This paper reviews the existing literature on ethnic inequality and discrimination in the labor market, to then analyze the economic performance of various ethnic groups in Germany and the UK. Main findings are that in the UK the immigrant population as a whole performs similarly to the natives; however, breaking the former down by ethnic origin reveals great differences in the labor market success, including groups that are outperforming the indigenous population. In contrast, the immigrant population in Germany achieves lower than the natives. In Germany, most of those differences can be attributed to an overall rather low-skilled immigrant sample. In contrast to that the UK, due to a more liberal welfare system and tougher immigrant selection policies, has a greater tradition of attracting high-skilled immigrants as well.
Increased immigrant populations in the UK and Germany have been seen during the last decades. Different historical reasons were the beginning of these migrant flows entering those countries, generating sometimes controversial debates. Integration was often not very successful. The best example for that was the letter that became public, written by teachers from the Rütli-Schule in Berlin Neukölln. In this letter they ask for help and described the situation in their school: an aggressive atmosphere, ignorance, missing respect, willingness to be violent: doors were kicked in, misused bins etc. These were only a couple of the words they used in their letter.
[...] A positive attitude in terms of open-mindedness, willingness to integrate and give up prejudice among the entire population, native and non-native is needed to get significant positive results Conclusion After having analyzed the situations in Germany and the UK more closely the following were the main findings: Germany's immigrant population is still heavily characterized by former guest-worker and their descendants as well as ethnic Germans. The underperformance of German immigrants is mostly due to their low skill levels, but also consequences of segregation, poor German language skills and non-economic migrants, those that followed their families. [...]
[...] Additionally, with increasing duration of their stay in Germany, immigrants were entitled to unemployment benefits, social security and children's allowances. A - due to family reunifications - still increasing number of immigrants, especially Turkish people, became a growing problem for Germany in terms of infrastructure and integration especially in the face of raising immigrant unemployment. Nevertheless, for humanitarian reasons nobody was forced to leave, family reunifications were still allowed and only in exceptional cases people were not granted a residence permit. [...]
[...] The below table shows the different income levels by different immigrant groups: Source: Büchel and Frick Empirical Results: A Summary: Similarities and Differences between the two countries In terms of their immigration policies, both countries were politically driven, rather than economically, for Germany this was the case after the recruitment of the guest workers, for the UK it was a question of which races one wanted to let in the country and how to deal with commonwealth obligations. Further, both countries had some groups with privileged entry status for historical reasons. [...]
[...] Furthermore, children tend to be left alone with their problems– school-wise and others due to a lack of care from their parents and violence is also not seldom found in those homes (see for example Luft, 2006). The often resulting low educational levels of immigrant children then go on to cause low labor market performance Theories of discrimination So far I have only talked about differences in people's endowments causing different economic performances. However, as empirical research shows, even between immigrants and natives, that are comparable in terms of their characteristics, there still remains a wage gap. This might be explained by discrimination. [...]
[...] The ethnic German immigrant flow was steady at a low level, until the fall of the iron curtain in 1989, facilitating movements between the east and the west, caused a big increase in the immigration flow to Germany as shown in the following diagram. Source: Zimmermann Due to immense high immigrant numbers in the early 1990s, the German government introduced a quota for ethnic German immigrants in 1992, which allowed the entry of 200,000 people a year. The effect of this is clearly visible in the above diagram, too. [...]
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