TY - BOOK ID - 84540803 TI - Does Spousal Labor Smooth Fluctuations in Husbands’ Earnings? The Role of Liquidity Constraints PY - 2004 SN - 1462306691 145271195X 1281155403 9786613776761 1451891687 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Married women KW - Women KW - Liquidity (Economics) KW - Assets, Frozen KW - Frozen assets KW - Finance KW - Human females KW - Wimmin KW - Woman KW - Womon KW - Womyn KW - Females KW - Human beings KW - Femininity KW - Married people KW - Wives KW - Employment KW - Economic aspects KW - Econometric models. KW - Labor KW - Macroeconomics KW - Money and Monetary Policy KW - Wages, Compensation, and Labor Costs: General KW - Labor Economics: General KW - Aggregate Factor Income Distribution KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Demand and Supply of Labor: General KW - Labour KW - income economics KW - Monetary economics KW - Wages KW - Income KW - Credit KW - Labor supply KW - Labor economics KW - Labor market KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84540803 AB - This paper theoretically and empirically investigates the role of spousal labor in buffering transitory shocks to husbands' earnings. To measure the amount of the shock that spousal labor absorbs, an instrumented cross-sectional variance decomposition is developed. Using data from the Panel Study of Income Dynamics, the paper finds that the smoothing resulting from the wives' labor response (both labor force participation and hours of work) is larger for households with limited access to credit. This finding, which is consistent with the model's prediction, indicates that because of the presence of liquidity constraints, the temporal change in family income (exclusive of wives' earnings) reinforces the substitution effect in explaining the effect of shocks to the husbands' earnings on spousal labor. ER -