Credit constraints and the labour supply of immigrant families in Canada
Canadian Journal of Economics , Volume 32 - Issue 1 p. 152- 170
The hours of work decisions in immigrant and non-immigrant families are compared using an intertemporal labour supply model estimated over data from the 1981 and 1991 Census of Canada surveys. The family investment hypothesis is evaluated. The hypothesis states that the immigrant family is unable to borrow in the first years after migration and that the immigrant wife responds by working longer hours so as to support family consumption and her husband's labour market adjustment. The empirical evidence in general supports the hypothesis, since credit constraints are found to significantly distort the labour supply decisions of recently arrived immigrant families.