Transition to Homeownership Among Immigrant Groups and Natives in West Germany, 1984–2008

Abstract

The present article analyzes transitions to homeownership among immigrant groups and natives in West Germany over a 24-year period from 1984 to 2008. Using data from the German Socioeconomic Panel (GSOEP), we find that everything else being equal, Turks, ex-Yugoslavians, Southern Europeans, and Eastern Europeans do not display any differences in transitions into homeownership. Immigrants from wealthy Western countries and native Germans possess similar and higher transitions into homeownership. Factors exhibiting a positive effect on transitions to homeownership include years since migration, marital status, age, income, and education.

KEYWORDS:

• Homeownership
• German Socioeconomic Panel (GSOEP)
• event history analysis

Acknowledgments

The authors would like to thank the editor and two anonymous reviewers for very helpful comments on an earlier version of this manuscript and Lisa Trievweiler for the English proof of the manuscript.

Notes

1. East Germany, which was under a communist regime until 1989 with its different policies and immigration structure, is not considered in this study.

2. In this study we refer to immigrants as foreign-born including those who received German citizenship. This definition comprises Aussiedler, that is, it includes ethnic and nonethnic Germans, and does not comprise second-generation immigrants who were born in Germany.

3. In addition, some 5 million Aussiedler entered Germany since the 1950s.

4. 1973 was the Anwerbestop (i.e., the closing down of recruitment centers abroad, primarily in Istanbul and Belgrade).

5. In the last decade there has been a remarkable increase of immigration inflow from Poland (OECD, 2008). However, these figures apply for both parts of Germany (East and West).

6. The data used in this article was extracted from the SOEP database provided by the DIW Berlin (http://www.diw.de/soep) using the add-on package SOEPMENU for Stata. SOEPMENU (http://www.soepmenu.de) was written by Dr. John P. Haisken-DeNew. See Haisken-DeNew and Hahn (2006) for details. The SOEPMENU generated Do file to retrieve the SOEP data used here is available from the authors upon request. Any data or computational errors in this article are our own.

7. This choice enables us to analyze all immigrant respondents who are potentially active in the labor force. We indicate how we define immigrants in this study.

8. The group of Southern European countries includes: Italy, Spain, Portugal, and Greece. The group of Eastern European countries includes: Romania, Poland, Hungary, Bulgaria, Czech Republic, Russia, Kazakhstan, Albania, Kyrgyzstan, Ukraine, Tajikistan, Uzbekistan, Croatia, Bosnia-Herzegovina, Macedonia, Slovenia, Slovakia, Belarus, Kosovo-Albania, Georgia, and a separate category in the data set named Eastern Europe. The group of Western countries includes: Austria, France, Benelux, Denmark, Great Britain, Sweden, Finland, Switzerland, United States, Canada, Luxembourg, Belgium, and Holland. Since immigrants from Turkey constitute a large group, they are treated separately.

9. Following previous studies, YSM and YSM² were set to 0 for native Germans.

10. Age and YSM do not perfectly correlate because of differential lengths of episodes and different starting points of observation.

11. For an appropriate estimation of standard errors we applied variance estimates that assume observations belonging to a particular person not to be independent. To do this, we applied Stata's “robust” option for standard errors (logistic regression), defining clustering on person number. We also tested clustering on household numbers, which leads to extended confidence intervals, but does not alter the significance levels of the reported results.

12. It should be noted that none of the Eastern Europeans was from the former German Democratic Republic (GDR). The small group of people in the sample born in the former GDR was defined as natives.

13. We reanalyzed the models controlling for the size of the community of living. Previous findings (e.g., Sinnig, 2006) have indicated that in larger communities, where immigrants preferred to settle, the acquisition of a home is more difficult because of more expensive housing prices. Our findings after controlling for the size of the community remained essentially the same.

14. Our findings illustrate determinants of transition into homeownership of foreign-born and natives. As previously noted, the foreign group category includes people with and without a German citizenship who may or may not be ethnic Germans. Therefore, in addition, the analysis controls for both German citizenship and being an ethnic German and the effect of origin is, thus, net of the effect of German citizenship and ethnicity. The interpretation of results should be considered in light of these definitions.