The Effects of Low-Skilled Female Immigration on the Native Female Labor Supply: Evidence from South Korea

Abstract

The present paper analyzes the impacts of immigrants who specialize in household works on the labor supply of native women. Based on standard labor supply model with home production, we analyze which group will work more or less in response to an inflow of low-skilled female immigrants. We identify the effects using a recent surge of Korean-Chinese immigrants (Joseon-jok) in South Korean labor markets and a shift-share methodology modified by Barone and Mocetti (2011). Korean-Chinese immigrants are the majority group among foreign-born domestic workers in South Korea. Empirical results confirm the models predictions. A rising share of Korean-Chinese immigrants in local labor markets is associated with a greater maternal labor supply of the high-skilled and a lower labor supply of the low-skilled women. The negative effects on the working hours of low-skilled women are novel in literature and it can be explained by the relative homogeneity between immigrants and natives compared to the samples in previous studies.