German labour market outcomes of cohorts of immigrants over time : A forecast of the employment of recent cohorts based on earlier newcomers

Sammanfattning: It has been noticed that throughout the years, immigrant’s skills, knowledge, and experience have declined. In fact, researchers have noticed the presence of cohort effects, where there are differences in quality and skills across the immigrants. Using data from the German Socio-Economic Panel and through an out-of-sample forecast of the employment of recent cohorts based on how earlier newcomers performed, I can confirm that, over time, immigrants see their probability of being employed decrease. For instance, employment decreased from 99% for immigrants that arrived in Germany in 2010 to 92% for those that came in 2015. The linear probability model also highlights that not only human capital influences directly employment levels of immigrants. Undeniably, the region of origin and the immigrants’ duration of residence in Germany also impact the likelihood of finding a paid job. Therefore, cohort effects cannot only be justified by the fact that newly arrived immigrants are very different from those who arrived some years ago.