社福外籍勞工與台灣已婚女性勞動市場參與決策之關聯性 - 政大學術集成

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(1)國立政治大學經濟研究所碩士學位論文. 社福外籍勞工與台灣已婚女性勞動市場參與決策之關聯性政治大. Foreign Domestic 立 Workers and Married Native. ‧ 國. 學. Women’s Labor Market Outcomes in Taiwan. ‧. n. er. io. sit. y. Nat. al. Ch. i n U. v. engchi 指導教授：陳鎮洲博士研究生：陳以柔. 中華民國一百零二年十二月.

(2) Abstract. The goal of this paper is to investigate the relationship between foreign domestic workers and married native women’s labor market outcomes in Taiwan. The study primarily draws on data from the Taiwan Manpower Utilization Survey (MUS), applying probit and tobit models, in order to conduct the empirical analysis. The results show that the correlation between foreign domestic workers and married native women’s labor market outcomes, including female labor force participation and female working hours, is positive, and statistically significant. The results of this research are consistent with the theoretical model, and may provide potential lessons for related policies in Taiwan.. 政治大. Keywords: Foreign domestic workers, female labor force participation, female working. 立. hours.. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i. i n U. v.

(3) Table of Contents Abstract ......................................................................................... ⅰ Table of Contents. .......................................................................... ⅱ List of Figures ................................................................................. ⅲ List of Tables .................................................................................. ⅳ Ⅰ. Introduction ................................................................................ 1. 治政 Ⅱ. Background. ................................................................................ 4 大立 ‧ 國. 學. Ⅲ. Theoretical Framework ......................................................... 10. ‧. Ⅳ. Empirical Analysis and Results ............................................ 15. er. io. sit. y. Nat. A. Empirical models and data ..................................................... 15 B. Results ....................................................................................... 24. n. al. i n U. C. v. hengchi Ⅴ. Conclusion ............................................................................... 29 References ....................................................................................... 31. ii.

(4) List of Figures Fig 2.1 Education Level of Female Population Aged 15 and Above in Taiwan ................. 6 Fig 2.2 Women's Labor Force Participation for Different Education Levels In Taiwan ...... 6 Fig 2.3 Female Labor Force Participation Rate in Taiwan .................................................. 7 Fig 2.4 Percentages of People over Age 65 in Taiwan ........................................................ 7 Fig 2.5 Populations of Foreign Domestic Workers in Taiwan .............................................. 7 Fig 3.1 Effect of domestic worker program on time-allocation problem of women who are not in the labor force .............................................................................................. 13. 政治大 in the labor force .................................................................................................... 14 立. Fig 3.2 Effect of domestic worker program on time-allocation problem of women who are. ‧ 國. 學. Fig 4.1 Share of Foreign Domestic Workers on the Total Local Female Population for Counties and Cities in Taiwan ............................................................................... 23. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. iii. i n U. v.

(5) List of Tables Table 4.1.1 Definitions of All the Variables ..................................................................... 21 Table 4.1.2 Descriptive Statistics ........................................................................................ 22 Table 4.2.1 Foreign Domestic Workers and Labor Force Participation of Local Women 27 Table 4.2.2 Foreign Domestic Workers and Working Hours of Local Women ................ 28. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. iv. i n U. v.

(6) I. Introduction In today’s society, dual-income families are common in Taiwan due to both the higher education levels of women and the desire among citizens to pursue a higher quality of life. However, traditional social norms, such as doing housework and taking care of family members, continue to constrain female labor force participation in Taiwan. In the past twenty years, the government has started opening the door for households to hire foreign domestic workers to take care of children, elders and family members who need 24 hour care. The cost of hiring a foreign domestic worker is much lower than hiring. 政治大 able to shift their focus from domestic chores to market work. Given this, it is interesting to 立 a native domestic worker. As a result, women who are able to afford these services may be. ‧ 國. 學. explore the relationship between foreign domestic workers and women’s labor market outcomes in Taiwan, in order to see whether the foreign domestic worker policy has a. ‧. substantial impact.. sit. y. Nat. Women’s labor supply is a popular topic that has been analyzed extensively by. io. er. economists in Taiwan. Factors that determine women’s labor decisions, like numbers of young children, husband’s income and education level, have been discussed in the light of. al. n. v i n Ctoha deficiency of individual-level empirical evidence. However, due data related to foreign engchi U domestic workers, the relationship between foreign domestic workers and native women’s employment has received little attention in Taiwan. It is surprising to note that empirical research on the impact of foreign domestic workers or immigrants who provide household services on the female labor supply in developed countries has only begun to be explored in recent years. After Cortes and Tessada (2011) who focused particularly on the impact that low-skilled immigrants have on the female labor supply in the United States in 2011, similar research has started to pop up focusing on different countries. To my knowledge, most of the studies show that the impact 1.

(7) of foreign domestic workers or immigrants who provide household services on the female labor force decision is both positive and significant, including cases in the United States, Spain, Italy and Hong Kong. Given that the issue is a popular topic in the field of labor economics, it is worth exploring in Taiwan. This study assumes that native women would substitute their time spent on household work with the purchase of services provided by foreign domestic workers. I follow Barone and Mocetti (2011) in exploiting a variable that uses the share of foreign domestic workers on native women in every county and city to represent the effect of foreign domestic workers, and apply probit and tobit models in order to conduct the empirical research.. 政治大. Although estimating the impact of foreign domestic workers with an OLS method might. 立. lead to biased results, this study has not found a proper IV in order to avoid the. ‧ 國. 學. endogenous problem and reverse causality. The study finds that the correlation between. ‧. foreign domestic workers and female labor force participation is positive, and that the correlation between foreign domestic workers and the working hours of native women is. y. Nat. io. sit. also positive. Both results are statistically significant at a 1% level.. n. al. er. The contribution made by the study lies in showing the connection between foreign. i n U. v. domestic workers and married women’s labor market outcomes in the Taiwanese context,. Ch. engchi. providing insight into the effect of the foreign domestic worker policy on native women’s labor force decisions. Moreover, the results of this study may provide lessons for related policies in Taiwan. For example, it seems that native women are quite dependent on the service provided by foreign domestic workers; however, with the economic growth in Southeast Asia, the Taiwanese working environment may not be so attractive to foreign domestic workers in the future. Given this, the government might attempt to improve the working environment in Taiwan, by, for example, instituting clear overtime working regulations in an attempt to. 2.

(8) maintain the services provided by foreign domestic workers in the future.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 3. i n U. v.

(9) II. Background With the rise of education levels in Taiwan, native women have greater opportunities to gain a higher education (Figure 2.1). Figure 2.2 shows the significantly positive relationship between level of education and women’s labor force participation. Therefore, as we see in Figure 2.3, the percentage of women who are willing to join the labor force has been increasing over the past 30 years in Taiwan. However, social norms in Taiwanese society continue to prevent native women from joining the labor force by placing the burden of taking care of family members, the elderly. 政治大. and children on females. In addition, Taiwan’s aging population is a serious problem. 立. (Figure 2.4).. ‧ 國. 學. In 1992 the government introduced the “foreign caretaker scheme” and, the “foreign domestic helper scheme” order to lessen the burden of attending to the old and young that. ‧. is placed on women (蔡幸嶧,2006; 劉秋英, 2003). Taiwanese households can apply for. sit. y. Nat. foreign domestic workers through both of these channels. The “foreign caretaker scheme”. io. er. applies to households that have seriously ill patients who cannot take care of themselves.. al. These patients must prove, by supplying medical documents, that they need 24 hour care.. n. v i n C h applies to households The “foreign domestic helper scheme” that contain elderly people engchi U and children. One qualifies to apply for this scheme based on “points” that are calculated. by the number and age of elders and children in a household. This paper does not distinguish between foreign domestic caretakers and foreign domestic helpers, because people in Taiwan often do not precisely distinguish between the two types of workers. People apply for foreign domestic caretakers and ask them to do the job of a foreign domestic helper, and vice versa (Cortes and Pan, 2013). Given this, in this paper, “foreign domestic caretakers” and “foreign domestic helpers” are collectively called “foreign domestic workers”. From the data issued by the Bureau of Employment and Vocational 4.

(10) Training, we can see that the number of foreign domestic workers has increased continuously from 2001 to 2012 (Figure 2.5). While these programs have been in place in Taiwan for twenty years, it has not yet been confirmed that they raise women’s labor force participation rate (王素灣, 2009). Because of a lack of micro data related to foreign domestic workers, few studies have been conducted on related topics in Taiwan. 成之約 et al.(2002) conducted a survey and interviewed the employers of foreign worker over the phone. Only women were invited to participate in these phone interviews, and the total sample was 257. The results showed that foreign domestic workers only had a. 政治大. small impact on women who did not originally participate in the labor market. However,. 立. the effect of foreign domestic workers on preventing female employers from quitting or. ‧ 國. 學. changing their jobs was significant.. 賴意婷(2011) investigated the effects of the expenditure of domestic workers and. ‧. population aging on women’s employment in Taiwan. She originally attempted to discuss. y. Nat. io. sit. the effect of foreign domestic workers on native women’s employment. However, given. n. al. er. the lack of micro data related to foreign domestic workers, the article used the expenditure. Ch. i n U. v. of domestic workers as a substitute for the variable of foreign domestic workers. The. engchi. results showed a significantly positive effect of the expenditure of domestic workers on women’s employment in Taiwan. The research also found that living with elderly people between the ages of 65 and 75 had a positive effect on women’s employment, while living with elderly people aged 75 or older had a negative effect on women’s employment. However, the effect only had a 10% significant level in relation to the first variable and was not statistically significant in relation to the second variable.. 5.

(11) College or Above. High School. Junior High or Below. Population (%) 70 60 50 40 30 20 10 0. Year. Figure 2.1 Education Level of Female Population Aged 15 and Above in Taiwan. 政治大. Source: Ministry of education, Department of Statistics. College or Above. LFP (%). 30. 0. y. al. n. 10. io. 20. Nat. 40. sit. 50. Junior High or Below. ‧. 60. High School. er. 70. 學. ‧ 國. 立. Ch. engchi. i n U. v. Year. Figure 2.2 Women's Labor Force Participation for Different Education Levels In Taiwan Source: Taiwan’s Directorate-General of Budget, Accounting, and Statistics (DGBAS). 6.

(12) LFP rate (%) 60 50 40 30 20 10 0. Year. Figure 2.3 Female Labor Force Participation Rate in Taiwan Source: Taiwan’s Directorate-General of Budget, Accounting, and Statistics (DGBAS). Population (%). 政治大. 12. 立. 10 8. 4 2 0. ‧. ‧ 國. 學. 6. Nat. sit. y. Year. io. er. Figure 2.4 Percentages of People over Age 65 in Taiwan Source: Department of Household Registration, M.O.I. n. al. Population (%). Ch. engchi. i n U. v. 250000 200000 150000 100000 50000 0 2012. 2011. 2010. 2009. 2008. 2007. 2006. 2005. 2004. 2003. 2002. 2001. 2000. 1999. 1998. 1997. 1996. 1995. 1994. 1993. 1992. Year. Figure 2.5 Populations of Foreign Domestic Workers in Taiwan Source: Taiwan’s Directorate-General of Budget, Accounting, and Statistics (DGBAS). 7.

(13) Taiwan is not the only nation that has introduced foreign domestic worker programs in Asia. Singapore, Hong Kong and Korea have introduced similar programs in the past decades, but their standards for applying for foreign domestic workers are much lower than those in Taiwan. In Singapore, citizens only need to attend a training class and submit proof that their yearly incomes are at least 30,000 Singapore Dollars in order to qualify to hire a foreign domestic worker (劉邦棟、莊國良, 2005). Citizens in Hong Kong are asked to provide proof of their economic capacity and sign a hiring contract in order to apply for a foreign domestic worker. The Korean government adopts a country-to-country policy, officially. 政治大. negotiating with labor-export countries, and introduces foreign domestic workers so that. 立. native employers apply for a foreign domestic helper directly from the government (邱駿. ‧ 國. 學. 彥, 2009).. ‧. Surprisingly, over the years, only a few empirical studies in Europe, America and other Asian countries have investigated the effect of foreign domestic workers or. y. Nat. io. sit. immigrants who provide house work services on the native women’s labor supply. Barone. n. al. er. and Mocetti (2011) mentioned that, in developed countries, the link between low-skilled. Ch. i n U. v. immigration and the native female labor supply was rarely discussed in the historical. engchi. literature. They explored how female immigrants who provide household services affect the local female labor supply in Italy. This study also suggested that estimating the impact of immigrants with an OLS method might lead to biased results. For example, there might be omitted variables which have correlation with both the proportion of immigrants and native female labor supply, such as working environment. And they thought reverse causality might exist in the case that highly-intensive working native women cause the proportion of immigrants to rise. So they established an instrument, which used the historical distribution of male immigrants in every county in order to predict the recent. 8.

(14) influx of female immigration, in order to solve the endogenous problem and reverse causality. They found that the number of immigrants who specialize in household production had a positive effect on native women’s working hours but not on labor force participation. The impact was only statistically significant on highly skilled native women. Farré et al. (2011) discussed the impact of female immigrants on the labor supply of local women in Spain. In order to avoid endogeneity, the authors used an ethnic networks instrument to approach the analysis. They found that immigrants increased the employment rate and working hours of highly-skilled women who have family responsibilities in Spain. Cortes and Tessada (2011) investigated whether low-skilled immigrants impact on the. 政治大. female labor supply in the United States. The article evaded endogeneity of location choice. 立. of immigration by using an instrument that refers to the historical distribution of. ‧ 國. 學. immigrants in every county in order to present the recent number of immigrants in each. ‧. area. They found that the services provided by low-skilled immigrants increased the labor supply of women whose wages are at the top quartile of distribution.. y. Nat. sit. Cortes and Pan (2013) examined how the services provided by foreign domestic. n. al. er. io. workers affected native women’s labor supply and welfare in Hong Kong. The study used. Ch. i n U. v. two approaches, aggregate and micro strategies, in order to conduct the research. In the. engchi. aggregate strategy, they applied a triple-difference procedure in order to examine the difference of employment rates between mothers with younger child and mothers with elder child in both Hong Kong and Taiwan. In the micro strategy, they constructed a model, derived from utility maximization, in order to estimate the female labor supply. They found that foreign domestic workers increased the labor force participation rate of mothers, especially for mothers with young children.. 9.

(15) III. Theoretical Framework Woman’s time-allocation problem The following model was provided by Wing Suen in 1994 and assumes that a woman will manage her time between three primary activities: housework, market work and leisure. In order to simplify the model and allow the demand for domestic services and the supply of market work to be separate decisions regarding wage rates, two main assumptions were made. The first assumption is that one can perfectly substitute the chores done by native woman with the chores done by domestic workers. The other assumption is. 政治大 imply that when the native woman’s own wage exceeds the domestic workers’ wage, she 立. the perfect divisibility of the services provided by domestic workers. The two assumptions. ‧ 國. 學. will purchase the housework service.. Let D be the time spent on housework by the native woman, which is assumed to be a. ‧. fixed length of time. T is the time endowment for the woman who hires a domestic worker,. sit. y. Nat. and will change to T-D if she does not hire one. The cost of hiring a domestic worker is P.. io. er. Due to the perfect substitution of housework done by the native woman and by the. al. domestic worker we can say that it will take the two the same length of time to do the. n. v i n chores. Therefore, the domesticC worker’s per unit of time would be P/D. The U h e n payment i h gc. woman’s utility function is only directly affected by consumption and leisure, which are assumed to be normal goods.. Figure 3.1 shows the effect of the domestic worker program on women who originally did not join the labor force market. Panel (a) assumes that a woman’s potential wage, w, equals the domestic worker’s payment per unit of time. CAF is the budget constraint of the woman before the domestic worker program. F equals T-D. I0 is her unearned income. Because the slope of U0 at A is steeper than the budget constraint, she would spend ̅̅̅̅ 𝐹𝑇 to. 10.

(16) ̅̅̅̅ for leisure. After the implementation of the domestic do the housework while using 0𝐹 worker program, the woman’s budget constraint will change to CBT, and the cost of purchasing a domestic worker makes I0 drop to I1. The slope of U1 at B is flatter than the slope of U0 at A, which means that the lower reservation wage allows the woman join the labor force. When the policy is put into practice, she will purchase a domestic worker and reallocate her time to leisure ̅̅̅̅ 0𝑁, and market work ̅̅̅̅ 𝑁𝑇. In this case, the domestic worker program will stimulate the woman to participate in the labor market. Panel (b) assumes that the woman’s potential wage is greater than the domestic worker’s payment per unit of time. The situation would be the same as Panel (a) before the. 政治大. implementation of the domestic worker program. When the policy starts, the new budget. 立. constraint C1BT will dominate the original one. As the illustration shows, the slope of U1 at. ‧ 國. 學. B is flatter than the slope of U0 at A. Given this, a woman will purchase a domestic worker. ‧. and reallocate her time to leisure and market work after the policy was implemented. As a result, the policy also encourages women to join the labor market.. y. Nat. io. sit. The case where the woman’s potential wage is smaller than the domestic worker’s. n. al. er. payment per unit of time is illustrated in Panel (c). When P is large enough, the woman. Ch. i n U. v. will refuse to hire a domestic worker and will stay at home to do the housework herself.. engchi. But it would be another story if the marginal rate of substitution between leisure and consumption was greater than the wage rate. In this situation the woman will choose to hire a domestic worker, changing her utility from U0 to U1. The three cases in Figure 1 all point to the positive relationship between the domestic worker policy and women’s labor force participation. Figure 3.2 illustrates the effect of the domestic worker program on women who had joined the labor force market before the implementation of the policy. Unlike the consistent results of the cases in Figure 1, the policy in Panel (b) benefits the woman while not. 11.

(17) changing the woman’s utility level in Panel (a) and even makes the woman worse off in Panel (c). The three illustrations explicitly show that the decision of whether to hire a domestic worker or not is different among women and depends on their wage rates. In sum, the model predicts that the emergence of the domestic worker programs is more likely to benefit women who did not join the labor force before the policy than it is to benefit those who had previously participated in the labor market. That is, non-employed women would be more willing to hire a domestic worker after the implementation of the policy. The model provides us with a means to predict the effect of foreign domestic worker. 政治大. programs on native women in Taiwan. The following sections of empirical research will. 立. only discuss the overall impact of foreign domestic worker programs and will not discuss. ‧ 國. 學. the six cases in the model separately because of the limitation of micro data. In fact, the. ‧. foreign domestic payment per unit of time is far lower than the minimum wage instituted by the government in Taiwan. So the situation which faces native women may be similar in. y. Nat. io. sit. Figure 1(b) and Figure 2(b). According to the model, we may predict that foreign domestic. n. al. er. worker programs will increase the labor force participation rate and the working hours of native women in Taiwan.. Ch. engchi. 12. i n U. v.

(18) (a) w=P/D. (b) w>P/D. y. A B. I1. Leisure. al. FN T. n. F N T. Leisure 0. I0. B. U0. sit. B. A. io. 0. I0 I1. A. U1 C0 C1. Nat. I1. U0 U1. Consumption. ‧. ‧ 國. U0 U1. I0. 立. C1 C0. 政治大. 學. C. Consumption. Ch. engchi. er. Consumption. (c) w<P/D. i n U. v. 0. F. N T. Leisure. Figure 3.1: Effect of domestic worker program on time-allocation problem of women who are not in the labor force Source: Wing Suen (1994). 13.

(19) (a) w=P/D. (b) w>P/D. Consumption. U0 U1. ‧ 國 T. I0. B. y. Leisure 0. io. F. n. al. F. T. U1. U0. A B. I1. Leisure 0. i n U. Ch. C0 C1. ‧. B. A. Nat. 0. I0 I1. A. I1. 學. C. I0. 立. C1 C0. Consumption. sit. U0. 政治大. er. Consumption. (c) w<P/D. Leisure. F. T. v. e n g c h i problem of women who are in the labor force Figure 3.2: Effect of domestic worker program on time-allocation Source: Wing Suen (1994). 14.

(20) IV. Empirical Analysis 1. Empirical models and data This paper investigates the relationship between foreign domestic workers and native women’s labor market outcomes in Taiwan. The Taiwan Manpower Utilization Survey (MUS) is used as the main database in order to proceed with the empirical analysis. The Manpower Utilization Survey has been conducted every May by Taiwan’s Directorate-General of Budget, Accounting, and Statistics (DGBAS) since 1978. Each year the survey contains labor force information from about 60,000 individuals who are. 政治大 Two-stage stratified sampling is used to sample households for this survey. Sample 立. Taiwanese citizens above the age of 15, excluding those in military service or prison.. ‧ 國. 學. units drawn in the first stage of sampling are TSUN/LIs, while those drawn in the second stage are households. Approximately 500 TSUN/LIs were drawn in the first stage of. ‧. sampling and about 20,000 households were sampled in the second stage. The survey. sit. y. Nat. adopts a 2-10-2 sample rotation method, so each year almost half of the sample is the same. io. al. er. as the previous year.. n. At the beginning of the questionnaire there are some questions about personal information, such as gender,. v i n C hand highest levelUof education. age, engchi. After the personal. information, there are three parts in the questionnaire. The first part aims to understand the manpower utilization and job changing status of employees. It asks employees for their monthly income from their primary job, the number of hours per week usually worked, their duration in their present job, the number of times they have changed jobs, their previous places of work and type of work, their reason for leaving their previous job, the way they got their present job, and whether they expect to change jobs or to get an additional job in the meantime. The second part aims to understand the manpower utilization and job changing status 15.

(21) of unemployed people. It asks unemployed people about the kind of job that they wish to have and their expected monthly payment, whether they encounter any job opportunities when seeking for jobs, the reason why they decline a job, and the resources that they rely on while looking for a job. The third part aims to understand the manpower utilization and job changing status of people who can work but are not in the labor force. It asks them about their work status from the last year and their reason for quitting the job, their experience of looking for jobs last year and the reason they stopped looking for a job, their willingness to work and expected payment in order to understand the status of the potential labor force. Moreover,. 政治大. the survey asks women who have spouses about the age of their children, in order to. 立. understand how the age of children affects the labor participation rate of women who have. ‧ 國. 學. spouses.. ‧. In addition to MUS, the study draws data from the Department of Household Registration M.O.I and the Bureau of Employment and Vocational Training in order to get. y. Nat. io. sit. the population of local females and foreign domestic workers for counties and cities. The. n. al. er. available duration of the data is from May 1978 to May 2012 in MUS while that from the. Ch. i n U. v. Bureau of Employment and Vocational Training is available from August 2009 to April. engchi. 2013. The study selects the overlapping period from May 2010 to May 2012 to conduct the analysis. The sample size is 173,166 in total. The empirical model in this paper is based mainly on that of Barone and Mocetti (2011), who examined how female immigrants who served as domestic workers affected the local female labor supply in Italy. Moreover, I refer to 莊慧玲、林世昌(2006) who arranged most of the empirical studies over the past 50 years that relate to the female labor supply in Taiwan. They found that women’s labor force participation rate is significantly affected by their age, education level, and number and ages of children, while women’s. 16.

(22) working hours were significantly affected by their age, education level, number of children, husband’s income and wage rates. Although they did not mention the effect of elders in the household on women’s employment decisions, I wonder about the impact that must exists given traditional social norms in Taiwan. So I refer to 賴意婷 (2011) establishing a variable ‘number of elders in the household’ in order to investigate the effect of elders in the household on women’s employment. I think that this newly-created variable is an ideal substitution for ‘whether there are elders in the household’, because the former is able to show the impact of elders in the household more accurately. The study uses the above literature as references in order to sort out the dependent. 政治大. variables and independent variables in the model (Equation (4.1)). LMOi, =α+Si,l β+Xiγ+εi. Equation (4.1). 學. ‧ 國. 立. ‧. LMO is the outcome variable, including whether women join the work force and the. y. Nat. io. sit. number of hours they work per week. i denotes individuals. S is the share of foreign. n. al. er. domestic workers on the total local female population in the specific l county or city where. Ch. i n U. v. woman i resides. X is the matrix of individual-level characters, including age, age square,. engchi. highest level of education, income of her husband per month, number of children and number of elders in the household. Moreover, year and regional dummies are also included in X. Since “husband income” and “number of children” are important independent variables for women’s labor market outcomes, the study only uses married women as the population. The study applies a probit model to the first regression (whether women join the work force) and applies a tobit model to the second regression (number of hours they work per. 17.

(23) week). The panel data methods can be applied to this data structure. I do not use them here but may do so for future studies. Foreign domestic workers contain foreign domestic helpers and foreign caretakers. In fact, the latter includes two kinds of workers- foreign domestic caretakers and rehabilitation center foreign caretakers. The study used the number of foreign caretakers but not foreign domestic caretakers to do the research because the Bureau of Employment and Vocational Training only released the data of foreign caretakers, and I think that the data is remain a good estimator because the number of foreign domestic caretakers accounted for about 95% of the number of foreign caretakers.. 政治大. Figure 4.1 shows the share of foreign domestic workers on the total local female. 立. populations for counties and cities in Taiwan. The proportion of foreign domestic workers. ‧ 國. 學. has increased in every county and city from 2010 to 2012 except in Taipei City and. ‧. Hsinchu City.. This paper establishes three dummy variables in order to control for the effect of. y. Nat. io. sit. education level on women’s labor market outcomes. “Junior high or below” is defined as. n. al. er. having a junior high or below education level, which is set as the reference group. The. i n U. v. other two categories are “high school” and “college or above”.. Ch. engchi. The variable “husband’s income” refers to the spouse’s monthly income. Because the raw data of MUS did not pair husband and wife together and the questionnaire did not ask about the income of one’s spouse, the variable cannot be directly obtained. The study adopts a method from Chuang and Lin (2006) which uses the household ID number in order to match the sample of “housemaster” and “the spouse of housemaster” to pair them into couples. The variable is classified into six dummy variables and the range of each group is 20,000 NT dollars. Spousal incomes that are lower than 20,000 or even are deficit are classified as the reference group.. 18.

(24) The paper classifies “number of children” into three categories. There are “number of children under the age of 3”, “number of children from age 3 to 5”, and “number of children from age 6 to 17”. I refer to Cortes and Pan (2009) and Barone and Mocetti (2011) to set the boundary value. All counties and cities are categorized into four regional dummies: north, east, south and midst. This classification is made according to the Department of Household Registration M.O.I. “East” is set as the reference group, which includes Taitung County and Hualien County. “North” includes New Taipei City, Taipei City, Yilan County, Taoyuan County, Hsinchu County, Keelung City and Hsinchu City. “Midst” includes Taichung City,. 政治大. Changhua County, Nantou County and Yunlin County. “South” includes Tainan City,. 立. Kaohsiung City, Chiayi County, Pingtung County, Penghu County and Chiayi City. The. ‧ 國. 學. paper excludes Kinmen County and Lienchiang County from the analysis since the MUS. ‧. does not publish data of native women for these two regions separately. It is worth mentioning that although Taiwan did conduct the city-county consolidation at the end of. y. Nat. io. sit. 2010, this did not affect the classification of the regional dummies. The detailed definitions. n. al. er. of all the variables are listed in Table 4.1.1.. Ch. i n U. v. The sample size becomes much smaller due to pairing husbands and wives together. I. engchi. dropped samples who were single or whose spouse did not participate in the survey. After keeping all the married women’s data, 36, 398 observations remained. Table 4.1.2 provides descriptive statistics for all the variables. According to the descriptive statistics, 43% of women are participating in the labor market. The proportion of foreign domestic workers in counties or cities is about 1% on average. More than 50% of the population belongs to the lowest education level and nearly 20% of the population belongs to the highest education level. More than 44% of the female’s spouse’s incomes are lower than 20000 NT dollars, since lots of zeros are shown. 19.

(25) in the raw data of income value. It is hard to know whether this is because they did not get paid or because they refused to answer the question. The number of samples was distributed equally in each year after the arrangement of the raw data. Only about 4% of the sample is drawn from the East of Taiwan, while that drawn from the other three regions, north, middle and south, does not differ too much from each other.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 20. i n U. v.

(26) Table 4.1.1 Definitions of All the Variables Variables. Definitions. Dependent variables Labor force participation. Dummy variable, equals 1 if a native woman participates in the labor market and 0 otherwise.. Weekly working hours Independent variables The proportion of foreign domestic. The share of foreign domestic workers on the total local. workers. female population in the specific county or city.. Age Age square Highest level of education Junior high or below. The reference group.. High school. Dummy variable.. College or above Husband’s monthly income (NT). Aged 3 to 5 Aged 6 to 17 Number of elders aged over 65. y. Dummy variable.. al. n. Under the age of 3. io. Number of children. Dummy variable.. sit. 100000 or above. Dummy variable.. Nat. 80000~100000. Dummy variable.. ‧. 60000~80000. Dummy variable.. er. 40000~60000. Dummy variable.. The reference group.. ‧ 國. 20000~40000. 立. 學. below 20000. 政治大. Number of children under the age of 3.. i n U. v. C hNumber of children from age 6 to 17. engchi Number of children from age 3 to 5.. Year 2010. The reference group.. 2011. Dummy variable.. 2012. Dummy variable.. region East. The reference group.. North. Dummy variable.. Midst. Dummy variable.. South. Dummy variable.. 21.

(27) Table 4.1.2 Descriptive Statistics Variables Dependent variables Labor force participation Weekly working hours Independent variables The proportion of foreign domestic workers (%) Age Age square Highest level of education Junior high or below. n. Midst South. Min. 0.4299 18.4146. 0.4951 22.2460. 1 112. 0 0. 1.6513. 0.4949. 2.8194. 0.9503. 52.3687 2908.165. 12.8721 1400.064. 99 9801. 18 324. 0.5178. 0.4997. 1. 0. 0.2861 0.1961. 0.4519 0.3970. 1 1. 0 0. 0.4427 0.2507 0.1799 0.0739 0.0251 0.0276. 0.4967 0.4334 0.3841 0.2616 0.1565 0.1639. 1 1 1 1 1 1. 0 0 0 0 0 0. 0.0466 0.0710 0.4631 0.5125. 0.2345 0.2995 0.8221 0.8033. Ch. 0.3365 0.3308 0.3328. y. sit. 3 3 7 4. 0 0 0 0. 0.4725 0.4705 0.4712. 1 1 1. 0 0 0. 0.0382 0.3895. 0.1916 0.4876. 1 1. 0 0. 0.2576 0.3148. 0.4373 0.4644. 1 1. 0 0. engchi. 22. er. io. al. Max. ‧. Nat. Under the age of 3 Aged 3 to 5 Aged 6 to 17 Number of elders aged over 65 Year 2010 2011 2012 region East North. St. dev.. 政治大. ‧ 國. 立. Mean. 學. High school College or above Husband’s monthly income (NT) below 20000 20000~40000 40000~60000 60000~80000 80000~100000 100000 or above Number of children. (Sample Size: 36,398). i n U. v.

(28) n. Ch engchi. 23. i n U. v y. Figure 4.1 the Share of Foreign Domestic Workers on the Total Local Female Population for Counties and Cities in Taiwan Source: Taiwan’s Directorate-General of Budget, Accounting, and Statistics (DGBAS). sit. io. al er. ‧. ‧ 國. 學. Nat. Population (%). 立政治大.

(29) 2. Results Table 4.2.1 shows the result of the probit estimates of whether a woman participates in labor market based on Equation (4.1). The coefficients from Table 4.2.1 have been transformed into marginal effects. The first row of Table 4.2.1 reports the relationship between the proportion of foreign domestic workers and native women’s labor force participation for counties and cities. There is a positive correlation between the proportion of foreign domestic workers and local women’s labor force participation, statistically significant at the 1% level. When the proportion of foreign domestic workers increases by 1%, the model estimates a 3% increase in the labor force participation among women.. 政治大. The coefficient of age is positive and statistically significant at the 1% level while it is. 立. negative and statistically significant at the same level for age square. That means female. ‧ 國. 學. labor force participation will initially rise with increasing age, but will start to decline. ‧. when women get older.. Among women who have a high school education background, the model estimates. y. Nat. io. sit. an increase in labor force participation of 4.5% points, and a college-leveled education. n. al. er. background raises the probability of being in labor force by 17% points. This implies that. Ch. i n U. v. more education is associated with a higher probability of working.. engchi. The coefficients of the husband’s monthly income are positive. Among women whose husband’s income is between 20000 and 40000 NT dollars, this shows a large rise in labor force participation of 13% points at the 1% significance level, while there is no significant effect among women whose husband’s income is 100000 NT dollars or higher. This implies that a lower income of one’s husband is associated with a higher probability of the woman’s working. For women who have one more child under the age of 3, the model estimates a large decline in labor force participation of 15% points, and having one more child aged 3 to 5. 24.

(30) reduces the probability of being in the labor force by 7% points. Women who have older children are more likely to work, but this is not a significant determinant of working. The number of elderly people in the household is negatively related to women’s labor force participation, statistically significant at the 10% level. For women who live with one more elderly person aged 65 or older, the model estimates a decline in labor force participation of 1% point. The positive correlation between female labor force participation and the service provided by foreign domestic workers accords with the prediction made in section III. The results of the other control variables of age, highest level of education, husband’s income. 政治大. and number of children are all consistent with most of the past empirical studies. And the. 立. result of number of elders in the household is consistent with the assumption which was. ‧ 國. 學. mentioned earlier in the study.. ‧. Table 4.2.2 reports the results of the tobit estimates of a woman’s weekly working hours based on Equation (4.1), and the coefficients from the Table have been transformed. y. Nat. io. sit. into marginal effects. The tobit model would be applied if the dependent variable is. n. al. er. constrained and there is a clustering of observations at the constraint. Because lots of. Ch. i n U. v. values of weekly working hours are zero in our data, the current paper uses a tobit model to proceed with the analysis.. engchi. There is a positive correlation between the proportion of foreign domestic workers and hours worked by local women, statistically significant at the 1% level. When the proportion of foreign domestic workers increases by 1%, the model estimates a weekly one working hour increase among women. The coefficient of age is positive and statistically significant at the 1%level, while it is negative and statistically significant at the same level for age square. Among women who have a high school education background, the model estimates an increase in working. 25.

(31) hours by 1.8 hours per week, and a college-level background increases weekly working hours by 5.8 hours. This implies that higher education is associated with longer hours worked by native women. Again, the impact of income is sizable and stronger for husbands with a lower income. This implies that a lower husband’s income is associated with longer working hours for the woman. Having a child under the age of 3 reduces the hours worked per week by more than 5 hours; the effect is statistically significant at the 1% level. Furthermore, having a child aged 3 to 5 reduces working hours by 2.5 hours per week, statistically significant at the 1%. 政治大. level. The reduction is about 0.15 hours for children aged 6 to 17, but this is not a. 立. significant determinant of working.. ‧ 國. 學. The number of elders in the household is negatively related to women’s weekly. ‧. working hours, statistically significant at the 1% level. For women who live with more than one elderly person aged 65 or older, the model estimates a decline in 0.7 hours. io. sit. y. Nat. worked per week.. n. al. er. The positive correlation between female working hours and the service provided by. Ch. i n U. v. foreign domestic workers accords with the prediction made in section III. Age, highest. engchi. level of education, husband’s income, number of children and number of elders all have significant and expected signs in this model. And the result of the number of elders in the household is also consistent with the assumption made in this study.. 26.

(32) Table 4.2.1 Foreign Domestic Workers and Labor Force Participation of Local Women Probit Model (marginal effects) Variables. Coefficients. Standard Err.. The proportion of foreign domestic workers (%). 0.0304***. 0.0081. Age. 0.0336***. 0.0025. Age square. -0.0005***. 0.00002. Highest level of education Junior high or below (The reference group) High school. 0.0458***. 0.0071. 0.1736***. 0.0088. College or above Husband’s monthly income (NT) below 20000 (The reference group) 20000~40000. 立. 政治大 0.0081. 40000~60000. 0.1108***. 0.0080. 60000~80000 80000~100000. 0.0795*** 0.0763**. 0.0132. 100000 or above. 0.1100. 0.0345. ‧. ‧ 國. 學. 0.1338***. 0.0729. Aged 3 to 5. -0.0723***. er. al. 0.0129. sit. -0.1514***. io. Under the age of 3. y. Nat. Number of children. 0.0042 -0.0117*. v ni. 0.0040 0.0065. 2011. -0.0142**. 0.0068. 2012. -0.0134*. 0.0069. North. -0.0485***. Midst. 0.0163. 0.0150 0.0152. South. 0.0102. 0.0154. n. Aged 6 to 17 Number of elders aged over 65. 0.0099. Year. Ch. engchi U. 2010 (The reference group). region East (The reference group). Observations: 36, 398. *Significant at 10%. **Significant at 5%. ***Significant at 1%.. 27.

(33) Table 4.2.2 Foreign Domestic Workers and Working Hours of Local Women Tobit Model (marginal effects) Variables. Coefficients. Standard Err.. The proportion of foreign domestic 1.0900*** workers (%). 0.3075. Age. 1.6920***. 0.0939. Age square. -0.0231***. 0.0010. 1.8612***. 0.2691. 5.8225***. 0.3197. Highest level of education Junior high or below (The reference group) High school College or above Husband’s monthly income (NT) below 20000 (The reference group) 20000~40000. 立. 政治大. 40000~60000. 5.1421***. 0.3033. 60000~80000 80000~100000. 4.1612***. 100000 or above. 7.4547***. ‧ 國. 0.3049. 學. 5.8249***. 0.4799 1.2439. ‧. 4.1489***. 2.6050. -2.5729***. al. y. Aged 3 to 5. 0.4870 0.3670. er. -5.3319***. io. Under the age of 3. sit. Nat. Number of children. -0.1511 -0.7869***. 0.1468 0.2523. 2011. -0.4775*. 0.2597. 2012. -0.4647*. 0.2635. Midst. -1.3525** 1.1168*. 0.5833 0.5815. South. 0.8248. 0.5896. n. Aged 6 to 17 Number of elders aged over 65 Year. Ch. engchi U. v ni. 2010 (The reference group). region East (The reference group) North. Constant. -29.1706*** 2.4337. Observations: 36, 398. *Significant at 10%. **Significant at 5%. ***Significant at 1%.. 28.

(34) V. Conclusion Since 1992, the government has introduced the “foreign caretaker scheme” and the “foreign domestic helper scheme” into Taiwan. The aim of the two schemes was to lessen women’s burden from attending to the old and the young, and free up native women to join the labor market. However, whether the programs can raise women’s labor force participation rate had not been confirmed in the literature. This study makes an initial attempt using an empirical method to analyze the connection between foreign domestic workers and women’s labor market outcomes in. 政治大 the proportion of foreign domestic workers to the native female population has a strong 立 Taiwan. Probit and tobit models are applied to conduct the research. The study finds that. ‧ 國. 學. positive correlation to native women’s labor market outcomes. When the proportion of foreign domestic workers increases by 1%, the model estimates an 3% increase in the labor. ‧. force participation of women. And the correlation is statistically significant at the 1% level.. sit. y. Nat. When the proportion of foreign domestic workers increases by 1%, the model estimates a. io. al. variables is also statistically significant at the 1% level.. er. weekly one working hour increase among women. The correlation between the two. n. v i n The results of the researchCprovide point of view on the factors that are U h e nagnewer i h c. related to women’s labor market decisions. The existence of services provided by foreign. domestic workers seems to have a strong positive relationship with women’s labor market outcomes in Taiwan. Moreover, the findings have certain implications for policies that encourage females to enter the labor market. In the past years, there have been requests from citizens asking government to loosen the limitations placed on applying for foreign domestic workers. However, the government is concerned that native domestic workers would suffer from an unemployment shock because they request higher wage rates than foreign domestic workers. Given this, the 29.

(35) qualifications required to apply for a foreign domestic worker are still quite strict in Taiwan when compared to other Asian counties. Future studies can take related topics further by examining the positive impact on female labor market decisions and the negative impact on native domestic workers, analyzing the overall effect of the “foreign caretaker scheme” and the “foreign domestic helper scheme”, and thereby provide further suggestions about these programs to government.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 30. i n U. v.

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