Social Contacts and the Economic Performance of Immigrants: A Panel Study of Immigrants in Germany

Using data from the German Socio-Economic Panel, we examined the impact of social contacts on immigrant occupational status and income. In addition to general social contacts, we also analyzed the effects of bonding (i.e., co-ethnic) and bridging (i.e., interethnic) ties on economic outcomes. Results show that general social contacts have a positive effect on the occupational status and, in particular, annual income of immigrants. We also find that bridging ties with Germans lead to higher occupational status, but not to increased income. These effects remain visible even when social contacts are measured (at least) one year prior to the economic outcomes, as well as when earlier investments in German human capital are considered. Finally, we show that co-ethnic concentration in the region of residence weakly affects economic returns to German language proficiency and schooling

The role of social contacts in the employment status of immigrants: A panel study of immigrants in Germany

Item does not contain fulltextSeveral studies in the migration literature have hypothesized that social contacts, in particular contacts with natives, are important for immigrant employment. Empirical work, however, has been inconclusive whether social contacts indeed have a causal effect. This study uses the German Socio-Economic Panel (1984—2004) to estimate the effect of social contacts of male and female immigrants on their employment position. Results show that contacts with family, friends and neighbours and being active as a volunteer have no significant effect on employment for both immigrant men and women. It is also found that having contacts with Germans increases the likelihood of male and female employment. The positive effect of having German contacts remains when social contacts are lagged, when host-country human capital is taken into account and also when unmeasured time-constant characteristics of immigrants are considered.28 p