Employment Contract Matching: An Analysis of Dual Earner Couples and Working Households

We explore the significance of intra-couple and intra -household influences on three broad types of employment contracts: self-employment, performance related pay, and salaried employment. Individuals may pool income risk with their partners by holding a diversified portfolio of employment contracts, introducing intra-household risk pooling. Alternatively, employment contract matching may occur whereby individuals within couples or households are employed under similar contracts. Our empirical analysis, based on cross-section data drawn from the British Family Expenditure Surveys 1996 to 2000, provides evidence of employment contract matching both within dual earner couples and, to a lesser extent, in the context of working household members.