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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.

Suggested Citation

  • Deborah Cobb-Clark & Thomas F. Crossley, 2002. "Revisiting the Family Investment Hypothesis," Department of Economics Working Papers 2002-04, McMaster University.
    • Handle: RePEc:mcm:deptwp:2002-04
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    References listed on IDEAS

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    Cited by:

    1. Ana Ferrer, 2015. "Are married immigrant women secondary workers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 119-119, January.
    2. 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;European Society for Population Economics, vol. 22(4), pages 983-1003, October.
    3. Waka Cheung & Yew-Kwang Ng, 2011. "Gender Division of Labor and Alimony," Monash Economics Working Papers 17-11, Monash University, Department of Economics.
    4. Basilio, Leilanie & Bauer, Thomas K. & Sinning, Mathias, 2009. "Analyzing the labor market activity of immigrant families in Germany," Labour Economics, Elsevier, vol. 16(5), pages 510-520, October.
    5. Duleep, Harriet & Dowhan, Dan & Liu, Xingfei, 2023. "A Historical Note on the Assimilation Rates of Foreign-Born Women in the U.S," GLO Discussion Paper Series 1221, Global Labor Organization (GLO).
    6. Giannakopoulos, Nicholas, 2015. "The added worker effect of married women in Greece during the Great Depression," MPRA Paper 66298, University Library of Munich, Germany.
    7. David A. Green & Christopher Worswick, 2017. "Canadian economics research on immigration through the lens of theories of justice," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1262-1303, December.
    8. Rupa Banerjee & Mai B. Phan, 2015. "Do Tied Movers Get Tied Down? The Occupational Displacement of Dependent Applicant Immigrants in Canada," Journal of International Migration and Integration, Springer, vol. 16(2), pages 333-353, May.
    9. Kim, Seik & Varanasi, Nalina, 2019. "Labor supply of married foreign-born women in credit-constrained households," Economic Modelling, Elsevier, vol. 81(C), pages 411-421.
    10. Spencer Bastani & Lisa Dickmanns & Thomas Giebe & Oliver Gürtler, 2022. "Competition for Promotion Can Induce Household Specialization Between Equally Competitive Spouses," ECONtribute Discussion Papers Series 155, University of Bonn and University of Cologne, Germany.
    11. Zaiceva, Anzelika, 2010. "East-West migration and gender: Is there a differential effect for migrant women?," Labour Economics, Elsevier, vol. 17(2), pages 443-454, April.
    12. Deborah Cobb-Clark & Steven Stillman, 2008. "Emigration and the Age Profile of Retirement Among Immigrants," RF Berlin - CReAM Discussion Paper Series 0815, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    13. 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 of Labor Economics (IZA).
    14. Yunsun Huh, 2018. "Family typology and gender empowerment: the labour market performance of married immigrants," Journal of Population Research, Springer, vol. 35(3), pages 237-288, September.
    15. Cahit Guven & Lan Anh Tong & Mutlu Yuksel, 2020. "Australia's Immigration Selection System and Labour Market Outcomes in a Family Context: Evidence from Administrative Data," The Economic Record, The Economic Society of Australia, vol. 96(S1), pages 50-77, June.
    16. 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.
    17. Poeschel, Friedrich, 2020. "Out there on your own: Absence of the spouse and migrants' integration outcomes," MPRA Paper 98993, University Library of Munich, Germany.
    18. Hamori, Szilvia, 2009. "Employment convergence of immigrants in the EU: Differences across genders, regions of origin and destination," HWWI Research Papers 3-20, Hamburg Institute of International Economics (HWWI).
    19. 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.
    20. Barry R. Chiswick & Paul W. Miller, 2015. "Negative and Positive Assimilation by Prices and by Quantities," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 18(1), pages 5-28.

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    More about this item

    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, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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