Labour Market Outcomes of Second Generation Immigrants: How Heterogeneous Are They Really?

Melbourne Institute Working Paper No. 14/08

Date: August 2008


Stefanie Schurer


This study comprehensively portrays the labour market outcomes of second generation immigrants in Germany. Special attention is attributed to observable heterogeneity in terms of country of origin and unobservable heterogeneity in terms of parental human capital, neighbourhood effects, and mixed marriage background. Pooled, static and dynamic panel data models, and a decomposition analysis are used to estimate and explain the average differences in hourly wages and unemployment probabilities separately for men and women. The results suggest that the second generation cannot be considered as one homogeneous group: some groups perform better, equally or worse than comparable German natives. Also, relative utcomes in wages depend mainly on observable characteristics, whereas relative unemployment risks are mainly driven by unobservable factors.

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