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Estimating earnings assimilation of immigrants to Germany: Evidence from a double cohort model

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  • Okoampah, Sarah
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    Following the seminal work of Chiswick (1978), many studies have examined the extent to which earnings of immigrants vary over the settlement process. While these studies usually find that the initial earnings gap between native and immigrant workers in traditional immigration countries disappears as the duration of residence in the host country increases, empirical evidence mostly suggests that immigrants to Germany experience persistent earnings disadvantages and, if at all, only a moderate earnings assimilation process for some immigrant groups. However, due to variations in the economic performance of different immigration cohorts, estimates derived from crosssectional models may be biased (Borjas, 1985). Against this background, this paper employs a double cohort model to revisit the existing evidence on earnings assimilation processes of immigrants to Germany. In line with this literature, no evidence for a robust assimilation process for immigrants is found, even after accounting for potential cohort effects.

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    Paper provided by RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen in its series Ruhr Economic Papers with number 630.

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    Date of creation: 2016
    Handle: RePEc:zbw:rwirep:630
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    1. Basilio, Leilanie & Bauer, Thomas K., 2010. "Transferability of Human Capital and Immigrant Assimilation: An Analysis for Germany," IZA Discussion Papers 4716, Institute for the Study of Labor (IZA).
    2. Schmidt, Christoph M., 1997. "Immigrant performance in Germany: Labor earnings of ethnic German migrants and foreign guest-workers," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(Supplemen), pages 379-397.
    3. 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.
    4. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-489, October.
    5. Friedberg, Rachel M, 2000. "You Can't Take It with You? Immigrant Assimilation and the Portability of Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 221-251, April.
    6. Fertig, Michael & Schurer, Stefanie, 2007. "Labour Market Outcomes of Immigrants in Germany – The Importance of Heterogeneity and Attrition Bias," Ruhr Economic Papers 20, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. 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).
    8. Schmidt, Christoph M, 1993. "The Earnings Dynamics of Immigrant Labour," CEPR Discussion Papers 763, C.E.P.R. Discussion Papers.
    9. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, October.
    10. Pischke, Jörn-Steffen, 1992. "Assimilation and the earnings of guestworkers in Germany," ZEW Discussion Papers 92-17, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(2), pages 153-168, May.
    12. Dowell Myers & Seong Lee, 1996. "Immigration cohorts and residential overcrowding in southern California," Demography, Springer;Population Association of America (PAA), vol. 33(1), pages 51-65, February.
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