Anticipatory Effects of Public Survivor Insurance on the Labour Supply of Married Women

Julie Treguier , DIW Berlin

Public survivor benefits (SB), originally designed to provide support to widows and widowers, were established in an era of traditional marriages, where husbands were the primary breadwinners. For many widows, SB was their main source of income. However, as female labor force participation has substantially increased over time, these programs have undergone reforms, resulting in reduced generosity or, in some cases, elimination. This paper explores the possibility of inverse causality: do reforms in SB schemes alter the labour supply of married women and their husbands? We draw upon comprehensive administrative data covering the entire Dutch population and focus on a reform that significantly restricted SB eligibility. In our analysis, we leverage the cohort-based implementation of the reform and we include cohabitating women as a control group to identify the causal effects of SB on labour supply. Employing a difference in discontinuity (RD-DD) analysis, we show that married women increase their labour force participation by 7%. We do not find any reaction for their husbands. Our findings document a long-term and strong anticipatory reaction to the reform, suggesting that reducing public survivor insurance prompts labour supply adjustments among married women.

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 Presented in Session 27. Flash session 1 Economics, Human Capital and Labour Markets