Ruhr Economic Papers

Ruhr Economic Papers #630

Estimating Earnings Assimilation of Immigrants to Germany – Evidence from a Double Cohort Model

by Sarah Okoampah

RGS, UDE, 08/2016, 24 S./p., 8 Euro, ISBN 978-3-86788-732-8 DOI: 10.4419/86788732

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Abstract

Following the seminal work of Chiswick (1978), many studies have examined the extent to which earnings of immigrants vary over the settlement process. While these studies usually find that the initial earnings gap between native and immigrant workers in traditional immigration countries disappears as the duration of residence in the host country increases, empirical evidence mostly suggests that immigrants to Germany experience persistent earnings disadvantages and, if at all, only a moderate earnings assimilation process for some immigrant groups. However, due to variations in the economic performance of different immigration cohorts, estimates derived from crosssectional models may be biased (Borjas, 1985). Against this background, this paper employs a double cohort model to revisit the existing evidence on earnings assimilation processes of immigrants to Germany. In line with this literature, no evidence for a robust assimilation process for immigrants is found, even after accounting for potential cohort effects.

JEL-Classification: F22, F15, J31

Keywords: Earnings assimilation; cohort effects; international migration

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