Added worker effect

The added worker effect refers to an increase in the labor supply of married women when their husbands become unemployed. Underlying the theory is the assumption that married women are secondary workers with a less permanent attachment to the labor market than their partners. As statistics show, married women do not always behave as secondary workers; therefore, the effect is not a universal phenomenon. The added worker effect refers to an increase in the labor supply of married women when their husbands become unemployed. Underlying the theory is the assumption that married women are secondary workers with a less permanent attachment to the labor market than their partners. As statistics show, married women do not always behave as secondary workers; therefore, the effect is not a universal phenomenon. The concept of “additional workers” appeared in empiric studies on unemployment in the United States during the Great Depression conducted in 1940 by economists Wladimir S. Woytinsky and Don D. Humphrey (Humphrey, 1940, p. 412). Humphrey's study did not find any observable added worker effect, but it did not deny that added workers participated in the market (Humphrey, p. 415). He challenged the validity of Woytinsky's study in the absence of a time series analysis. In the added worker effect married women are willing to work more for pay as a response to a loss of real income despite the price of leisure dropping in relation to the wage rate. A common model used to study the added worker effect views the family as a decision making unit and leisure time as a normal good. With this understanding, a married woman may choose to enter the labor market to offset the loss of income her family faces when her husband loses his job. Since family wages are pooled and the price of consuming leisure varies among individuals depending on earning power, an increase in one individual's income may result in other family members gaining leisure time by working less (Mincer, 1962, p. 65). The diminishing marginal utility of income explains why the family would work fewer hours.