Low-Skilled Immigration and the Labor Supply of Highly Skilled Women

American Economic Journal Applied Economics (Impact Factor: 2.76). 07/2011; 3(3):88-123. DOI: 10.1257/app.3.3.88
Source: RePEc

ABSTRACT Low-skilled immigrants represent a significant fraction of employment in services that are close substitutes of household production. This paper studies whether the increased supply of low-skilled immigrants has led high-skilled women, who have the highest opportunity cost of time, to change their time-use decisions. Exploiting cross-city variation in immigrant concentration, we find that low-skilled immigration increases average hours of market work and the probability of working long hours of women at the top quartile of the wage distribution. Consistently, we find that women in this group decrease the time they spend in household work and increase expenditures on housekeeping services. (JEL J16, J22, J24, J61)

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May 22, 2014