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The labour market adjustment of immigrant families

University of British Columbia

In this thesis, I analyze the labour market adjustment of immigrant families to Canada. The focus of the analysis is on measuring the effects of credit constraints on the labour market behaviour of immigrant family members. Results from the estimation of reduced-form wage, hours and weeks equations indicate that immigrant women face lower wages than similar non-immigrant women, and at the same time work longer hours. Over the 1980s, immigrant women had higher growth in wages and the same growth in hours as non-immigrant women. This could be explained by the immigrant women’s hours being higher in 1980 due to credit constraints, and the immigrant family not needing to borrow in 1990 due to the high wage growth over the decade. While credit constraints can explain the observed differences in labour supply, an alternative explanation is that family preferences towards labour supply differ between immigrant and non-immigrant families. A structural labour supply model is developed in which families choose hours of work for the husband and wife, and family consumption in each time period allowing for credit constraints and uncertainty. The results of the estimation indicate that it is differences in family preferences over labour supply, and not credit constraints, which lead to the observed differences in labour supply between immigrant and non-immigrant families. Immigrant families have a lower disutility to the wife’s labour supply than non-immigrant families. The results do not support the hypothesis that immigrant families are more likely to be credit constrained than non-immigrant families. Labour supplies in young families appear to be affected by credit constraints; however, this effect is no larger in immigrant families than in non-immigrant families.

Thesis/Dissertation

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2009-04-22

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http://hdl.handle.net/2429/7464

Economics

University of British Columbia

UBCV

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