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Intergenerational Mobility of Immigrants in Germany: Moving with Natives or Stuck in their Neighborhoods?

  • Yuksel, Mutlu

    ()

    (Dalhousie University)

In this paper, I analyze intergenerational mobility of immigrants and natives in Germany. Using the German Socioeconomic Panel (GSOEP), I find intergenerational elasticities that range from 0.19 to 0.26 for natives and from 0.37 to 0.40 for immigrants. These elasticity estimates are lower than typically found for the U.S. and imply higher mobility in Germany than in the U.S. However, as in the U.S., I find greater mobility among German natives than among immigrants. Moreover, I investigate to what extent the lower mobility among immigrants in Germany is due to “ethnic capital” as suggested by Borjas (1992). I find that the impact of father’s earnings on son’s earnings remains virtually unchanged when including a measure of ethnic capital, suggesting that the higher father-son correlation found among immigrants is not due to omitting ethnic capital. However, I do find a large independent effect of ethnic capital on sons’ earnings (the coefficient is 0.81 as opposed to 0.25 found by Borjas (1992)). These results are consistent with estimates from Microcensus data, where the combined effect of parents’ and ethnic capital is close to unity. Thus, contrary to the U.S. results which suggest convergence of immigrants’ earnings towards natives’ earnings, the German results suggest divergence of immigrant earnings.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4677.

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Length: 53 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4677
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  1. Solon, Gary, 1989. "Biases in the Estimation of Intergenerational Earnings Correlations," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 172-74, February.
  2. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  3. Heisz, Andrew & Corak, Miles, 1996. "The Intergenerational Income Mobility of Canadian Men," Analytical Studies Branch Research Paper Series 1996089e, Statistics Canada, Analytical Studies Branch.
  4. Gary Solon, 2002. "Cross-Country Differences in Intergenerational Earnings Mobility," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 59-66, Summer.
  5. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
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