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Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias

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  • Michael Fertig
  • Stefanie Schurer

Abstract

Heterogeneity in the ethnic composition of Germany's immigrant population renders general conclusions on the degree of economic integration difficult. Using a rich longitudinal data-set, this paper tests for differences in economic assimilation profiles of four entry cohorts of foreign-born immigrants and ethnic Germans. The importance of time-invariant individual unobserved heterogeneity and panel attrition in determining the speed of assimilation is analysed. We find evidence for heterogeneity in the assimilation profiles and for robust assimilation profiles for two entry cohorts only. Omitted variables, systematic sample attrition and the presence of second generation immigrants in the sample influence the speed of assimilation, but do not change the overall picture.

Suggested Citation

  • Michael Fertig & Stefanie Schurer, 2007. "Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias," SOEPpapers on Multidisciplinary Panel Data Research 30, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp30
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    Citations

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    Cited by:

    1. Glitz, Albrecht, 2014. "Ethnic segregation in Germany," Labour Economics, Elsevier, vol. 29(C), pages 28-40.
    2. Viola Angelini & Laura Casi & Luca Corazzini, 2015. "Life satisfaction of immigrants: does cultural assimilation matter?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(3), pages 817-844, July.
    3. Sebastian Gundel & Heiko Peters, "undated". "Assimilation and Cohort Effects for German Immigrants," Working Papers 200123, Institute of Spatial and Housing Economics, Munster Universitary.
    4. Yann Algan & Christian Dustmann & Albrecht Glitz & Alan Manning, 2010. "The Economic Situation of First and Second-Generation Immigrants in France, Germany and the United Kingdom," Economic Journal, Royal Economic Society, vol. 120(542), pages 4-30, February.
    5. Dustmann, Christian & Görlach, Joseph-Simon, 2016. "Estimating immigrant earnings profiles when migrations are temporary," Labour Economics, Elsevier, vol. 41(C), pages 1-8.
    6. Algan, Yann & Dustmann, Christian & Glitz, Albrecht & Manning, Alan, 2009. "The Economic Situation of First- and Second-Generation Immigrants in France, Germany, and the UK," IZA Discussion Papers 4514, Institute for the Study of Labor (IZA).
    7. Maani, Sholeh A. & Wang, Xingang & Rogers, Alan, 2015. "Network Effects, Ethnic Capital and Immigrants' Earnings Assimilation: Evidence from a Spatial, Hausman-Taylor Estimation," IZA Discussion Papers 9308, Institute for the Study of Labor (IZA).
    8. Hirsch, Boris & Jahn, Elke J. & Toomet, Ott & Hochfellner, Daniela, 2014. "Do better pre-migration skills accelerate immigrants' wage assimilation?," Labour Economics, Elsevier, vol. 30(C), pages 212-222.
    9. Anja Köbrich León, 2013. "Does Cultural Heritage Affect Employment Decisions: Empirical Evidence for First- and Second Generation Immigrants in Germany," SOEPpapers on Multidisciplinary Panel Data Research 553, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Florian Lehmer & Johannes Ludsteck, 2012. "Wage Assimilation of Immigrants: Which Factors Close the Gap? – Evidence from Germany," ERSA conference papers ersa12p262, European Regional Science Association.
    11. Christina Gathmann & Nicolas Keller, 2014. "Returns to Citizenship?: Evidence from Germany's Recent Immigration Reforms," SOEPpapers on Multidisciplinary Panel Data Research 656, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Anja Koebrich Leon, 2013. "Does Cultural Heritage affect Employment decisions – Empirical Evidence for Second Generation Immigrants in Germany," Working Paper Series in Economics 270, University of Lüneburg, Institute of Economics.
    13. Florian Lehmer & Johannes Ludsteck, 2015. "Wage Assimilation of Foreigners: Which Factors Close the Gap? Evidence From Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 677-701, December.
    14. Aldashev Alisher & Gernandt Johannes & Thomsen Stephan L., 2012. "The Immigrant-Native Wage Gap in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(5), pages 490-517, October.
    15. Keller, Nicolas & Gathmann, Christina & Monscheuer, Ole, 2015. "Citizenship and the Social Integration of Immigrants: Evidence from Germany's Immigration Reforms," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113184, Verein für Socialpolitik / German Economic Association.
    16. de la Rica, Sara & Glitz, Albrecht & Ortega, Francesc, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," IZA Discussion Papers 7778, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Unobserved heterogeneity; panel attrition; sample selection; fixed effects; migration;

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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