IDEAS home Printed from https://ideas.repec.org/p/zbw/hwwirp/3-13.html
   My bibliography  Save this paper

Does citizenship matter? The economic impact of naturalizations in Germany

Author

Listed:
  • 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.

Suggested Citation

  • Steinhardt, Max Friedrich, 2008. "Does citizenship matter? The economic impact of naturalizations in Germany," HWWI Research Papers 3-13, Hamburg Institute of International Economics (HWWI).
  • Handle: RePEc:zbw:hwwirp:3-13
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/48189/1/664193455.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dustmann, Christian & Glitz, Albrecht & Vogel, Thorsten, 2010. "Employment, wages, and the economic cycle: Differences between immigrants and natives," European Economic Review, Elsevier, vol. 54(1), pages 1-17, January.
    2. DeVoretz, Don J., 2006. "The Economics of Citizenship: A Common Intellectual Ground for Social Scientists?," IZA Discussion Papers 2392, Institute of Labor Economics (IZA).
    3. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110, National Bureau of Economic Research, Inc.
    4. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    5. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    6. Francesca Mazzolari, 2009. "Dual citizenship rights: do they make more and richer citizens?," Demography, Springer;Population Association of America (PAA), vol. 46(1), pages 169-191, February.
    7. Steinhardt, Max Friedrich, 2007. "Aktuelle Trends der Einbürgerungen in Deutschland," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 87(8), pages 544-549.
    8. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x.
    9. Nijman, Theo & Verbeek, Marno, 1992. "Nonresponse in Panel Data: The Impact on Estimates of a Life Cycle Consumption Function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(3), pages 243-257, July-Sept.
    10. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
    11. Bernt Bratsberg & James F. Ragan & Zafar M. Nasir, 2002. "The Effect of Naturalization on Wage Growth: A Panel Study of Young Male Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 20(3), pages 568-597, July.
    12. Hailbronner, Kay, 2007. "Diversity in the labour market: The legal framework and support services for migrant workers in Germany," HWWI Policy Papers 3-4, Hamburg Institute of International Economics (HWWI).
    13. DeVoretz, Don J. & Pivnenko, Sergiy, 2005. "Self-Selection, Immigrant Public Finance Performance and Canadian Citizenship," IZA Discussion Papers 1463, Institute of Labor Economics (IZA).
    14. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, November.
    15. Kaas Leo & Manger Christian, 2012. "Ethnic Discrimination in Germany’s Labour Market: A Field Experiment," German Economic Review, De Gruyter, vol. 13(1), pages 1-20, February.
    16. DeVoretz, Don J. & Pivnenko, Sergiy, 2004. "The Economic Causes and Consequences of Canadian Citizenship," IZA Discussion Papers 1395, Institute of Labor Economics (IZA).
    17. Locke, John, 1690. "Two Treatises of Government," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number locke1690a.
    18. Bevelander, Pieter & Veenman, Justus, 2006. "Naturalisation and Socioeconomic Integration: The Case of the Netherlands," IZA Discussion Papers 2153, Institute of Labor Economics (IZA).
    19. Mazzolari, Francesca, 2007. "Dual Citizenship Rights: Do They Make More and Better Citizens?," IZA Discussion Papers 3008, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edo Anthony, 2015. "The Impact of Immigration on Native Wages and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1151-1196, July.
    2. Engdahl, Mattias, 2014. "Naturalizations and the economic and social integration of immigrants," Working Paper Series, Center for Labor Studies 2014:6, Uppsala University, Department of Economics.
    3. Engdahl, Mattias, 2014. "Naturalizations and the economic and social integration of immigrants," Working Paper Series 2014:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Bevelander, Pieter & Spång, Mikael, 2014. "From Aliens to Citizens: The Political Incorporation of Immigrants," IZA Discussion Papers 7920, Institute of Labor Economics (IZA).
    5. Jonas Helgertz & Pieter Bevelander & Anna Tegunimataka, 2014. "Naturalization and Earnings: A Denmark–Sweden Comparison," European Journal of Population, Springer;European Association for Population Studies, vol. 30(3), pages 337-359, August.
    6. Fougère, Denis & Safi, Mirna, 2008. "The Effects of Naturalization on Immigrants’ Employment Probability (France, 1968–1999)," IZA Discussion Papers 3372, Institute of Labor Economics (IZA).
    7. Denis Fougère & Mirna Safi, 2009. "Naturalization and employment of immigrants in France (1968-1999)," International Journal of Manpower, Emerald Group Publishing, vol. 30(1/2), pages 83-96, March.
    8. Ebner, Christian & Helbling, Marc, 2016. "Social distance and wage inequalities for immigrants in Switzerland," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 436-454.
    9. Das, Tirthatanmoy & Polachek, Solomon, 2017. "Micro Foundations of Earnings Differences," IZA Discussion Papers 10922, Institute of Labor Economics (IZA).
    10. Knize Estrada, Veronika J., 2018. "Migrant women labor-force participation in Germany : Human capital, segmented labor market, and gender perspectives," IAB-Discussion Paper 201812, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Fraga, Eduardo & Gonzaga, Gustavo & Soares, Rodrigo R., 2017. "Selection on Ability and the Early Career Growth in the Gender Wage Gap," IZA Discussion Papers 10791, Institute of Labor Economics (IZA).
    12. Boll, Christina & Lagemann, Andreas, 2018. "Das Erwerbsverhalten von Eltern mit Migrationshintergrund: SOEP-basierte Befunde und deren Implikationen für Hamburg," HWWI Policy Papers 112, Hamburg Institute of International Economics (HWWI).
    13. Sami Napari, 2008. "The Early‐career Gender Wage Gap among University Graduates in the Finnish Private Sector," LABOUR, CEIS, vol. 22(4), pages 697-733, December.
    14. Appleton, Simon & Song, Lina & Xia, Qingjie, 2005. "Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 644-663, December.
    15. Oskar Skans & Linus Liljeberg, 2014. "The wage effects of subsidized career breaks," Empirical Economics, Springer, vol. 47(2), pages 593-617, September.
    16. Boris Hirsch & Marion König & Joachim Möller, 2013. "Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(4), pages 412-439, September.
    17. Aysegul KAYAOGLU & Ayhan KAYA, 2011. "Is National Citizenship Withering Away? : Social Affiliations and Labor Market Integration of Turkish Origin Immigrants in Germany and France," LIDAM Discussion Papers IRES 2011033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    18. Christina Gathmann & Ole Monscheuer, 2020. "Naturalization and citizenship: Who benefits?," IZA World of Labor, Institute of Labor Economics (IZA), pages 125-125, April.
    19. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early‐career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    20. Polachek, Solomon & Xiang, Jun, 2005. "The Effects of Incomplete Employee Wage Information: A Cross-Country Analysis," IZA Discussion Papers 1735, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Naturalization; economic impact; self-selection; socioeconomic integration;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:hwwirp:3-13. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/hwwiide.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/hwwiide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.