Fertility and the Labor Force Participation of American Women: The Role of Low-Skilled Immigrant Labor

Delia Furtado, University of Connecticut
Heinrich Hock, Florida State University

The degree of female "role incompatibility" between market work and childrearing in industrialized nations has been declining since the 1960s, particularly so in the United States. We suggest that a potential explanation for this phenomenon is the continuing influx of low-skilled immigration. The resulting increased pool of cheap labor, particularly in the household goods and services sector, lowers the opportunity cost of fertility and work for American women. Using US Census microdata, we show that low-skilled immigration has a positive causal effect on fertility, but a negative net effect on labor force participation when considering each decision separately. Since women temporarily exit the labor force to bear children, this might dominate any positive gross effect of low-skilled immigration on labor supply. Preliminary results from a simultaneous-choice model indicate that higher rates of low-skilled immigration indeed increase the marginal propensities of American women to both work and bear children.