Credit constraints and the labour supply of immigrant families in Canada

The hours of work decisions in immigrant and non-immigrant families are com pared using an intertemporal labour supply model estimated over data from t he 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 resp onds by working longer hours so as to support family consumption and her hu sband's labour market adjustment. The empirical evidence in general support s the hypothesis, since credit constraints are found to significantly disto rt the labour supply decisions of recently arrived immigrant families.