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A Reevaluation Of the Role Of Family In Immigrants' Labor Market Activity;Evidence From a Comparison Of Single and Married Immigrants

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Author Info

  • Sarit Cohen-Goldner

    ()
    (Bar Ilan University)

  • Chemi Gotlibovski

    ()
    (The Academic College of Tel-Aviv Yaffo)

  • Nava Kahana

    ()
    (Department of Economics,Bar Ilan University,IZA)

Abstract

Previous papers tested the validity of the Family Investment Hypothesis (FIH) among immigrants by comparing the labor market outcomes of immigrant couples and native or mixed couples. Here we propose an alternative test for the FIH which is based on a comparison between married and single immigrants. The logic underlying this alternative method states that if credit constraints are binding, then only married immigrants can cross-finance their investment within the family. In order to overcome potential selection bias that would arise if unobserved characteristics that affect the marital status of the individual also affect his/her labor market outcomes, we construct a difference-in-differences estimator that exploits variation in the labor market outcomes of married and single natives. Implementation of this method using US and Israeli data leads to a rejection of the FIH in both countries.

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Bibliographic Info

Paper provided by Department of Economics, Bar-Ilan University in its series Working Papers with number 2009-13.

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Date of creation: May 2009
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Handle: RePEc:biu:wpaper:2009-13

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Postal: Faculty of Social Sciences, Bar Ilan University 52900 Ramat-Gan
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  1. Christopher Worswick, 1999. "Credit Constraints and the Labour Supply of Immigrant Families in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 32(1), pages 152-170, February.
  2. Harriet Duleep & Seth Sanders, 1993. "The decision to work by married immigrant women," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(4), pages 677-690, July.
  3. Baker, Michael & Benjamin, Dwayne, 1997. "The Role of the Family in Immigrants' Labor-Market Activity: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 87(4), pages 705-27, September.
  4. Worswick, C. & Beach, C.M., 1990. "Is There a Double-Negative Effect on the Earnings of Immigrant Women?," Papers 1990-6, Queen's at Kingston - Sch. of Indus. Relat. Papers in Industrial Relations.
  5. Christopher Worswick, 1996. "Immigrant Families in the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 378-396, December.
  6. Francine D. Blau & Lawrence M. Kahn & Joan Y. Moriarty & Andre Portela Souza, 2003. "The Role of the Family in Immigrants' Labor-Market Activity: An Evaluation of Alternative Explanations: Comment," American Economic Review, American Economic Association, vol. 93(1), pages 429-447, March.
  7. Deborah Cobb-Clark & Thomas F. Crossley, 2002. "Revisiting the Family Investment Hypothesis," Department of Economics Working Papers 2002-04, McMaster University.
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Cited by:
  1. Seik Kim & Nalina Varanasi, . "Labor Supply of Married Women in Credit-Constrained Households: Theory and Evidence," Working Papers UWEC-2010-01, University of Washington, Department of Economics.

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