Immigration and inequality: Analysis of Mainland Chinese spouses during the early stages of their time in Taiwan

• Published date: 01 October 2023
• Author: Wehn‐Jyuan Tsai
• Date: 01 October 2023
• DOI: http://doi.org/10.1111/1468-0106.12373

ORIGINAL MANUSCRIPT

Immigration and inequality: Analysis of

Mainland Chinese spouses during the early

stages of their time in Taiwan

Wehn-Jyuan Tsai

Department of Economics, Shih Hsin

University, Taipei, Taiwan

Correspondence

Wehn-Jyuan Tsai, Department of

Economics, Shih Hsin University, No. 111

Mu-Cha Road, Section 1, Taipei

116, Taiwan.

Email: wjtsai@mail.shu.edu.tw

Funding information

Ministry of Science and Technology,

Grant/Award Number: MOST

107-2410-H-128-006

Abstract

InthisstudyonMainlandChinesewomeninTaiwan,I

examined the effect of immigration-related disruption on

the assimilation of these women into the Taiwanese

labour market during 2005–2015. Accordingly, I used a

unique dataset obtained by linking three administrative

registers to measure the assimilation process. In addition,

I employed the nearest-neighbour matching estimator to

assess heterogeneous effects on each Mainland Chinese

woman. The results indicated narrowing immigrant–

native gaps in labour supply (full-time employment

rates) and real monthly insured wages for their first

traceable job in favour of Mainland Chinese women. In

general, I found that Mainland Chinese women assimi-

lated into the Taiwanese workforce at levels comparable

with those of Taiwanese women.

1|INTRODUCTION

Over the past two decades, a steady flow of immigrants has moved to Taiwan through marriage.

The proportion of cross-border marriages surged from 16% to a peak of 32% between 1998 and

2003, largely because Taiwanese men married foreign-born women through marriage agencies.

Of the 171,483 marriages in 2003, 28% were of Taiwanese men who married foreign-born

women and 3% were of Taiwanese women who married foreign-born men. Furthermore, 99%

of foreign-born brides were from Vietnam, Indonesia, Thailand, the Philippines, Malaysia, and

Mainland China (in general, 34% from Southeast Asian countries and 65% from Mainland

China).

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Mainland Chinese women tended to marry Taiwanese men of a lower socioeconomic status

(SES) (Chen, 2008; Friedman, 2010). However, few studies have investigated the choices and

Received: 2 February 2021 Revised: 16 June 2021 Accepted: 7 August 2021

DOI: 10.1111/1468-0106.12373

Pac Econ Rev. 2023;28:519–551. wileyonlinelibrary.com/journal/paer ©2021 John Wiley & Sons Australia, Ltd. 519

level of assimilation of Mainland Chinese women in the Taiwanese labour market. If Mainland

Chinese women encounter poor labour market conditions during arrival relative to Taiwanese

women of a comparable status, their convergence towards native labour market conditions

increases household earnings that were initially at the bottom end of the earnings distribution.

By contrast, a widening immigrant–native gap worsens the economic conditions of a household.

In this study, I investigate the effect of immigration-induced disruptions on the assimilation

of Mainland Chinese women (who married native Taiwanese men in recent decades and are

not part of the 1949 wave of immigrants) into the Taiwanese labour market. To measure the

assimilation process, a unique dataset was assembled based on three sets of administrative

records: labour insurance files, the National Health Insurance Research Database (NHIRD),

and birth certificate records. Specifically, these records were used to track the employment sta-

tus of women who immigrated from Mainland China and women from Taiwan for the 2005–

2015 period whose last labour insurance records were filed between 2014 and 2015. The govern-

ment's implementation of their immigration policy was used to define the years since migration

(YSM), calculated as the period between the earliest and latest instance of employment for an

immigrant woman. The first traceable records of employment over a decade for nine arrival

cohorts were used to evaluate the effect of immigration on inequality and the time elapsed

while the immigrant was in the host country before they assimilated into the labour market at

native (Taiwanese) levels.

Because immigrants are likely to systematically differ from natives, nearest-neighbour

matching (NNM) estimators were used to assess the heterogeneous effects on each Mainland

Chinese woman. Covariate matching based on the Mahalanobis distance can be used to impute

the missing potential outcome for each treated immigrant woman in the case of absence of

immigration. This research design enables the identification of the average treatment effect

(ATE) of immigration on the immigrant–native gap and the assimilation profiles of labour mar-

ket outcomes of women from Mainland China relative to those from the native-born reference

group.

Studies have typically associated the assimilation process of immigrants with the character-

istics of their source country (Blau, Kahn, & Papps, 2011; Bratsberg, Raaum, & Røed, 2014;

Lim & Mahbub Morshed, 2019). Blau et al. (2011) analysed US 1980–2000 census data to exam-

ine the effect of the traditional gendered division of labour in immigrant source countries on

the assimilation of married adult immigrants into the US labour market. They observed a

narrowing gap in annual work hours when immigrants were compared with their native coun-

terparts, and these immigrants were segmented by whether their source country had a high or

low female labour supply. In another study analysing data drawn from linked Norwegian

administrative registers, Bratsberg et al. (2014) reported that the difference in living standards

played a crucial role in immigrants' long-term performance in the labour market and in their

participation in a disability programme. Finally, Lim and Mahbub Morshed (2019) analysed the

1977–2010 General Social Surveys and the 1981–2008 World Value Surveys and found an associ-

ation between the levels of trust of US immigrants in 1935 and 2000 cohorts and their levels of

trust in their home countries. However, this association seemed to disappear in the fourth gen-

eration within each cohort.

This study makes the following contributions to the literature. First, similar to Bratsberg

et al. (2014), I construct a unique dataset of labour market outcomes of immigrants and natives,

for whom their first traceable employment records over the past decade were identified; I did so

by linking three administrative registers. This dataset comprises data on immigrant labourers,

who typically constitute a fraction of the population of labourers in a host country. This

520 TSAI

dataset allowed me to run much stronger tests than those in the literature of the assimilation of

immigrants into the host country, which are mostly based on cross-sectional censuses (Blau

et al., 2011; Lin, 2013; Meng & Gregory, 2005) or surveys (Basilio, Bauer, & Kramer, 2017;

Charles & Guryan, 2008; Fern

andez & Ortega, 2008; Kostenko, Harris, & Zhao, 2012; Lim &

Mahbub Morshed, 2019; Villarreal & Tamborini, 2018). Furthermore, this study is the first to

explore immigrants' healthcare utilization during arrival in the literature on immigration. I was

also able to tackle the unaddressed problem of potential bias caused by the omission of

unobserved individual health status and source country cultural norms; I did so by comparing

Mainland Chinese and Taiwanese women, who share cultural similarities with respect to, for

example, Confucian cultural heritage, ethnicity, language, education (Law, 1995), and organiza-

tional ethics (Lin, 2011).

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The remainder of the paper is organized as follows. Section 2reviews the literature and pre-

sents some background, specifically on immigration regimes and on characteristics of women

from Mainland China who married Taiwanese men and migrated to Taiwan. Section 3summa-

rizes the data used for analysis. Sections 4and 5describe my empirical strategy and present the

results. Finally, Section 6concludes the paper.

2|BACKGROUND

2.1 |Literature review

Discrimination against immigrants hasbeen commonly regarded as a key dimension of wage dif-

ferentials between immigrants and natives in a host country. However, little had been known

regarding the mechanisms underlying the relationship between prejudice and immigrant–native

wage gaps until Becker's (1957) study on the economics of discrimination. In Becker's taste-based

employer discrimination model, prejudiced native employers in a competitive market act as if

they are willing to pay an additional “price of prejudice”to avoid contact with immigrants.

3

Therefore, immigrants are only hired at a wage lower than the wages of equally productive

natives. Subsequently, economists have suggested statistical discrimination models that are

based on imperfect information; these models posit the abilities of individual immigrants as an

alternative explanation for wage inequality (Aigner & Cain, 1977; Dickinson & Oaxaca, 2009;

Phelps, 1972). This class of models posit that in the absence of reliable information on individual

immigrants, native employers often rely on information regarding the average characteristics of

the group to which immigrants belong. Therefore, statistical discrimination models suggest that

native employers may discriminate against immigrants because they erroneously underestimate

individual immigrant productivity even if they do not have a distaste for immigrant contact.

4

Considerable research effort has been directed towards measuring the effects of immigration

in different regions of the world in the past few decades; such research has covered the United

States (Blau et al., 2011; Card, 2009; Charles & Guryan, 2008; Lim & Mahbub Morshed, 2019;

Lin, 2013; Lin & Weiss, 2019; Villarreal & Tamborini, 2018), the UK (Romiti, 2018); Spain

(Fern

andez & Ortega, 2008), Norway (Bratsberg et al., 2014); Germany (Basilio et al., 2017),

Europe in general (Raess & Burgoon, 2015), and Australia (Kostenko et al., 2012; Meng &

Gregory, 2005), in addition to Syrian refugees in Turkey (Tumen, 2016). It is well documented

that immigration may create opportunities for labour imperfect substitution (Card, 2009), pro-

mote a wider dispersion of native wage distribution (Lin & Weiss, 2019), increase the incidence

of employment flexibility (Raess & Burgoon, 2015), reduce the costs of household services

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