Heterogeneous Migrant Wealth Gaps in Germany

50 Pages Posted: 3 Apr 2024

See all articles by Rudolf Faininger

Rudolf Faininger

Chemnitz University of Technology (CUT)

Svenja Flechtner

University of Siegen - School of Economic Disciplines

Date Written: March 4, 2024

Abstract

This paper investigates the migrant wealth gap in Germany using Recentered Influence Function (RIF) decomposition applied to data from the German Socio-Economic Panel of 2017. Distinguishing between migrants from high-income and low- and middle-income countries of origin, as well as between first and second-generation migrants, we find that all migrant sub-groups experience a negative wealth gap with respect to native households. Wealth disparities are notably wider for households originating from low- and middle-income countries: their raw net wealth at the mean corresponds to 32-36 percent of that of natives, whereas households originating from high-income countries possess 78-80 percent. Age differentials explain much of the wealth gap for second-generation migrants, especially from high-income countries. Income plays a minor role overall, and education is largely unimportant. Large unexplained parts remain, especially for migrants from low- and middle-income countries. We discuss several factors that may account for the unexplained parts.

Keywords: Wealth Gap, Migrants, RIF decomposition, Germany, Socio-Economic Panel (SOEP)

JEL Classification: D31, F22

Suggested Citation

Faininger, Rudolf and Flechtner, Svenja, Heterogeneous Migrant Wealth Gaps in Germany (March 4, 2024). Available at SSRN: https://ssrn.com/abstract=4746838 or http://dx.doi.org/10.2139/ssrn.4746838

Rudolf Faininger

Chemnitz University of Technology (CUT) ( email )

Svenja Flechtner (Contact Author)

University of Siegen - School of Economic Disciplines ( email )

Hoelderlinstrasse 3
57068 Siegen
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
12
Abstract Views
80
PlumX Metrics