Transferability of Human Capital and Immigrant Assimilation: An Analysis for Germany
37 Pages Posted: 23 Jul 2014
Date Written: July 2014
This paper investigates the transferability of human capital across countries and the contribution of imperfect human capital portability to the explanation of the immigrant-native wage gap. Using data for West Germany, our results reveal that, overall, education and in particular labor market experience accumulated in the home countries of the immigrants receive signifiantly lower returns than human capital obtained in Germany. We further find evidence for heterogeneity in the returns to human capital of immigrants across countries. Finally, imperfect human capital transferability appears to be a major factor in explaining the wage differential between natives and immigrants.
Keywords: Human Capital, Rate of Return, Immigration, Assimilation
JEL Classification: J61, J31, J24
Suggested Citation: Suggested Citation