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Maids and School Teachers: Low Skill Migration and High Skill Labor Supply

Over the 40 years the pattern of migration has changed significantly with an increase in the share of female migrants, and especially low skill female migrants. These low skilled women migrants often work in the domestic service sector, a close substitute for household work. This paper analyzes how low skill rural-urban migration in Brazil from 1986 to 2000 lead to an increase in the labor supply of high skill women living in urban areas. In our model we show how large inflows of low skill women migrants decrease the relative price of domestic services. The largest beneficiaries of this trend are high skill women, who respond to the decrease in the cost of domestic services by joining the labor force and working more hours. We use Census data from Brazil from 1991 and 2000 to test this hypothesis. Using weather shocks in rural areas, and historical patterns of migrations, we are able to build an exogenous migration shock by skill to cities. Using this as an instrument for the price of domestic services and local wages we find that a 10% decrease in the wage of domestic workers increases the labor participation of high skill women by 3%.

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File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper160.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p160.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p160
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  1. Giovanni Peri, 2007. "Immigrants' Complementarities and Native Wages: Evidence from California," NBER Working Papers 12956, National Bureau of Economic Research, Inc.
  2. Andréa Zaitune Curi & Naércio Aquino Menezes-Filho, 2004. "Os Determinantes Das Transições Ocupacionais No Mercado De Trabalho Brasileiro," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] 141, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  3. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  4. da Mata, D. & Deichmann, U. & Henderson, J.V. & Lall, S.V. & Wang, H.G., 2007. "Determinants of city growth in Brazil," Journal of Urban Economics, Elsevier, vol. 62(2), pages 252-272, September.
  5. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, MIT Press, vol. 120(3), pages 963-1002, August.
  6. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  7. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 20-54, January.
  8. Patricia Cort�s & Jos� Tessada, 2011. "Low-Skilled Immigration and the Labor Supply of Highly Skilled Women," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 88-123, July.
  9. George J. Borjas, 2006. "Native Internal Migration and the Labor Market Impact of Immigration," Journal of Human Resources, University of Wisconsin Press, vol. 41(2).
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