This paper investigates both the added worker effect (the labour supply responses of women
to their partners’ job losses) and the discouraged worker effect (workers withdrawing from the
labour market because of failed searches) for married women in Australia, with the emphasis
on the former. We focus on the partners’ involuntary job loss experiences, and analyse
women’s labour market activities in the periods before and after their partners’ job loss. By
estimating fixed effects labour supply equations using the first seven waves of data from the
HILDA Survey, we find a significant added worker effect in terms of increased full time
employment and working hours. The findings also suggest that it is harder for the female
partners of males who have recently lost jobs to enter the labour market than for those
already working to increase their working hours to compensate for lost income incurred by
their partners’ job loss. We also find the effect to be persistent in that, one year after the
partners’ job loss, more of those women would still like to work longer hours than they
actually were. By investigating the relationship between self-assessed job-finding probability
on job-seekers’ subsequent labour force participation, and by studying the relationship
between labour force participation of all married women