Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232259
Authors: 
Macchioni Giaquinto, Annarita
Jones, Andrew M.
Rice, Nigel
Zantomio, Francesca
Year of Publication: 
2021
Series/Report no.: 
GLO Discussion Paper No. 806
Abstract: 
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 healthrelated '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: 
health shocks
added worker effect
labour supply
informal care
matching methods
panel data
JEL: 
C14
I10
I13
J14
J22
Document Type: 
Working Paper

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