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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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  • Cohen Goldner, Sarit

    () (Bar-Ilan University)

  • Gotlibovski, Chemi

    () (Academic College of Tel-Aviv Yaffo)

  • Kahana, Nava

    () (Bar-Ilan University)

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.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp4185
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    References listed on IDEAS

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    1. Christopher Worswick, 1996. "Immigrant Families in the Canadian Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 378-396, December.
    2. Harriet Orcutt Duleep & Seth Sanders, 1993. "The Decision to Work by Married Immigrant Women," ILR Review, Cornell University, ILR School, vol. 46(4), pages 677-690, July.
    3. Cobb-Clark, Deborah & Crossley, Thomas F., 2004. "Revisiting the family investment hypothesis," Labour Economics, Elsevier, vol. 11(3), pages 373-393, June.
    4. 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.
    5. 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 705-727, September.
    6. 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.
    7. 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.
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    Cited by:

    1. Adserà, Alícia & Ferrer, Ana, 2016. "Occupational skills and labour market progression of married immigrant women in Canada," Labour Economics, Elsevier, vol. 39(C), pages 88-98.
    2. Seik Kim & Nalina Varanasi, "undated". "Labor Supply of Married Women in Credit-Constrained Households: Theory and Evidence," Working Papers UWEC-2010-01, University of Washington, Department of Economics.

    More about this item

    Keywords

    family investment model; labor supply;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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