Well-being of immigrants in Germany: country of origin and income convergence

Abstract

As of 2021, Germany is a host country for 22,3 million people with a migration background, that amounts to 26,9% of the total population of the country. Most of migrants come to Germany to improve their level of welfare, and seek for getting the same income as the locals do. The article outlines econometric modeling of the well-being of ethnic Germans and migrants living in Germany based on the statistics from the World Bank and the data from a representative longitudinal study of private households by the German Socio-Economic Panel (SOEP-Core), which covers more than 683,000 respondents for 1984-2019. Based on the SOEP data, it is possible to reveal the real socio-economic conditions surrounding both the local population and the migrants in Germany. It is concluded that respondents with migration background tend to have higher real income (a proxy for wealth) rather than their peers born in Germany. However, migrants’ real income varies significantly depending on the country of origin/birth (i. e. newcomers from Northern Europe and Africa earn the most) and has non-linear relationship with the duration of staying in Germany. Personal characteristics (age, gender) and professional qualities (education, employment status) have generally similar impact on real income both for migrants and ethnic Germans, while the effect of marital status varies case by case (i. e. married local Germans have lower real incomes than their peers, while for migrants the effect of marriage is insignificant).