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Several million ethnic Germans in Eastern Europe may exercise their rights to `return' to Germany in the next few years. While foreign migrants are known to have lower average earnings than native Germans, this may not apply to ethnic German migrants: it is well established that migrants' economic performance in host countries varies depending on their national origins and that the planned duration of stay affects assimilation within Germany. In Discussion Paper No. 963, Research Affiliate Christoph Schmidt uses two cross-sectional data sets collected in 1982 and 1990 to compare the performance of ethnic German migrants from Eastern Europe with those of natives and migrants from East Germany. Migrants from Eastern Europe have significant disadvantages relative to natives in terms of schooling and post-school training, while those from East Germany have average schooling and a significant advantage in post-school training. While migrants' participation behaviour resembles that of natives, after adjustment for age and education level, migrants are more likely to be unemployed. They are also less likely to obtain employment as civil servants or white-collar workers; they improve their labour market positions over the duration of their stay in terms of their distribution by labour market segment, but they appear to take some three decades to achieve parity. Achieving parity in earnings with observationally equivalent natives follows a similar pattern, starting from initial differentials of 9% for East Germans and 16% for migrants from Eastern Europe. These results contrast with similar studies of foreign guest-workers' performance, and several characteristics of ethnic German immigrants apparently facilitate their economic success. Most entered while still young, and most already possessed the necessary language skills on entry (although this does not apply to many recent and prospective `German' migrants from the East), and they acquired citizenship immediately. Overall, ethnic German migrants appear have shared in Germany's prosperity to a much greater extent than foreign guest-workers. The Economic Performance of Germany's East European Immigrants Christoph M Schmidt Discussion Paper No. 963, May 1994 (HR) |