Access to Citizenship and the Economic Assimilation of Immigrants

Abstract

Immigrants in many countries have lower employment rates and earnings than natives. We analyze whether a more liberal citizenship policy improves the economic assimilation of immigrants in the host country. The empirical analysis relies on two reforms which created exogenous variation in the waiting time for citizenship across arrival year and birth cohorts. We find that faster access to citizenship improves the economic situation of immigrant women which is largely explained by a much stronger labor market attachment with higher employment rates, longer working hours and more stable jobs. Immigrants also invest more in host country-specific skills, especially vocational training and language ability. Overall, our results indicate that faster access to citizenship is a powerful policy instrument to boost economic integration in countries with traditionally restrictive citizenship policies.

Keywords: Citizenship, Assimilation, Germany

JEL Classification: J61, K37, J24, J15