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Immigration Policy, Labor Market Regulation and the Welfare State: A Comprehensive Look at Immigrant Labor Market Integration in Germany, Great Britain, the United States and Canada


As of 2005, 5.2% of the native born population in Germany reports a foreign born parent. A majority of “second generation” immigrants are in their early twenties to early forties, and thus represent an increasingly large proportion of the German labor force (Statistiches Bundesamt 2007). The second generation stems disproportionately from lower class backgrounds, and it represents the largest native born “foreign” population in German history. The fate of the second generation is a subject of intense concern amongst policy makers, and the fear that the second generation will develop into a socially marginalized Unterschichtung (underclass) looms large in German politics and the popular media. The question of whether the second generation will experience academic and labor market success provides a test for models of intergenerational mobility and assimilation theories.

The second generation in Germany stems from several different migration streams with diverse socioeconomic backgrounds and legal statuses. The largest group is the children of guest workers recruited from 1955-1973, labor migrants who report very little formal education and remain clustered in unskilled or semi-skilled manual jobs . The second largest group is the children of immigrants of German descent. They are granted German citizenship immediately upon arrival through Germany’s right of return, and their skill distribution is more similar to native Germans than guest workers. Finally, the remaining members of the second generation are the children of newer migrants who come from heterogeneous origins, including refugees mainly from Eastern Europe, as well as a diverse mix of workers and students primarily from the EU.

State of Current Research

Theoretically, the bulk of second generation research in Germany has drawn from the US-centered assimilation models put forth by Richard Alba , Frank Kalter , and Hermut Esser . These scholars argue that in the search for higher wages, nicer houses, and more stable employment, immigrants look beyond the limited opportunities offered through co-ethnic institutions, neighborhoods and markets. The central empirical hypothesis is that, across time and generations, the educational, occupational, and spatial distributions of immigrants and Germans (without a migration history) will converge. More recently, scholars have applied alternative models of immigrant incorporation such as segmented assimilation and “dissimilation” theories to the German case. These theories emphasize the lower class background of second generation youth, and the prejudice that immigrants and their children face from native Germans, which impedes their academic and labor market success . While assimilation theorists expect increased immigrant convergence with natives across generations, segmented assimilation and dissimilation scholars predict increased divergence, at least for a significant proportion of immigrant offspring.

Empirically, the general consensus is that the second generation fares worse than the children of native born Germans in terms of their educational attainment, employment, and occupational status, but they are also more evenly distributed throughout the educational and occupational distribution than their parents . A critical first step in interpreting this finding is identifying the cause of continued second generation disadvantage: does the second generation fare worse than children of native born Germans because they are disproportionately poor or because they are the children of immigrants? I argue that separating the effects of class reproduction experienced by both Germans and immigrants from mobility constraints that are specific to immigrants alone is a critical area of second generation research.

Prior research has not fully addressed this issue. We know that controlling for parental characteristics accounts for some of the differences between the second generation and children of the native born; however, residual disadvantage in educational, occupational and income levels remain, and these disadvantages are different for different origin groups . While common explanations for these differences include discrimination effects , origin differences in social capital and language abilities , or differences in ambition or motivation, at the moment research is not conclusive.

Two critical weaknesses limit the ability of prior research to separate the effect of class background from disadvantages stemming from an immigrant background. The first is related to German data sets—until recently, German custom was to separate immigrants and natives by nationality, rather than place of birth, which makes identifying ethnic German immigrants and their children, who are guaranteed citizenship upon arrival, impossible in governmental datasets. As a result, the majority of migration research in Germany focuses on guest workers and their children, who are unusually uniform in their lower class standing. Studies that focus solely on the children of these migrants are forced to use very general measures of class background , as there is very little variability in education or occupation amongst former guest worker immigrant parents. Without comparing the children of guest workers to children of more advantaged immigrants, it is difficult to disentangle the effect of ethnicity and immigrant background from class background.

A second difficulty is that the origin differences that are observed amongst immigrants and their children are nearly always explained at the individual level. Particularly glaring is the lack of research specifically comparing native and immigrant family environments, as these are a critical determinant of educational performance and subsequent socioeconomic attainment in Germany. Class and culture, particularly as they are transmitted across generations, impacts youth at the household level. Therefore, we need more studies that introduce household level measures of financial and social resources in order to better measure class and immigrant disadvantages.

This project will fill both the gaps outlined above. First, I describe inequality between different immigrant origin groups and natives as it is experienced at the household level, linking individual immigrant disadvantage with the experiences of children in their family environment. Second, I utilize new data sources that allow me to explicitly compare several outcomes for different second generation groups, including ethnic Germans. Below, I outline my dissertation, the contribution of each individual chapter, and my plan and timeline for analysis.

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