Immigrants, domestic labor and women's retirement decisions

• Older women face a rising burden of elderly care due to population ageing.
• Taking care of elderly parents can be responsible for early retirement.
• Immigrants provided elderly care in recent decades.
• Immigration increased retirement age and employment of older women relative to men.
• The effect is stronger for women with older parents and in poor households.

This paper estimates the effect of immigrants on the women–men gap in retirement and working decisions. We focus on the effect that operates through immigrants' supply of domestic labor, which substitutes women's household services especially in the care of elderly parents. We use a dataset of Italian households that contains information on planned retirement age, labor supply and family structure for a representative sample in the years 2000–2008. A double-difference identification approach exploits the women–men differences between families with and without old parents, interacted with the supply of immigrants in the local labor market. We find that an increase of immigrants by one percentage point of the local population is associated with an increase in the planned retirement age gap between women and men with a living parent over 80, by 0.45. Such differential is reduced to 0.17 if the household had no living old parent. The effect is stronger for poor and for less educated women. It is also stronger when considering the inflow of Eastern European female immigrants only, the group supplying the largest share of labor for domestic care.