The Added-Worker Effect within Italian Households

In this article, we study the relationship between female and male labour supply within Italian households. In particular, by focusing on the relationship between male transitions from employment to unemployment and—at the same time—female partner transitions from labour market inactivity to activity, we evaluate the Added-Worker Effect in Italy at the household level. The analysis is carried out over a long period of time—between 2004 and 2019—on data from the Italian Labour Force Survey (ILFS). To identify the Added-Worker Effect, we adopt a difference-in- differences methodology. By exploiting the richness of information contained in the ILFS data on unemployment status and unemployment risk, we were able to evaluate different “dimensions” of the Added-Worker Effect.