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Economic Preferences and Attitudes of the Unemployed: Are Natives and Second Generation Migrants Alike?

  • Constant, Amelie F.

    ()

    (Temple University)

  • Krause, Annabelle

    ()

    (IZA)

  • Rinne, Ulf

    ()

    (IZA)

  • Zimmermann, Klaus F.

    ()

    (University of Bonn)

In this paper we study the economic effects of risk attitudes, time preferences, trust and reciprocity while we compare natives and second generation migrants. We analyze an inflow sample into unemployment in Germany, and find differences between the two groups mainly in terms of risk attitudes and positive reciprocity. Second generation migrants have a significantly higher willingness to take risks and they are less likely to have a low amount of positive reciprocity when compared to natives. We also find that these differences matter in terms of economic outcomes, and more specifically in terms of the employment probability about two months after unemployment entry. We observe a significantly lower employment probability for individuals with a high willingness to take risks. Some evidence suggests that this result is channeled through reservation wages and search intensity.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5380.

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Length: 30 pages
Date of creation: Dec 2010
Date of revision:
Publication status: published in: International Journal of Manpower, 2011, 32 (7), 825-851
Handle: RePEc:iza:izadps:dp5380
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