A Reevaluation of the Role of Family in Immigrants' Labor Market Activity: Evidence from a Comparison of Single and Married Immigrants

Sarit Cohen Goldner (), Chemi Gotlibovski () and Nava Kahana ()
Additional contact information
Sarit Cohen Goldner: Bar-Ilan University
Chemi Gotlibovski: Academic College of Tel-Aviv Yaffo
Nava Kahana: Bar-Ilan University
Authors registered in the RePEc Author Service: Sarit Cohen-Goldner ()

No 4185, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: family investment model; labor supply (search for similar items in EconPapers)
JEL-codes: J22 J61 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2009-05
New Economics Papers: this item is included in nep-lab and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: A Reevaluation Of the Role Of Family In Immigrants' Labor Market Activity;Evidence From a Comparison Of Single and Married Immigrants (2009)
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