Homeownership and Economic Performance of Immigrants in Germany

Abstract

This paper investigates the homeownership gap between native and immigrant households in Germany, paying particular attention to the assimilation process of immigrant households. A double cohort model is derived, which circumvents the identification problem for separating age, period and cohort effects and accounts for differences in the effects. The empirical findings suggest that immigrant households are less likely to own their primary residence than comparable native households. Moreover, the duration of residence in Germany does not affect the homeownership probability of immigrants, indicating that an assimilation process in homeownership between native and immigrant households did not take place. This result is largely consistent with the German immigration policy, which has focused predominantly on short-run economic needs and has neglected long-run economic effects of immigration.