How do new immigration flows affect existing immigrants? Evidence from the refugee crisis in Germany

50 Pages Posted: 30 Jun 2019 Last revised: 24 Jun 2020

See all articles by Sumit S. Deole

Sumit S. Deole

TU Dortmund University

Yue Huang

Institute for Labour Law and Industrial Relations in the European Union (IAAEU); Otto von Guericke University Magdeburg

Date Written: June 24, 2020

Abstract

We apply difference-in-differences regressions to study the impact of the 2015 refugee crisis in Germany on the culturally closer diaspora of existing immigrants originating from Turkey and Middle-Eastern and North-African countries (TMENA). Our identification allows us to emphasize the role of immigrants' culture in estimating immigration's socio-economic impact. Additionally, we distinguish between the labor demand and labor supply effects associated with immigration, which enables us to reflect on the ambiguous labor market impact of immigration suggested in the existing literature. In particular, we find that TMENA immigrants experienced a substantial reduction in unemployment in 2015, consistent with the differential demand shock induced by refugees' consumption of culturally similar goods and services. However, the unemployment effects dissipated starting in 2016, coinciding with refugees' delayed yet incremental labor market integration. We also consider the social impact of the refugee crisis and find that while worries about immigration increased among all respondents, the increases were statistically significantly smaller among TMENA immigrants, primarily due to their cultural proximity to arriving refugees. Our results suggest that TMENA immigrants' assimilation of German identity was unaffected by the refugee crisis.

Keywords: European refugee crisis, existing immigrants, socio-economic assimilation

JEL Classification: F22, J15, Z13

Suggested Citation

Deole, Sumit S. and Huang, Yue, How do new immigration flows affect existing immigrants? Evidence from the refugee crisis in Germany (June 24, 2020). Available at SSRN: https://ssrn.com/abstract=3364152 or http://dx.doi.org/10.2139/ssrn.3364152

Sumit S. Deole (Contact Author)

TU Dortmund University ( email )

Friedrich-Wöhler-Weg 6
Dortmund, 44227
Germany

Yue Huang

Institute for Labour Law and Industrial Relations in the European Union (IAAEU) ( email )

Behringstr. 21
Campus II, Building H, 7. Floor
Trier, DE 54296
Germany

Otto von Guericke University Magdeburg ( email )

Germany

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