The Value of Citizenship Experimental and Quasi-experimental Evidence from Germany and Switzerland Giuseppe Pietrantuono Mannheim, 2016 The Value of Citizenship Experimental and Quasi-experimental Evidence from Germany and Switzerland Giuseppe Pietrantuono Dissertation thesis written at the Center for Doctoral Studies in the Social and Behavioral Sciences (CDSS) of the Graduate School of Economic and Social Sciences (GESS) and submitted for the degree of Doctor of Philosophy (Ph.D.) of the Faculty of Social Sciences at the University of Mannheim March 2016 Academic Director: Prof. Dr. Edgar Erdfelder First Reviewer: Prof. Dr. Thomas Gautschi, University of Mannheim Second Reviewer: Prof. Dr. Marco Steenbergen, University of Zurich Ph.D. Defence: June 1, 2016 The Value of Citizenship Abstract mmigration is a long-simmering issue in every western democracy, and one of the most controversial aspects of immigration policy is the naturalization of immigrants. Citizenship is often tied to important I rights, and right-wing political parties have extensively mobilized throughout Europe and the USA for restricting the influx of immigrants and more restrictive naturalization laws in recent years. These policy de- bates are likely to grow fiercer in the future. In their innovative research, Hangartner and Hainmueller (2013, forthcoming) extensively study the driving forces behind anti-immigrant sentiments in Switzerland by exam- ining how naturalization rates vary at the local level. Building on their work my dissertation project examines another important aspect that has received almost no scholarly attention so far: the effect of naturalization on the lives of immigrants. What happens when immigrants are naturalized? Do immigrants become more politically active and engaged in their communities? Are they socially better integrated? Does citizenship lead to better labor market outcomes, and if so, through which channels does citizenship operate? Answering these questions is crucial to inform ongoing policy debates, but existing research has not provided any reliable micro-level evidence so far. The key problem in studying the causal effect of citizenship is selection bias. Immigrants selectively apply for citizenship for reasons that are not observed by the researcher. Hence, non-naturalized immigrants and naturalized immigrants differ on a wide range of background characteristics that can potentially explain any differences in their social, political, and economic outcomes. This dissertation, for the first time, isolates the causal effect of citizenship per se by adopting (quasi-)experimental identification strategies, which allows me to obtain unbiased estimates of the effect of citizenship that are as credible as those obtained from a random- ized experiment. I study the impact of naturalization on the political, social, and economic integration of immigrants into the host country’s society. I provide new evidence for the effects of citizenship with newly collected data in Switzerland and Germany. First, I exploit the quasi-random assignment of citizenship in Swiss municipalities that used referendums to decide on the naturalization applications of immigrants, in order to study the impact of citizenship on political and social integration. Balance checks suggest that for close naturalization refer- endums, which are decided by just a few votes, the naturalization decision is as good as random; this means that narrowly rejected and narrowly approved immigrant applicants are similar on all confounding character- istics. This allows me to remove selection effects and obtain unbiased estimates of the long-term impacts of citizenship. Second, employing a correspondence test in Germany, I study the impact of naturalization on iii labor market opportunities. The correspondence test method is a sensible way to measure the initial response of employers to varying characteristics of fictitious applicants and permits me to measure discrimination in hiring. The procedure consists of sending out fictitious resumes to real job vacancies that are advertised on- line, in order to identify the causal effect of German citizenship on the likelihood of being invited for ajob interview for applicants with Turkish-sounding names. This approach allows for collecting behavioral data and has the potential to unveil discriminatory practices in the labor market. I find that for the immigrants who faced close referendums, naturalization considerably improved their politi- cal integration, including increases in formal political participation, political knowledge, and political efficacy. Moreover, receiving Swiss citizenship strongly improved long-term social integration. I also find that the in- tegration returns on naturalization are much larger for more marginalized immigrant groups and somewhat larger when naturalization occurs earlier rather than later in the residency period. In addition, the analysis from the correspondence test suggests that having German citizenship considerably increases callback rates for applicants with Turkish-sounding names, but is not enough to remove the entirety of the ethnic penalty relative to native Germans. Overall, the findings support the policy paradigm which argues that naturaliza- tion helps immigrants to better integrate into the host society and thus acts as a catalyst, rather than standing at the end of the completed integration process. By overcoming the selection problem, this series of research articles provide a comprehensive agenda on this topic, and significantly advances the theoretical and empirical literature on citizenship. iv Contents Abstract iii List of Figures x List of Tables xii Acknowledgement xv Preface xvii A Framework 3 1 What is it all about? 5 1.1 Introduction ......................................... 5 1.2 State of the Art ........................................ 7 1.3 Selection Bias ........................................ 9 1.4 Research Strategies ...................................... 10 1.5 Findings and Implications .................................. 11 1.6 Summary and Conclusion .................................. 12 References 13 B Articles 19 1 Naturalization Fosters the Long-Term Political Integration of Immigrants 21 1.1 Introduction ......................................... 22 1.2 Materials and Methods .................................... 24 1.3 Results ............................................ 29 v 1.4 Discussion .......................................... 32 1.5 Conclusion .......................................... 33 References 34 Appendix 37 1.A Introduction ......................................... 37 1.B Swiss Naturalization Referendums .............................. 37 1.C Sample ............................................ 39 1.D Placebo Tests ......................................... 44 1.E Additional Results ...................................... 48 2 Catalyst or Crown: DoesNaturalizationPromotetheLong-TermSocialIntegrationofImmigrants? 61 2.1 Introduction ......................................... 62 2.2 Does Naturalization Lead to Better Integration? ....................... 65 2.3 Empirical Strategy ...................................... 69 2.4 Data ............................................. 75 2.5 Results ............................................ 77 2.6 Conclusion .......................................... 85 References 86 Appendix 91 2.A Data Sources ......................................... 91 2.B Citizenship Policy Index ................................... 91 2.C Additional Results ...................................... 95 2.D Early vs. Late Naturalization ................................. 102 3 The Value of Citizenship: Naturalization Decreases Labor Market Discrimination of Immigrants 107 3.1 Introduction ......................................... 108 3.2 Materials and Methods .................................... 110 3.3 Results ............................................ 113 3.4 Discussion .......................................... 116 3.5 Conclusion .......................................... 117 References 118 Appendix 123 vi 3.A Introduction ......................................... 123 3.B Randomization ........................................ 123 3.C Sample ............................................ 124 3.D Results ............................................ 125 vii viii List of Figures A Framework 3 B Articles 19 1.1 Fuzzy Regression Discontinuity Design: Identification Checks and the Effect of Natural- ization on Political Integration ............................... 26 1.2 Effects of Naturalization on Political Integration ...................... 30 1.B.1 Sample Leaflet sent out to Voters (Names Redacted) .................... 38 1.C.1 Response Rate across the Vote Margin (95% Confidence Intervals) . 42 1.D.1 Balance Checks for Applicant Characteristics (95% Confidence Intervals) . 44 1.D.2 Balance Checks for Applicant Characteristics (95% Confidence Intervals) . 45 1.D.3 Balance Checks for Applicant Characteristics (95% Confidence Intervals) . 46 1.D.4 Balance Checks for Applicant Characteristics (95% Confidence Intervals) . 47 1.E.1 Naturalization Effect with Different Window Sizes (2SLS Specification) . 51 1.E.2 Naturalization Effect with Different Window Sizes (Fuzzy RDD with Covariates) . 52 1.E.3 Naturalization Effect with Different Window Sizes (Fuzzy RDD without Covariates) . 53 1.E.4 Effect of Naturalization on Distrust in People and Institutions . 58 2.1 Double Selection Bias .................................... 68 2.1 Citizenship Policy