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Domestic Helpers and Native Female Labor Supply in Kuwait Open Access

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The main objective of this dissertation is to investigate the relationship between low skilled migrants who specialize in household production and Kuwaiti female labor force participation in a country with a special visa program, exploring how this relationship differs with family structure, especially the number of working-age women in the household. The first essay in the dissertation covers the two markets of interest: the Kuwaiti female labor force market and the market for domestic helpers. The trends, characteristics, and evolution of each market are presented. In addition, supply and demand factors in each market are explained, including the special visa program that exists for domestic helpers. The first essay serves as a description of the structure of each relevant labor market. The second essay empirically investigates the determinants of demand for DHs in a country with a special visa program for DHs, exploring how demand differs depending on the family structure, especially the number of working-age women in the household. Microdata from the Kuwaiti Labor Force Survey (KLFS) is used in the analysis for the years 2014 and 2015. The demand equation is estimated using a Poisson-Hurdle count model to take into account the number of domestic helpers hired by individual households. The results show that household income, ownership status, the female head’s level of education, age, and marital status are significant determinants of demand for domestic helpers. As for the number of additional working-age women, the demand for domestic helpers is positively affected by the number of working age females for households with an average income. In addition, domestic helpers serve in part as substitutes who can perform elderly and child care in Kuwait since the presence of elderly persons and children in a household increases the demand for DHs. Lastly, the determinants of demand differed across different household structures. The last essay investigates two issues: (1) whether the decision to join the labor force and to hire a domestic helper is related and (2) whether the value of a Kuwaiti female’s time is an important determinant of demand for domestic helpers. A multivariate probit model with wages corrected for selectivity bias is estimated. The results show that the predicted wages of Kuwaiti female heads positively affect the probability of hiring a domestic helper. This result does not hold for females that are not household heads. Also, the results show that there exists a positive and significant interdependence between the decision to join the labor force and the decision to hire a female domestic helper in households with no additional working age women besides the female head.

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