How much labor demand risk do spouses share? Evidence from employer-household data

Studies of the "added worker effect" focus on the labor force participation responses of wives when their husbands experience involuntary job loss. In this study, I provide evidence that labor demand changes are strongly correlated between within households. Using Census 2000 respondent data matched to linked employer-employee data, I measure the extent to which a household's income uncertainty varies in a household's exposure to labor demand risk from household members working at the same business establishment, as well as sharing employment in the same industry, geography, and firm.