The role of social contacts in the employment status of immigrants A panel study of immigrants in Germany

Several studies in the migration literature have hypothesized that social contacts, in particular contacts with natives, are important for immigrant employment. Empirical work, however, has been inconclusive whether social contacts indeed have a causal effect. This study uses the German Socio-Economic Panel (1984-2004) to estimate the effect of social contacts of male and female immigrants on their employment position. Results show that contacts with family, friends and neighbours and being active as a volunteer have no significant effect on employment for both immigrant men and women. It is also found that having contacts with Germans increases the likelihood of male and female employment. The positive effect of having German contacts remains when social contacts are lagged, when host-country human capital is taken into account and also when unmeasured time-constant characteristics of immigrants are considered.