Last Hired, First Fired? The Unemployment Dynamics of Male Immigrants in Germany

Abstract

This paper explores the unemployment dynamics of various immigrant groups in Germany. Several different groups are compared against the native-born population: guest workers, ethnic Germans, immigrants from the EU-15 or other western industrialized countries, non-EU immigrants and finally second-generation immigrants. Event history techniques are applied to German Socio-Economic Panel data from the second half of the 1990s. The analyses underscore the importance of human capital and labour market segmentation in the employment exclusion of immigrant populations. The study contends that the higher risk of unemployment among guest worker immigrants, more recent newcomers from outside the EU and ethnic Germans is only partially related to their inferior human capital characteristics. In fact it appears largely due to their unfavourable labour market allocation, i.e. their over-representation in occupations and economic branches particularly vulnerable during economic slowdown and restructuring. The analyses also show that unemployed immigrants, with the exception of those coming recently from EU-15 countries and second-generation immigrants, retain their outsider status even if successful in finding employment, being largely channelled into the unskilled labour market.