Immigrants and Host Country Benefit From Early Naturalisation

Liberalising access to citizenship positively affects employment opportunities for immigrants. In an international comparison, eligibility for citizenship after an even shorter period of residency results in higher earnings and more stable jobs for immigrants, as demonstrated by Prof. Christina Gathmann, Ph.D. of Heidelberg University in her study. At the same time, immigrants’ upward mobility into better-paying occupations and sectors improves. The study also indicates that the host country benefits as well in the form of higher tax revenue and less social spending, which leads to better social cohesion in the country as a whole. The essential results of the study were recently published in the journal IZA World of Labor of the Institute for the Study of Labor (IZA).

“Many European countries find it difficult to integrate immigrants into the labour market. Newcomers are more likely to be unemployed and earn less than the native population,” explains Christina Gathmann of Heidelberg University’s Alfred Weber Institute for Economics. In countries which finally liberalised citizenship requirements as Germany did, early naturalisation considerably improved immigrants’ prospects in the labour market. “Gains are higher for immigrants from poorer countries, who ‘catch up’ with immigrants from more developed countries over time,” explains Prof. Gathmann. Particular beneficiaries in Germany are women, who as non-citizens are often disadvantaged on the job market, and immigrants who came to the country in the last two decades.

The economist points out that citizenship requirements are an important policy instrument to systematically improve the economic integration of immigrants. “This is true regardless of the fact that so-called self-selection effects play a role in this context as well. While in many cases obtaining citizenship leads to labour market success, we also need to consider that better integrated immigrants are most likely to succeed anyway, and not just once they have a new passport,” explains the researcher. According to her study, the effect of naturalisation on the labour force participation of immigrants in Germany appears be more qualitative than quantitative.

Original publication:
Christina Gathmann, Naturalization and citizenship: Who benefits?, IZA World of Labor 2015 (125), doi: 10.15185/izawol.125

Christina Gathmann and Nicolas Keller, Returns to Citizenship? Evidence from Germany's Recent Immigration Reforms, IZA Discussion Papers 8064, Institute for the Study of Labor