Does Citizenship Matter? The Economic Impact of Naturalizations in Germany

Centro Studi Luca d'Agliano Development Studies Working Paper No. 266

25 Pages Posted: 17 Nov 2008

See all articles by Max Friedrich Steinhardt

Max Friedrich Steinhardt

Free University of Berlin (FUB) - Department of Business and Economics; IZA Institute of Labor Economics; Centro Studi Luca D'Agliano (LdA); Hamburg Institute of International Economics (HWWI)

Date Written: November 12, 2008

Abstract

The paper analyzes whether citizenship acquisition affects the labor market performance of immigrants in Germany. The study uses actual micro data from the IAB employment sample, which covers more than 80% of the whole labor force in Germany. The econometric analysis is carried out using both cross-sectional and panel data techniques, which allow to disentangle the effects of self-selection and legal impact of citizenship acquisition. The estimates from a simple OLS specification suggest the existence of a wage premium of naturalized immigrants. Panel estimates show an immediate positive naturalization effect on wages and an accelerated wage growth in the years after the naturalization event. Both results are consistent with the argument that naturalization increases the labor market opportunities of immigrants in various ways.

Keywords: Naturalization, self-selection, socioeconomic integration

JEL Classification: J31, J61, J68

Suggested Citation

Steinhardt, Max Friedrich, Does Citizenship Matter? The Economic Impact of Naturalizations in Germany (November 12, 2008). Centro Studi Luca d'Agliano Development Studies Working Paper No. 266, Available at SSRN: https://ssrn.com/abstract=1295995 or http://dx.doi.org/10.2139/ssrn.1295995

Max Friedrich Steinhardt (Contact Author)

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