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Revisiting the Family Investment Hypothesis

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  • Deborah Cobb-Clark
  • Thomas F. Crossley

Abstract

The family investment hypothesis predicts that credit-constrained immigrant families adopt a household strategy for financing post-migration human capital investment in which the “primary worker” engages in investment activities and the other partner undertakes labor market activities which finance current consumption. Empirical tests of this hypothesis have assumed that the primary worker is the male partner. A substantial portion of immigrants to Australia are admitted on the basis of a “points test” in which points are awarded for labor market skills. Once an principal applicant applies for and is granted a visa, dependent family members are automatically granted visas as well. Thus principal applicant status provides an alternative way to identify primary and secondary workers in immigrant households. We exploit this idea to reevaluate the family investment hypothesis.

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Bibliographic Info

Paper provided by McMaster University in its series Department of Economics Working Papers with number 2002-04.

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Length: 33 pages
Date of creation: Apr 2002
Date of revision:
Handle: RePEc:mcm:deptwp:2002-04

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  1. Charles M. Beach & Christopher Worswick, 1993. "Is There a Double-Negative Effect on the Earnings of Immigrant Women?," Canadian Public Policy, University of Toronto Press, University of Toronto Press, vol. 19(1), pages 36-53, March.
  2. Reimers, Cordelia W, 1985. "Cultural Differences in Labor Force Participation among Married Women," American Economic Review, American Economic Association, American Economic Association, vol. 75(2), pages 251-55, May.
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  4. 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, American Economic Association, vol. 87(4), pages 705-27, September.
  5. Alan G. Green & David A. Green, 1995. "Canadian Immigration Policy: The Effectiveness of the Point System and Other Instruments," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 28(4b), pages 1006-41, November.
  6. Christopher Worswick, 1999. "Credit Constraints and the Labour Supply of Immigrant Families in Canada," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 32(1), pages 152-170, February.
  7. Robert J. LaLonde & Robert H. Topel, 1992. "The Assimilation of Immigrants in the U. S. Labor Market," NBER Chapters, National Bureau of Economic Research, Inc, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 67-92 National Bureau of Economic Research, Inc.
  8. Antecol, Heather, 2000. "An examination of cross-country differences in the gender gap in labor force participation rates," Labour Economics, Elsevier, Elsevier, vol. 7(4), pages 409-426, July.
  9. Mark C. Regets & Harriet Orcutt Duleep, 1999. "Immigrants and Human-Capital Investment," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 186-191, May.
  10. Duleep, Harriet & Dowhan, Daniel J., 2002. "Revisiting the Family Investment Model with Longitudinal Data: The Earnings Growth of Immigrant and U.S.-Born Women," IZA Discussion Papers 568, Institute for the Study of Labor (IZA).
  11. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 3(4), pages 463-89, October.
  12. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 86(5), pages 897-921, October.
  13. Paul W. Miller, 1999. "Immigration Policy and Immigrant Quality: The Australian Points System," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 192-197, May.
  14. Bernhardt, Dan & Backus, David, 1990. "Borrowing Constraints, Occupational Choice, and Labor Supply," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 8(1), pages 145-73, January.
  15. 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.
  16. Deborah Cobb-Clark & Marie D. Connolly & Christopher Worswick, 2001. "The Job Search and Investments of Immigrant Families," CEPR Discussion Papers, Centre for Economic Policy Research, Research School of Economics, Australian National University 432, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  17. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, American Economic Association, vol. 77(4), pages 531-53, September.
  18. Christopher Worswick, 1996. "Immigrant Families in the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, University of Toronto Press, vol. 22(4), pages 378-396, December.
  19. Cobb-Clark, Deborah A. & Connolly, Marie D. & Worswick, Christopher, 2001. "The Job Search and Education Investments of Immigrant Families," IZA Discussion Papers 290, Institute for the Study of Labor (IZA).
  20. Worswick, C., 1996. "Immigrant Families in Canadian labour Market," Department of Economics - Working Papers Series, The University of Melbourne 504, The University of Melbourne.
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Citations

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Cited by:
  1. Chiswick, Barry R. & Miller, Paul W., 2013. "Negative and Positive Assimilation By Prices and By Quantities," IZA Discussion Papers 7389, Institute for the Study of Labor (IZA).
  2. Basilio, Leilanie & Bauer, Thomas K. & Sinning, Mathias, 2007. "Analyzing the Labor Market Activity of Immigrant Families in Germany," IZA Discussion Papers 2989, Institute for the Study of Labor (IZA).
  3. Hamori, Szilvia, 2009. "Employment convergence of immigrants in the EU: Differences across genders, regions of origin and destination," HWWI Research Papers, Hamburg Institute of International Economics (HWWI) 3-20, Hamburg Institute of International Economics (HWWI).
  4. Cohen Goldner, Sarit & Gotlibovski, Chemi & Kahana, Nava, 2006. "The Role of Marriage in Immigrants’ Human Capital Investment under Liquidity Constraints," IZA Discussion Papers 2308, Institute for the Study of Labor (IZA).
  5. Sarit Cohen-Goldner & Chemi Gotlibovski & Nava Kahana, 2009. "A Reevaluation Of the Role Of Family In Immigrants' Labor Market Activity;Evidence From a Comparison Of Single and Married Immigrants," Working Papers, Bar-Ilan University, Department of Economics 2009-13, Bar-Ilan University, Department of Economics.
  6. Seik Kim & Nalina Varanasi, . "Labor Supply of Married Women in Credit-Constrained Households: Theory and Evidence," Working Papers, University of Washington, Department of Economics UWEC-2010-01, University of Washington, Department of Economics.
  7. Cobb-Clark, Deborah A. & Stillman, Steven, 2008. "Emigration and the Age Profile of Retirement among Immigrants," IZA Discussion Papers 3874, Institute for the Study of Labor (IZA).
  8. Zaiceva, Anzelika, 2010. "East-West migration and gender: Is there a differential effect for migrant women?," Labour Economics, Elsevier, Elsevier, vol. 17(2), pages 443-454, April.
  9. Waka Cheung & Yew-Kwang Ng, 2011. "Gender Division of Labor and Alimony," Development Research Unit Working Paper Series, Monash University, Department of Economics 17-11, Monash University, Department of Economics.

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