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Does citizenship matter? The economic impact of naturalizations in Germany

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  • Max Friedrich Steinhardt

    (Centro Studi Luca d'Agliano and Hamburg Institute of International Economics)

Abstract

The paper analyzes whether citizenship acquisition affects the labor market performance of immigrants in Germany. The study uses actual micro data from the IAB employment sample, which covers more than 80% of the whole labor force in Germany. The econometric analysis is carried out using both cross-sectional and panel data techniques, which allow to disentangle the effects of self-selection and legal impact of citizenship acquisition. The estimates from a simple OLS specification suggest the existence of a wage premium of naturalized immigrants. Panel estimates show an immediate positive naturalization effect on wages and an accelerated wage growth in the years after the naturalization event. Both results are consistent with the argument that naturalization increases the labor market opportunities of immigrants in various ways.

Suggested Citation

  • Max Friedrich Steinhardt, 2008. "Does citizenship matter? The economic impact of naturalizations in Germany," Development Working Papers 266, Centro Studi Luca d'Agliano, University of Milano.
    • Handle: RePEc:csl:devewp:266
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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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