Business Intelligence

Social Contacts And The Economic Performance Of Immigrants: A Panel Study Of Immigrants In Germany

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Executive Summary

Using data from the German Socio-Economic Panel, the authors examined the impact of social contacts on immigrant occupational status and income. In addition to general social contacts, they also analyzed the effects of bonding (i.e., co-ethnic) and bridging (i.e., interethnic) 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. They 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) one year prior to the economic outcomes, as well as when earlier investments in German human capital are considered.

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