A family affair: the labor market experience of immigrant spouses *.(Statistical Data Included)

Objective. This research examines the role of the family in the immigrant settlement process by assessing the labor supply behavior of immigrant spouses. Methods. We make use of a unique data set--the Longitudinal Survey of Immigrants to Australia (LSIA), which provides detailed demographic, human capital, and labor market information for both principal applicants and their spouses. Results. Family circumstances such as the presence of young children, partners' hours of work, and family income are important determinants of labor supply. Similarly, human capital, particularly English language ability, is closely related to hours worked, and there is some evidence that spouses' employment is related to the visa category of their partners. Conclusions. Since immigration is not a solitary undertaking, evaluations of immigration policy and the economic status of immigrants that ignore interactions between family members may be inaccurate in their representation of the financial health and economic contributions of immigrants.

**********

Immigration is an important economic and demographic phenomenon in many industrialized nations. Given this, it is not surprising that studies of the way that immigrants adapt to and influence labor market opportunities in the host country have become increasingly important. Most early studies focused on male immigrants: in particular, male labor force participation, wage differentials between foreign- and native-born men, and the unemployment experience of male migrants. Recognizing that immigration is not an exclusively male phenomenon, researchers then turned to the labor market behavior of migrant women (Chiswick, 1980; Long, 1980; Reimers, 1985; MacPherson and Stewart, 1989; Beach and Worswick, 1993; Schoeni, 1998). Recently, studies have begun to explicitly recognize that migration is also not a solitary undertaking and that the "migrating unit" often includes a husband, wife, and children (Duleep and Sanders, 1993; Worswick, 1996; Baker and Benjamin, 1997).

The challenge to understanding the role of families in the immigration process, however, is that although labor force surveys and censuses may identify the foreign born, they typically provide only limited information about the migrating unit or the immigration process itself. Principal applicants are usually indistinguishable from accompanying family members, and information about an immigrant's visa status is often lacking. In addition, standard data sets typically identify family units at the time of data collection, not at the time of migration. Thus, many interesting questions regarding the role of the family unit itself in facilitating labor market adjustment remain unanswered.

The objective of this research is to examine the early labor market experience of immigrant spouses. To this end, we take advantage of a unique Australian data set. The Longitudinal Survey of Immigrants to Australia (LSIA) provides detailed demographic, human capital, and labor market information for both principal applicants and their spouses over the first 18 months of the settlement process. This allows us to look at the decision to work by immigrant spouses while controlling for their partners' labor supply decisions. In addition, information on visa category allows us to test whether the spouses of immigrants who are selected under different policy regimes have different labor market outcomes.

Our goal is to add to the growing literature that focuses on the role of the family in the immigration and assimilation process by documenting the contribution of immigrant women to the economic status of their families. At the same time, we have a unique opportunity to explicitly analyze the behavior of men who migrate as spouses. Although previous research has assessed the labor market behavior of principal applicants in Australia (Cobb-Clark, 2000; Cobb-Clark and Chapman, 1999), nothing is yet known about the employment decisions of their spouses. Finally, we contribute to the literature that assesses the importance of selection criteria in determining labor market outcomes for immigrants by considering whether the spouses of immigrants selected on the basis of labor market skills have different labor supply behavior shortly after migration than spouses of family reunification and humanitarian migrants.

Understanding the Labor Supply Decisions of Immigrant Spouses

Although conceptually, immigrant "spouses" can be husbands as well as wives, standard data sets often do not separately identify primary migrants and spouses. Therefore, researchers interested in spouses or secondary workers usually study the labor market behavior of married women. These studies clearly demonstrate that women's decisions about labor market work are intricately bound up with their individual family circumstances, in particular, the presence of children, spouses, and other adults living in the home (MacPherson and Stewart, 1989; Schoeni, 1998; Worswick, 1996; Duleep and Sanders, 1993).

It is useful to evaluate the labor supply behavior of immigrant women within a model of family or household behavior. Mincer (1978) was among the first to explicitly model the migration decision in the family context. He postulated that some spouses might in fact be "tied movers" who migrate because the overall returns to migration are positive for the family even though their own individual returns are negative. Tied movers would be expected to be less likely to participate in the labor market than individuals who migrated independently. In fact, there is some evidence that women who were married before migration--and are therefore more likely to be tied migrants--have lower participation rates (MacPherson and Stewart, 1989), although this is not true for all national-origin groups (Duleep and Sanders, 1993).

The family investment model provides another important framework for conceptualizing the work decisions of immigrant spouses. First proposed by Long (1980), the family investment hypothesis speculates that because of credit constraints, immigrant families who need to invest in host country-specific human capital must finance that investment themselves. As a result, immigrant wives (generally secondary workers) undertake those labor market activities that facilitate their husbands' investments in host country-specific human capital. The family investment hypothesis predicts, therefore, that immigrant wives are more likely to work, work longer hours, and forego their own investment in human capital by taking better-paying but dead-end jobs. Empirical tests of the family investment hypothesis have produced somewhat mixed results. As expected, women married to foreign-born men work more upon arrival, have flatter wage profiles, and are less likely to invest in schooling relative to immigrant women married to native-born men (Baker and Benjamin, 1997). On the other hand, Worswick (1996) concludes that the relative wage growth of immigrant women exceeds the relative wage growth of immigrant men, suggesting that relative to their native-born counterparts, immigrant …