Economic preferences and
attitudes of the unemployed
Are natives and second generation migrants
alike?
Amelie F. Constant
DIW DC, Washington, DC, USA, IZA, Bonn, Germany, and
George Washington University, Washington, DC, USA
Annabelle Krause and Ulf Rinne
IZA, Bonn, Germany, and
Klaus F. Zimmermann
IZA, Bonn, Germany, and University of Bonn, Bonn, Germany
Abstract
Purpose – The aim of this paper is to study the economic effects of risk attitudes, time preferences,
trust and reciprocity and to compare natives and second generation migrants.
Design/methodology/approach – This paper is based on the IZA Evaluation Dataset, a recently
collected survey of a representative inflow sample into unemployment in Germany. The data include a
large number of migrant-specific variables as well as information about economic preferences and
attitudes. This allows an assessment of whether and how unemployed second generation migrants
differ from unemployed natives in terms of economic preferences and attitudes.
Findings – Differences are found between the two groups mainly in terms of risk attitudes and
positive reciprocity. Second generation migrants have a significantly higher willingness to take risks
and they are less likely to have a low amount of positive reciprocity when compared to natives. It was
also found that these differences matter in terms of economic outcomes, and more specifically in terms
of the employment probability about two months after unemployment entry.
Research limitations/implications – The findings offer interesting perspectives, e.g. with regard
to the design and targeting of active labor market policy. It may be reasonable to specifically focus on
less risk averse individuals with measures such as job search requirements and monitoring.
Originality/value – This paper provides novel and direct evidence on the relationship between
economic preferences, attitudes and labor market reintegration of natives and second generation
migrants.
Keywords Unemployment, Migration, Personality traits, Risk attitudes, Time preferences, Trust,
Reciprocity, Germany, Immigrants, Ethnography
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0143-7720.htm
Financial support from the German Research Foundation (Deutsche Forschungsgemeinschaft,
DFG) for the project on “Ethnic diversity and labor market success” in the DFG-Priority Program
“Flexibility in Heterogeneous Labor Markets” (“Flexibilisierungspotenziale bei heterogenen
Arbeitsma
¨
rkten”) is gratefully acknowledged. The IAB (Nuremberg) kindly gave the authors
permission to use the administrative data employed in this study in the context of the IZA
Evaluation Dataset (Caliendo et al., 2011a, b). The authors would like to thank Marco Caliendo,
Corrado Giulietti, Bas ter Weel and two anonymous referees for helpful comments and Daniela
Geppert for excellent research assistance. All remaining errors are the authors’ own.
Economic
preferences
825
International Journal of Manpower
Vol. 32 No. 7, 2011
pp. 825-851
q Emerald Group Publishing Limited
0143-7720
DOI 10.1108/01437721111174776