Added worker effect

In the added worker effect married women are willing to work more for pay as a response to a loss of real income despite the price of leisure dropping in relation to the wage rate.

A common model used to study the added worker effect views the family as a decision making unit and leisure time as a normal good.

With this understanding, a married woman may choose to enter the labor market to offset the loss of income her family faces when her husband loses his job.

An example of the effect can be found in a study by Arnold Katz, who attributes the bulk of the increase in married female workers in the depression of 1958 “to the distress[ed] job seeking of wives whose husbands were out of work” (1961, p. 478).

Alternative responses include borrowing, living off savings, selling assets, consumption smoothing, and undertaking a more intensive job search by the husband (Lundberg, p. 12; Serneels, 2002).

During the Great Recession, which spanned December 2007 to June 2009, the average duration of unemployment reached a record high in the United States, which led to an increased incidence of the added worker effect (Rampell, 2010).

Between 2007 and 2009, the United States saw a large increase in women's contribution to family income, resulting from a decrease in husband's earnings because three out of four eliminated jobs had belonged to men (Mattingly & Smith, p. 344).