Natives and migrants in home production: the case of Germany

Abstract

In this paper, we assess the impact of international migration and the induced homecare service labor supply shock on fertility decisions and the labor supply of native females in Germany. Specifically, we consider the individual data of native women from the German Socio-Economic Panel and merge them with data on the share of female immigrants and other regional labor market characteristics. We provide evidence that areas with a high share of female immigrants are more likely to provide a larger amount of services related to household care and lower prices for such services. By controlling for unobserved individual characteristics, we find that an increase at the local level in the share of female immigrants positively affects the probability of having a child, induces women to work longer hours (intensive margin of labor supply) and reduces the number of hours they spend performing family duties (intensive margin of home production). The negative change in household working hours supports the validity of our results. These effects become stronger for (medium-) skilled women.