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Does citizenship matter? The economic impact of naturalizations in Germany

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  • Steinhardt, Max Friedrich

Abstract

The paper analyzes whether citizenship acquisition affects the labor market performance of immigrants in Germany. Up to the present, there is no empirical evidence about this question for Germany. Theoretically, naturalization can increase the productivity by enabling unrestricted access to the labor market. Furthermore, naturalization can increase the labor market opportunities of immigrants by a reduction of administrative costs for the employer. Eventually, the willingness to invest in human capital may increase with the decision to naturalize, which would boost productivity even prior to naturalization. A drawback of most conducted studies for the US, Canada or the Netherlands is that they are based on cross-sectional data. This disables the possibility to control for processes of selfselection within the group of immigrants and to identify the impact channel. In the following the study uses data from the IAB employment sample which allows conducting cross- sectional and panel analysis. The descriptive analysis reveals strong processes of self-selection within the immigrant workforce concerning the naturalization decision. The estimates from a simple OLS estimation indicate a wage premium of naturalized immigrants, whereas the impact for Third Country Nationals has the largest size. Panel estimations show an immediate positive naturalization effect on wages. Furthermore they indicate accelerated wage growth in the years after the naturalization. It is a question of integration policy whether this passport advantage in the assimilation process is intended. --

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Bibliographic Info

Paper provided by Hamburg Institute of International Economics (HWWI) in its series HWWI Research Papers with number 3-13.

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Date of creation: 2008
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Handle: RePEc:zbw:hwwirp:3-13

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Keywords: Naturalization; economic impact; self-selection; socioeconomic integration;

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References

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  1. DeVoretz, Don J. & Pivnenko, Sergiy, 2005. "Self-Selection, Immigrant Public Finance Performance and Canadian Citizenship," IZA Discussion Papers 1463, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Pieter Bevelander and Ravi Pendakur, 2012. "Citizenship acquisition, employment prospects and earnings: comparing two cool countries," EUI-RSCAS Working Papers 7, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  2. Otto, Alkis Henri & Steinhardt, Max Friedrich, 2012. "Immigration and election outcomes: Evidence from city districts in Hamburg," Working Paper Series 02/2012, Hamburg School of Business Administration (HSBA).
  3. Aysegul KAYAOGLU & Ayhan KAYA, 2011. "Is National Citizenship Withering Away? : Social Affiliations and Labor Market Integration of Turkish Origin Immigrants in Germany and France," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  4. Tolciu, Andreia & Schaland, Ann-Julia & El-Cherkeh, Tanja, 2010. "Migrant entrepreneurship in Hamburg: Results from a qualitative study with Turkish entrepreneurs," HWWI Research Papers 3-22, Hamburg Institute of International Economics (HWWI).
  5. Steinhardt Max Friedrich, 2011. "The Wage Impact of Immigration in Germany - New Evidence for Skill Groups and Occupations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-35, June.
  6. Albornoz-Crespo, Facundo & Cabrales, Antonio & Hauk, Esther, 2011. "Immigration and the School System," CEPR Discussion Papers 8653, C.E.P.R. Discussion Papers.
  7. Ciro Avitabile & Irma Clots-Figueras & Paolo Masella, 2013. "The Effect of Birthright Citizenship on Parental Integration Outcomes," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 777 - 810.
  8. Bevelander, Pieter & Pendakur, Ravi, 2011. "Citizenship and Employment – comparing two cool countries," CEPR Discussion Papers 8182, C.E.P.R. Discussion Papers.

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