Coupled thermal and carrier transport (electron/hole generation, recombination, diffusion and drifting) in laser photo-etching of GaAs thin film is investigated. A new volumetric heating mechanism originated from SRH (Shockley-Read-Hall) non-radiative recombination and photon recycling is proposed and modeled based on recent experimental findings. Both volumetric SRH heating and Joule heating are found to be important in the carrier transport as well as the etching process. SRH heating and Joule heating are primarily confined within the space charge region which is about 20 nm from the GaAs surface. Surface temperature rises rapidly as the laser intensity exceeds 105 (W/m2). Below a laser intensity of 105 (W/m2), thermal effect is negligible. The etch rate is found to depend on the competition between photo-voltaic and photo-thermal effects on surface potential. At high laser intensity, etch rate is increased by more than 100% due to the SRH and Joule heating.