Briefing
Does Household Labor Supply Insure Against Income Shocks?
Abstract: A household has various means for insuring against a primary income loss, including increasing the spouse's labor supply. However, increasing spousal labor supply does not apply across all incomes, and that is why it is difficult to detect in the data. Our recent working paper "Spousal Labor Response to Primary Income: Identification and Heterogeneity" isolates income shocks that are unexpected and uncorrelated among spouses, both of which are key properties for uncovering the true strength of the spousal labor supply mechanism.
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https://www.richmondfed.org/publications/research/economic_brief/2026/eb_26-06
Description: Briefing
Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2026-02-18
Volume: 26
Issue: 06