Job Loss and Household Labor Supply Adjustments in Developing Countries: Evidence from Argentina.

This article examines how households in Argentina respond to the job loss of the male household head by analyzing labor supply adjustments of spouses and children, as well as their interactions, using longitudinal data from 1995 to 2015. The study finds that such job loss significantly increases female spouses’ labor-force participation—by about 15 percentage points—and also raises the likelihood that women take informal or downgraded jobs. Children’s labor participation rises by 6 to 9 percentage points, while educational drop-out rates increase by approximately 14 percentage points, with mothers’ labor participation mitigating daughters’ but not sons’ educational drop-out. The effects are more pronounced in lower-income households, and although social security and unemployment insurance can reduce adverse outcomes, their limited coverage in Argentina restricts their overall impact. The findings highlight the importance of expanding social protection and targeted employment policies to support vulnerable households and safeguard human capital formation in developing country contexts.