The family investment hypothesis predicts that credit-constrained immigrant families adopt a strategy for financing post-migration human capital investment in which the “primary worker” engages in investment activities and the other partner undertakes activities that finance consumption. Empirical tests of this hypothesis have assumed that the primary worker is the male partner. Many immigrants to Australia are admitted through a “points test” which assigns points for productive skills. Once a principal applicant receives a visa, dependent family members are automatically granted visas as well. Thus, we re-evaluate the family investment hypothesis using principal applicant status to identify primary and secondary workers.
Authors
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Deborah Ann Cobb-Clark
Journal article details
- DOI
- 10.1016/j.labeco.2003.05.002
- Publisher
- Elsevier
- JEL
- D10,J22,J61
- Issue
- June 2004
Suggested citation
Cobb-Clark, D and Crossley, T. (2004). 'Revisiting the family investment hypothesis' (2004)
More from IFS
Understand this issue
Council funding is a numbers game in which everybody is losing
13 May 2024
Empty defence spending promises are a shot in the dark
29 April 2024
Public investment: what you need to know
25 April 2024
Policy analysis
The past and future of UK health spending
14 May 2024
NHS spending has risen less quickly than was planned at the last election, despite the pandemic and record waiting lists
14 May 2024
Recent trends in and the outlook for health-related benefits
19 April 2024
Academic research
The employment and distributional impacts of nationwide minimum wage changes
10 April 2024
Willingness to pay for improved public education and public healthcare systems: the role of income mobility prospects
14 March 2024
Unfunded mandates and taxation
14 March 2024