Naturalization and labor market performance of immigrants in Germany

Abstract

Naturalization may be a relevant policy instrument affecting immigrant integration in host‐country labor markets. We study the effect of naturalization on labor market outcomes of immigrants in Germany. We apply recent survey data and exploit a reform of naturalization rules in an instrumental variable estimation. In our sample of recent immigrants, linear regression yields positive correlations between naturalization and beneficial labor market outcomes. Once we account for the endogeneity of naturalization, most coefficients decline in magnitude and lose statistical significance: male immigrants’ labor market outcomes do not benefit significantly from naturalization. Naturalization reduces the risks of unemployment and welfare dependence for female immigrants. For males and females, the propensity to hold a permanent contract increases as a consequence of naturalization. The results are robust to modifications of samples and the instrument.

Determinants of welfare benefit use of immigrant groups - longitudinal evidence from Germany

“…Most notably, permanent residency or citizenship is related to a lower likelihood of welfare use (-0.086, p < 0.001). This finding corroborates previous evidence that permanent legal status or naturalization can potentially support immigrants' labor market success (Von Haaren-Giebel and Sandner, 2016;Gathmann and Keller, 2018;Riphahn and Saif, 2019). There are several possible mechanisms that may drive this relationship.…”

“…Permanent residents and citizens are significantly less likely to receive welfare benefits than temporary residents or those with a temporary refugee status. This finding is in line with previous research on the role of naturalization for labor market integration: several studies in Germany have indicated that naturalization can lead to positive labor market outcomes (Von Haaren-Giebel and Sandner, 2016;Gathmann and Keller, 2018;Riphahn and Saif, 2019;Brunow and Jost, 2021). However, the labor market implications of permanent residency have received little scholarly attention.…”

“…Dustmann (1993) theorizes that immigrants are more likely to invest in host-country human capital if they can expect to remain in the destination country, potentially reducing the long-term risk of welfare receipt (Dustmann, 1993;Duleep and Regets, 1999;Cortes, 2004). Naturalization or permanent residency can also indicate to employers that immigrants intend to remain permanently in Germany, thus making them more attractive hires (Von Haaren-Giebel and Sandner, 2016;Riphahn and Saif, 2019). Finally, while temporary residents receive only conditional labor market access, permanent residents and recognized refugees are generally able to take any job (Etzold, 2017;Gathmann and Keller, 2018;Brunow and Jost, 2021).…”

Misreporting of program take-up in survey data and its consequences for measuring non-take-up: new evidence from linked administrative and survey data

“…The mechanisms of these groups' underreporting program take-up are different and individually plausible. Because German naturalization rules require that applicants should be able to support themselves and do not rely on social transfers or meanstested benefits, there may be a high perceived cost connected to admitting benefit receipt for immigrants (see, e.g., Riphahn and Saif 2019). Also, households who are close to the labor market, e.g., higher educated and younger persons, may suffer from (perceived) stigma effects and work the hardest to avoid transfer dependence.…”

Immigration Status Uncertainty and Mental Health—Evidence from Brexit

“…Our paper also contributes to literature going back to Chiswick (1978) focusing on the integration of immigrants and the role naturalization and other changes in immigration status play for this process. Later studies for the United States and Canada (e.g., Bratsberg and Ragan 2002; DeVoretz 2008; DeVoretz and Pivenko 2005; Mazzolari 2009) and European countries (Kogan 2003, for Austria and Sweden; Bevelander and Veenman 2008, for the Netherlands, Scott 2008, for Sweden and Steinhardt 2012; Gathmann and Keller 2017; Riphahn and Saif 2019, for Germany) have focused on citizenship acquisition and found mixed effects on economic outcomes. In addition, related literatures have focused on non‐labor market consequences of naturalization.…”