The savings behavior of immigrants in Germany [Elektronische Ressource] / vorgelegt von Mathias Sinning

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• Publié par: ruhr-universitat_bochum
• Publié le: 01 janvier 2007
• Nombre de lectures: 8
• Langue: English

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The Savings Behavior of Immigrants in Germany
Inauguraldissertation
zur
Erlangung der Wurde˜
eines Doktors der
Wirtschaftswissenschaft
der
Fakult˜at fur˜ Wirtschaftswissenschaft
der
Ruhr-Universit˜at Bochum
vorgelegt von
Diplom-Volkswirt Mathias Sinning
aus Rotenburg an der Fulda
2007Dekan: Prof. Dr. Stephan Paul
Referent: Prof. Dr. Thomas Bauer
Korreferent: Prof. Dr. Christoph Schmidt, Ph.D.
Tag der mundlic˜ hen Prufung:˜ 12. Februar 2008
ISBN 978-3-86788-039-8CONTENTS
1. Introduction and Overview 1
1.1 The German Immigration Experience { Past and Presence 2
1.2 The Current State of Discussion 7
1.2.1 The Decision to Migrate 7
1.2.2 The Economic Performance of Immigrants 8
1.2.3 The Impact of Immigration on the Labor Market 11
1.3 Contributions of the Thesis 12
2. The Savings Behavior of Temporary and Permanent Migrants
in Germany 18
2.1 Introduction 19
2.2 The Savings Difierential between Natives and Immigrants 21
2.3 Data, Econometric Method and Decomposition Analysis 23
2.3.1 Data 23
2.3.2 Econometric Method and Decomposition Analysis 29
2.4 Estimation Results 33
2.4.1 OLS and Tobit Estimates 33
2.4.2 Decomposition Analysis 35
2.4.3 The Role of Family Ties 39
2.5 Conclusions 41ii
3. Determinants of Savings and Remittances { Empirical
Evidence from Immigrants to Germany 54
3.1 Introduction 55
3.2 Determinants of Migrants’ Remittances 57
3.3 Empirical Strategy and Data 60
3.4 Results 66
3.4.1 Savings and Other Transfers 67
3.4.2 Transfers to Persons Abroad 71
3.5 Conclusions 74
4. A Comparative Analysis of the Nativity Wealth Gap 78
4.1 Introduction 79
4.2 The Nativity Wealth Gap 81
4.3 Institutional Setting 83
4.3.1 Immigration Policy 83
4.3.2 Labor Markets 85
4.3.3 Financial and Housing Markets 86
4.3.4 Welfare and Pension Systems 87
4.4 Data and Descriptive Analysis 90
4.4.1 Data Sources 90
4.4.2 The Level of Net Worth 91
4.4.3 Determinants of Net Worth 98
4.5 Decomposition of the Wealth Gap 101
4.5.1 Decomposition Method 101
4.5.2 Decomposition Results 103
4.6 Conclusions and Directions for Future Research 108iii
5. Wealth and Asset Holdings of Immigrants in Germany 117
5.1 Introduction 118
5.2 Wealth and Asset Holdings of Immigrants 120
5.3 Data and Descriptive Analysis 122
5.3.1 Data 122
5.3.2 Multiple Imputation of Wealth Components 123
5.3.3 Descriptive Statistics 124
5.3.4 Determinants of Net Worth Components and Diversiflcation 127
5.4 Decomposition Analysis 132
5.4.1 Empirical Strategy 132
5.4.2 Decomposition Results 133
5.5 Conclusions 138
6. Home-ownership and Economic Performance of Immigrants in
Germany 146
6.1 Introduction 147
6.2 Home-ownership, Assimilation and Housing Quality 149
6.2.1 The Home-ownership Gap 149
6.2.2 The Assimilation Process 151
6.2.3 Housing Quality 153
6.3 Empirical Strategy and Description of Data 153
6.3.1 Home-ownership Gap and Assimilation 156
6.3.2 Housing Quality 159
6.4 Empirical Results 162
6.5 Conclusions 169
7. Summary and Conclusions 174
Bibliography 179
Acknowledgements 1931. INTRODUCTION AND OVERVIEW
As a result of the increasing relevance of international migration, the integration
of immigrant minorities into the society of their host country has become a mat-
ter of intense debate among economists and policy makers in many immigration
countries worldwide. Following the seminal contribution by Chiswick (1978), the
literature on the economic performance of immigrants has largely concentrated on
the extent to which labor market outcomes (e.g., earnings and employment status)
of immigrants vary over the settlement process (Borjas, 1994; Zimmermann, 2005).
Despite its importance, only a few contributions rely on more long-run indicators of
the overall economic well-being, such as savings rates, wealth and asset holdings, or
home-ownership (Amuedo-Dorantes and Pozo, 2002; Cobb-Clark and Hildebrand,
2006a; Borjas, 2002). Such long-run indicators of economic integration, however,
may provide additional insights to the integration process of migrants, because they
do not only measure current integration but also allow to draw inferences about the
future economic situation of immigrant minorities.
An investigation of the wealth accumulation behavior of immigrants is particularly
relevant with respect to the economic and social consequences of population aging.
In the coming decades, many industrialized countries will experience a dramatic
expansion in the proportion of the population over the age of 65 along side a con-
stant, or in some countries even declining, workforce-age population (Gruber and
Wise, 2001; Visco, 2001). As a result of the demographic change, private savings
have become increasingly relevant in many countries with a pay-as-you-go pension
system to supplement public pensions after retirement.
In this thesis, the savings behavior and the resulting wealth position of immigrants
are being investigated. The empirical analysis focuses predominantly on the immi-
grant population in Germany but also comprises international comparisons. The1. Introduction and Overview 2
aim of this introductory chapter is to provide a general motivation for this analy-
sis. Section 1.1 brie y describes the German immigration experience since World
War II and outlines the current situation. A brief overview of the current state of
discussion of the economic migration literature is provided inSection 1.2. Finally,
Section 1.3 clarifles the contributions of this thesis to the economic literature and
summarizes the main flndings and implications of the succeeding chapters.
1.1 The German Immigration Experience { Past and Presence
This section outlines the West German immigration experience after World War II
and describes the current immigrant population in Germany with respect to three
important dimensions: (i) ethnic composition, (ii) age structure, and (iii) period of
immigration. It will become transparent that a substantial share of the immigrant
workforce is reaching retirement age in the coming decades.
GermanyhasbeenamajorimmigrationcountryinWesternEuropeeversinceWorld
War II, although the composition and magnitude of immigration ows varied sub-
stantially over time. Schmidt and Zimmermann (1992) difierentiate four phases of
migration to Germany: (i) the war adjustment phase (1950-1961), (ii) the man-
power recruitment phase (1962-1973), (iii) the consolidation phase (1974-1988) and
(iv)thedissolutionofsocialismanditsaftermath(since1988). Figure1.1presents
the gross immigration and emigration ows and the net migration ow in Germany
1from 1950 to 2006.
In the flrst period after the Second World War until 1950, 11.5 million Germans
relocated from Eastern Europe, with about eight million coming to West Germany
(Schmidt and Zimmermann, 1992). While the Western part of Germany experi-
enced substantial immigration streams after this period, the eastern part received
only moderate numbers of immigrants. In the 1950s, ethnic Germans from Eastern
Europe and Germans originating directly from the eastern part of Germany moved
toWestGermany(Schmidt,1996). Between1950andtheconstructionoftheBerlin
Wall in 1961, 2.6 million Germans relocated from East to West Germany (Schmidt
and Zimmermann, 1992).
1 Bauer et al. (2005a) provide a detailed description of the migration ows to Germany since
the Second World War.1. Introduction and Overview 3
The second period from 1962 to 1973 was characterized by labor migration. West
Germany pursued a policy of active \guest worker" recruitment to flll an acute
shortage of low-skilled labor. A guest worker system was established by means of a
series of recruitment treaties with several South European countries (Greece, Italy,
Portugal, Spain, Turkey, and Yugoslavia), as well as Morocco and Tunisia to retain
the manufacturing-led growth performance of the German economy (Zimmermann,
1995; Fertig and Schmidt, 2002). Although the guest workers were expected to re-
turn to their countries of origin after their contracts expired, many of them decided
to stay in Germany permanently (Bauer et al., 2005a).
Figure 1.1: Gross and net migration ows from 1950 to 2006
I II III IV
1950 1961 1973 1989 2000
Year
Immigration Emigration
Net migration flow
Note.{Source: Statistisches Bundesamt, Fachserie 1, Reihe 1.2 (I: War adjustment, II: Manpower
recruitment, III: Consolidation, IV: Aftermath of socialism).
As a result of the flrst oil crises and the beginning of a recession, active recruitment
of guest workers was halted and immigration to Germany was restrained in 1973.
This third period of immigration to Germany lasted until 1988. During this period,
familyreuniflcationandasylumbecamethetwomajorchannelsoflegalimmigration.
These channels and the higher fertility rate of immigrants were responsible for an
increase in the foreign population between 1973 and 1988 (Bauer et al., 2005a).
−500000 0 500000 10000001. Introduction and Overview 4
The fourth period of immigration to Germany started in 1989 with the dissolution
of socialism, leading to an in ow of immigrants from Central and Eastern Europe.
A sizeable part of these immigrants were ethnic Germans. At the same time, Ger-
many experienced a strong in ow of refugee