We evaluate some explanations of immigrants' family labor-supply behavior. Upon arrival, immigrant husbands work less than natives, but immigrant wives work more. A conventional labor-supply model uses wage assimilation to explain these differences but is not supported by the data. More favorable results are obtained for the "family investment model," in which wives in immigrant families take on "dead-end" jobs to finance their husbands' investments in human capital. We conclude that family composition is an important correlate of immigrants' assimilation, and the family investment model can account for many of the patterns in the data.

After 30 years of egalitarian rhetoric and collectivist practice, the introduction of market reforms to rural China entailed obvious risks for policymakers. Increases in average income might not compensate for the inequality generated by market-based income determination. Concern for this possibility may help explain the slow relaxation of administrative control over the allocation of resources like land. In order to evaluate the effect of market reforms, we could begin by comparing the current Gini coefficient to that which prevailed during the collective era (see Louis Putterman [1993] for early evidence). Yet, this might tell us little about the specific impact of market organization on income determination. Government policies, such as collective land ownership, mobility restrictions, and fertility limits cloud the picture. Furthermore, industrialization, though itself a product of the reforms, has changed the basis upon which individuals earn income. Isolating a pure effect of ‘‘market organization’’ is a difficult but important task since many current Chinese policies reflect an ambivalent attitude toward decentralized, market-based resource allocation. We offer a few suggestions on issues that need to be considered as this evaluation proceeds, by exploring current inequality in rural northeast China from the vantage point of the 1930’s. We begin with the observation that the level of inequality is similar in 1995 and 1935, and moreover, that most contemporary inequality exists within villages, as was the case in the 1930’s. We then focus on two institu-

The authors evaluate some explanations of immigrants' family labor-supply behavior. Upon arrival, immigrant husbands work less than natives but immigrant wives work more. A conventional labor-supply model uses wage assimilation to explain these differences but is not supported by the data. More favorable results are obtained for the 'family investment model, ' in which wives in immigrant families take on 'dead-end' jobs to finance their husbands' investments in human capital. The authors conclude that family composition is an important correlate of immigrants' assimilation and the family investment model can account for many of the patterns in the data. Copyright 1997 by American Economic Association.