Health shocks in the household
Health shocks within couples: effects on labour supply and informal caring
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Annarita Macchioni Giaquinto, Andrew Jones, Nigel Rice and Francesca Zantomio Health shocks within couples: effects on labour supply and informal caring
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.
- Annarita Macchioni Giaquinto (Ca’ Foscari University of Venice)
- Andrew Jones (University of York and Monash University, Global Labor Organization Fellow)
- Nigel Rice (University of York)
- Francesca Zantomio (Ca’ Foscari University of Venice)