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

Authors


  • Earlier versions of this paper were presented at the seminar at the Department of Economics, University of Illinois at Chicago, USA, February 2009; International Workshop: “Matching Context and Capacity: the Economic Integration of Immigrants,” Florence, Italy, June 2009; Trinity Immigration Initiative seminar, Trinity College Dublin, Ireland, February 2010.
  • Direct correspondence to Agnieszka Kanas, Department of Social Science Research Methodology, Radboud University Nijmegen, PO Box 9104, 6500 HE, Nijmegen, the Netherlands. Email: a.kanas@maw.ru.nl

Abstract

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., inter-ethnic) 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) 1 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.

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