Publication type
Research Paper
Series Number
806
Series
GLO Discussion Papers
Authors
Publication date
March 15, 2021
Summary:
Shocks to health have been shown to reduce labour supply for the individual affected. Less is known about household self-insurance through a partner’s response to a health shock. Previous studies have presented inconclusive empirical evidence on the existence of a health-related `added worker effect’. We use UK longitudinal data to investigate within households both the labour supply and informal care responses of an individual to the event of an acute health shock to their partner. Relying on the unanticipated timing of shocks, we combine coarsened exact matching and entropy balancing algorithms with parametric analysis and exploit lagged outcomes to remove bias from observed confounders and time-invariant unobservables. We find no evidence of a health-related ‘added worker effect’. A significant and sizeable increase in spousal informal care, irrespective of spousal labour market position or household financial status and ability to purchase formal care provision, suggests a substitution to informal care provision, at the expense of time devoted to leisure activities.
Subjects
Link
https://ideas.repec.org/p/zbw/glodps/806.html
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