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

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  • Tiago Freire

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Abstract

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%.

Suggested Citation

  • Tiago Freire, 2011. "Maids and School Teachers: Low Skill Migration and High Skill Labor Supply," ERSA conference papers ersa10p160, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa10p160
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper160.pdf
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    1. 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.
    2. Patricia Cortés & José 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.
    3. 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.
    4. Erzo F. P. Luttmer, 2005. "Neighbors as Negatives: Relative Earnings and Well-Being," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 963-1002.
    5. 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).
    6. Giovanni Peri, 2007. "Immigrants' Complementarities and Native Wages: Evidence from California," NBER Working Papers 12956, National Bureau of Economic Research, Inc.
    7. 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.
    8. 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.
    9. 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 32nd Brazilian Economics Meeting] 141, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    10. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
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    Cited by:

    1. Tiago Freire, 2016. "How The 1978 Foreign Domestic Workers Law Increased The Labor Supply Of Singaporean Women," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(05), pages 1-19, December.
    2. Halldén, Karin & Stenberg, Anders, 2013. "The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform," Working Paper Series 4/2013, Stockholm University, Swedish Institute for Social Research.
    3. Freire, Tiago, 2013. "How the 1978 changes to the foreign domestic workers law in Singapore increased the female labour supply," MPRA Paper 44448, University Library of Munich, Germany.
    4. repec:wsi:serxxx:v:62:y:2017:i:05:n:s0217590815500745 is not listed on IDEAS

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