High Unemployment in Germany: Why do Foreigners Suffer Most?

Arbeitspapier

In Germany, immigrant unemployment is not only higher than native unemployment; italso reacts more to changes in the situation on the labor market. Decomposing the gapbetween native and immigrant unemployment into a baseline and a labor-marketsituation component, I find that the unemployment rate of immigrants would lie at 5.6 percentagepoints for zero native unemployment (the baseline component of the gap). Anincrease in overall unemployment by 1 percentage point leads to a 0.7 percentage pointshigher increase in immigrant unemployment than in native unemployment (the situationcomponent). The large part of this difference, about 3/4 of the baseline and 4/5 of thesituation component, can be explained by differences in the endowments with classicalhuman capital (educational degrees and experience) between immigrants and natives.Also controlling for country-specific human capital, particularly language skills, thesituation component becomes insignificant and the baseline effect again decreases by1/2. Adding controls for social networks, the baseline effect also becomes insignificant.Thus, human capital and social networks can possibly fully explain the differencebetween native and immigrant unemployment in Germany.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ifo Working Paper ; No. 90

Classification and Topics

• Classification: Wirtschaft ; International Migration ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Geographic Labor Mobility; Immigrant Workers ; Unemployment: Models, Duration, Incidence, and Job Search ; Labor Discrimination
• Subject: Immigration ; integration ; unemployment ; human capital ; language skills ; discrimination ; social networks ; Migranten ; Arbeitslosigkeit ; Bevölkerung ; Humankapital ; Soziales Netzwerk ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Geis, Wido
• Event: Veröffentlichung
• (who): ifo Institute - Leibniz Institute for Economic Research at the University of Munich
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/73816
• Last update: 10.03.2025, 11:45 AM CET