The Response of Wivesf Labor Supply to Husbandsf Job Loss

This paper examines how Japanese wives react to their husbandsf involuntary job loss, and tests the existence of complementarity of a wifefs labor supply to her husbandfs. Utilizing panel data on Japanese households from 1993 to 2004, we found that wivesf labor supply is stimulated when husbands suffer involuntary job loss. The detailed statistics show that not only do working wives raise their labor hours but also nonworking wives begin to participate in the labor market. The added worker effect is evident during the period of job insecurity in Japan following the mid-1990s.