Immigrant workers serving as nannies, caretakers and housecleaners may be helping to improve conditions for native workers. A new paper, co-authored by a Harvard professor and a recent PhD graduate, concludes that the growing trend of immigrant household laborers is having the effect of raising salaries for native low-skilled workers, and reducing wage inequalities between workers overall.
Kremer and Watt argue that as more immigrant women serve in household positions, more high-skilled native women are therefore available to join the labor market, driving down relative wages among high-skilled workers and reducing the disparity in wages between low- and high-skilled workers…
There may be other social benefits as well. "By allowing women to work more flexible hours, foreign private household workers may also reduce gender disparities among high-skilled natives and help eliminate the glass ceiling," the authors write.
That whole paper is here. And the linkage between labor markets, child care, and women in the workforce is hardly new. There is a reason that pressure for government-subsidized universal daycare has been largely muted in the United States. In a 1970 study on labor markets and social policy, GW's Kimberly Morgan argues:
Countries differ in the extent to which they subsidize early childhood care and education programs, reflecting, in part, the nature of the child care workforce. In liberal market economies such as the United States, a low-skill, low-wage workforce has enabled a private market of child care to develop, letting federal and state governments off the hook from having to subsidize these programs.
In the more coordinated market economies of Western Europe, by contrast, higher labor market regulations, wages, and rates of unionization raise the cost of labor and impede the growth of a private child care market. As a result, governments aiming to promote women's employment or assure the education of young children will feel pressed to provide extensive public subsidies for these services.