Job Insecurity: A Collective Approach

This study investigates the effects of perceived unemployment risks on the distribution of bargaining power between spouses in a household context. As the replacement ratio is rarely above 50%, becoming unemployed has serious consequences on an individual’s consumption, savings and wealth. The risk of losing the job is shown to be a pertinent consideration when household members make consumption and labour supply decisions. This work sheds light on how unemployment risk may affect the interaction between spouses and their decision structure within the Collective model.