor supply strongly buffers the household income and consumption effects of DI allowances, the estimated willingness to pay for DI receipt is smaller for married than single applicants. (JEL D12, D14, H55, I38, J14, J22)