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This paper comprehensively portrays the labor market outcomes of second generation immigrants in Germany. Special attention is attributed to observable heterogeneity in terms of country of origin and unobservable heterogeneity in terms of parental human capital, neighborhood effects, and mixed marriage background. Pooled, static and dynamic panel data models, and a decomposition analysis are used to estimate and explain the average differences in hourly wages and unemployment probabilities separately for men and women. Also, relative outcomes in wages depend mainly on observable characteristics, whereas relative unemployment risks are mainly driven by unobservable factors.
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