In credit-constrained households, some family members who would otherwise not work participate in the labor market. This particular supply of labor, however, is expected to decrease when their families overcome credit constraints. To examine this family investment hypothesis, we develop a test which exploits the dynamic features of the labor supply of married foreign-born women in the United States. Empirical findings, based on the matched March Current Population Survey, are consistent with the hypothesis. This paper also finds that previous results which refute the hypothesis are reversed when the sample is confined to women working in low-skill jobs.
Bibliographical noteFunding Information:
The authors have benefited from helpful comments made by Yoram Barzel, Delia Furtado, Chirok Han, Lawrence Kahn, Shelly Lundberg, Claus Pörtner, two anonymous reviewers, the Editor, and seminar participants at the annual meeting of the European Society for Population Economics, the annual meeting of the Population Association of America, the Asian meeting of the Econometric Society, University of Seoul, University of Zürich, University of Washington, and the UW Center for Statistics and the Social Sciences. This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2016S1A5A8017870).
© 2019 Elsevier B.V.
- Family investment hypothesis
- Female labor supply
- Occupation mobility
ASJC Scopus subject areas
- Economics and Econometrics