On the Location Choice of Newly Arrived Immigrants in Germany

Carsten Pohl, IFO Institute for Economic Research, Dresden Branch

The aging and the shrinkage of the population in Germany will come along with (regional) shortages in the labor force. Since immigration might mitigate the decline of the labor supply I study the initial location choice of newly arrived foreign-born using micro data from the German Socio-Economic Panel (1991-2004) as well as macro data from official statistics. As a main result, I find that migration networks in Western Germany have a significant impact on the probability of incoming foreign-born originating in the same source country to move to these ethnic clusters. In contrast, in Eastern Germany only concrete social ties between former and newly arrived foreign-born positively influence the probability of incoming immigrants to locate in the same region.