Explaining Ethnic Inequality in the German Labor Market: Labor Market Institutions, Context of Reception, and Boundaries

The descendants of immigrants comprise nearly a third of the West German population under the age of 25 years and will soon become a substantial proportion of the native born labor force. Owing to the young age of this group, and a lack of governmental data on parental place of birth, there is currently little research that compares the labor market outcomes of the second generation of different origins. Exploiting the first data set to allow the disaggregation of all immigrant groups in Germany, this article draws on the concepts of context of reception and boundary crossing to explain variation in the labor market performance of different immigrant origin groups. Positively received ethnic Germans consistently perform better than negatively received guest worker origin groups. Labor market inequality is greatest among men and in obtaining employment. Ethnic differences are more compressed among women and for occupational attainment among the employed. The boundary crossing mechanisms of naturalization and intermarriage have modest association with labor market success. Findings suggest that successful integration in Germany is influenced by labor market institutions, which encourage inequality in unemployment while diminishing inequality amongst the employed.