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Immigrant-native gap in risk and time preferences in Germany: Levels, socio-economic determinants, and recent changes

Author

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  • Deole, Sumit S.
  • Rieger, Marc Oliver
Abstract
We present new descriptive evidence on the immigrant-native gap in risk and time preferences in Germany, one of the most preferred host countries for immigration. Using the recent waves of the Socio-Economic Panel (SOEP) dataset, we find that the immigrant-native gap in risk preferences has widened for recent immigration cohorts, especially around the 2015 European Refugee Crisis. We attribute the recent widening to decreased assimilation rates of new immigrants caused by a reduced integration due to sudden increases in immigrants flows from culturally diverse parts of the world, particularly around the year 2015. We also find that the immigrant-native gap varies across different migrant groups: "Opportunity seekers", which we define as economic immigrants who intend to stay in Germany only temporarily, are very similar in their risk preferences to natives. Other immigrants, however, are substantially more risk-averse than natives. A smaller gap in risk preferences is also found among migrants who are female, highly educated, proficient in the host language, self-employed and working in predominantly high-skilled jobs. Concerning time preferences, although a noticeably large immigrant-native gap is evident, the gap is not found to vary across most individual-level socio-economic variables.

Suggested Citation

  • Deole, Sumit S. & Rieger, Marc Oliver, 2022. "Immigrant-native gap in risk and time preferences in Germany: Levels, socio-economic determinants, and recent changes," GLO Discussion Paper Series 1055, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1055
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    Cited by:

    1. Zhan, Crystal & Deole, Sumit, 2022. "Economic Preferences and the Self-selection of Immigrants," GLO Discussion Paper Series 1156, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Risk aversion; time discounting; immigration; assimilation;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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