Returns to Citizenship? Evidence from Germany's Recent Immigration Reforms

59 Pages Posted: 5 Apr 2014

See all articles by Christina Gathmann

Christina Gathmann

Luxembourg Institute for Socio-Economic Research; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Nicolas Keller

Heidelberg University

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Abstract

Immigrants in many countries have lower employment rates and lower earnings than natives. In this paper, we ask whether a more liberal access to citizenship can improve the economic integration of immigrants. Our analysis relies on two major immigration reforms in Germany, a country with a relatively weak record of immigrant assimilation. For identification, we exploit discontinuities in the reforms' eligibility rules. Between 1991 and 1999, adolescents could obtain citizenship after eight years of residency in Germany, while adults faced a 15-year residency requirement. Since 2000, all immigrants face an 8-year residency requirement. OLS estimates show a positive correlation between naturalization and labor market performance. Based on the eligibility rules, we find few returns of citizenship for men, but substantial returns for women. Returns are also larger for more recent immigrants, but essentially zero for traditional guest workers. Overall, liberalization of citizenship provides some benefits in the labor market but is unlikely to result in full economic and social integration of immigrants in the host country.

Keywords: citizenship, assimilation, language, welfare, Germany

JEL Classification: J24, J31, J61, K37

Suggested Citation

Gathmann, Christina and Keller, Nicolas, Returns to Citizenship? Evidence from Germany's Recent Immigration Reforms. IZA Discussion Paper No. 8064, Available at SSRN: https://ssrn.com/abstract=2420709

Christina Gathmann (Contact Author)

Luxembourg Institute for Socio-Economic Research ( email )

11, Porte des Sciences
Campus Belval – Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Munich, DE-81679
Germany

HOME PAGE: http://www.stanford.edu/~cgathman

Nicolas Keller

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

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