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Naturalisation and Investments in Children's Human Capital: Evidence from a Natural Experiment

Autor: Friederike von Haaren-Giebel
Nummer: 576, May 2016, pp. 47
JEL-Class: J15, J24, I24

Abstract:
This paper assesses educational attainment of immigrant children, in particular evaluating whether naturalised parents invest more in their children's human capital than non-naturalised parents. Findings of the literature indicate that citizenship is associated with lower return migration probability. Since the returns to investments in (country-specific) human capital increase with the duration of residence, naturalised parents may have more incentives to invest in the educational success of their children. I exploit a natural experiment that took place in Germany in the year 2000 that reduced the required years of residence for naturalisation from 15 to 8 and therefore exogenously increased naturalisation. Multivariate estimations (based on the German Socio-Economic Panel) show a positive and significant correlation between parents' citizenship status and their children's educational attainment. Results of difference-in-differences and instrumental variable models are also positive but not significant.

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