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Revisiting the Family Investment Hypothesis

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Author Info
Deborah Cobb-Clark
Thomas F. Crossley

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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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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
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Handle: RePEc:mcm:deptwp:2002-04

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Find related papers by JEL classification:
D10 - Microeconomics - - Household Behavior - - - General
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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. [Downloadable!] (restricted)
  2. Robert J. LaLonde & Robert H. Topel, 1990. "The Assimilation of Immigrants in the U.S. Labor Markets," NBER Working Papers 3573, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. 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, vol. 19(1), pages 36-53, March. [Downloadable!] (restricted)
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  4. Harriet Orcutt Duleep & Mark C. Regets, 1999. "Immigrants and Human-Capital Investment," American Economic Review, American Economic Association, vol. 89(2), pages 186-191, May. [Downloadable!] (restricted)
  5. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October. [Downloadable!] (restricted)
  6. Antecol, Heather, 2000. "An examination of cross-country differences in the gender gap in labor force participation rates," Labour Economics, Elsevier, vol. 7(4), pages 409-426, July. [Downloadable!] (restricted)
  7. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October. [Downloadable!] (restricted)
  8. Reimers, Cordelia W, 1985. "Cultural Differences in Labor Force Participation among Married Women," American Economic Review, American Economic Association, vol. 75(2), pages 251-55, May. [Downloadable!] (restricted)
  9. Bernhardt, Dan & Backus, David, 1990. "Borrowing Constraints, Occupational Choice, and Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 145-73, January. [Downloadable!] (restricted)
  10. Christopher Worswick, 1996. "Immigrant Families in the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 378-396, December. [Downloadable!] (restricted)
  11. 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, vol. 28(4b), pages 1006-41, November.
  12. 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. [Downloadable!] (restricted)
  13. Harriet Duleep & Seth Sanders, 1993. "The decision to work by married immigrant women," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 46(4), pages 677-690, July.
  14. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  15. 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). [Downloadable!]
  16. Paul W. Miller, 1999. "Immigration Policy and Immigrant Quality: The Australian Points System," American Economic Review, American Economic Association, vol. 89(2), pages 192-197, May. [Downloadable!] (restricted)
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  1. Cohen-Goldner, Sarit & Gotlibovski, Chemi & Kahana, Nava, 2009. "A Reevaluation of the Role of Family in Immigrants' Labor Market Activity: Evidence from a Comparison of Single and Married Immigrants," IZA Discussion Papers 4185, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Leilanie Basilio & Thomas K. Bauer & Mathias Sinning, 2007. "Analyzing the Labor Market Activity of Immigrant Families in Germany," IZA Discussion Papers 2989, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Sarit Cohen-Goldner & Chemi Gotlibovski & Nava Kahana, 2009. "The role of marriage in immigrants’ human capital investment under liquidity constraints," Journal of Population Economics, Springer, vol. 22(4), pages 983-1003, October. [Downloadable!] (restricted)
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  4. Cobb-Clark, Deborah & Stillman, Steven, 2008. "Emigration and the Age Profile of Retirement among Immigrants," IZA Discussion Papers 3874, Institute for the Study of Labor (IZA). [Downloadable!]
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