With a Little Help from Abroad: The Effect of Low-Skilled Immigration on the Female Labor Supply

38 Pages Posted: 29 Oct 2010

See all articles by Guglielmo Barone

Guglielmo Barone

University of Bologna - Department of Economics

Sauro Mocetti

Bank of Italy

Date Written: July 30, 2010

Abstract

In this paper we examine whether and how the inflow of female immigrants who “specialize” in household production affects the labor supply of Italian women. To identify the causal effect, we exploit the family reunification motive and the network effects - i.e. the tendency of newly arriving female immigrants to settle in places where males of the same country already live - as an instrument for the geographical distribution of female foreign workers. We find that the higher the number of immigrants who provide household services the more time native Italian women spend at work (intensive margin) without affecting their labor force participation (extensive margin). The impact is concentrated on the highly skilled women whose time has a higher opportunity cost. These results also hold after a battery of robustness checks. Some further evidence confirms that the impact passes through the substitution in household work rather than complementarities in the production sector. Finally, we show that immigration arises as a substitute to publicly provided welfare services, although this raises concerns about the fairness and the sustainability of this private and informal welfare model.

Keywords: immigration, female labor supply, household production

JEL Classification: J22, J61

Suggested Citation

Barone, Guglielmo and Mocetti, Sauro, With a Little Help from Abroad: The Effect of Low-Skilled Immigration on the Female Labor Supply (July 30, 2010). Bank of Italy Temi di Discussione (Working Paper) No. 766, Available at SSRN: https://ssrn.com/abstract=1699628 or http://dx.doi.org/10.2139/ssrn.1699628

Guglielmo Barone (Contact Author)

University of Bologna - Department of Economics ( email )

Bologna
Italy

Sauro Mocetti

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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