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Income Composition and Redistribution in Germany: The Role of Ethnic Origin and Assimilation

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  • Felix Büchel
  • Joachim R. Frick

Abstract

This paper deals with the relative economic performance of immigrants compared to the native born population in Germany. We compare pre and post-government income, using data from the German Socio-Economic Panel from 1995 to 1997. We categorize six population subgroups by the ethnicity of the adult household members: native-born West Germans, East Germans, "pure" Aussiedler (ethnic German immigrants), "pure" non-ethnic German foreign immigrants, and "mixed" immigrants, either Aussiedler or foreign, living with an adult native-born German. Our results show that immigrants are quite heterogeneous with respect to their economic performance but, overall, non-ethnic German immigrants are net payers to the social security system. The two subgroups substantially benefiting from the income redistribution are "pure" Aussiedler and East Germans. By this measure, immigrants of non-German nationality are not an economic burden to the native-born population.

Suggested Citation

  • Felix Büchel & Joachim R. Frick, 2001. "Income Composition and Redistribution in Germany: The Role of Ethnic Origin and Assimilation," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 135-145.
    • Handle: RePEc:diw:diwvjh:70-10-20
    DOI: 10.3790/vjh.70.1.135
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    Cited by:

    1. Joachim Frick & Jan Goebel, 2008. "Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach," Regional Studies, Taylor & Francis Journals, vol. 42(4), pages 555-577.
    2. Umut Unal & Bernd Hayo & Isil Erol, 2022. "The Effect of Immigration on the German Housing Market," MAGKS Papers on Economics 202238, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. John A. Bishop & K. Victor Chow & Feijun Luo & Lester A. Zeager, "undated". "Changes in Economic Advantage by National Origin After German Unification," Working Papers 0206, East Carolina University, Department of Economics.
    4. Lubomira Anastassova & Teodora Paligorova, 2005. "Why Immigrants Manage to Grab More SocialBenefits? Empirical Cross - Country Analysis," CERGE-EI Working Papers wp263, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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